PRODUCTION & OPERATION MANAGEMENT

Presented to : Sir Waqas Raza Presented by : waQas ilYas (BA 582702)

TODAY’S TOPIC

Factors that Influence Demand

WHAT IS DEMAND?In Economics, Demand is the utility for a good or service of an economic agent, relative to his/her income.Demand is a buyer's willingness and ability to pay a price for a specific quantity of a good or service.

6 IMPORTANT FACTORS THAT INFLUENCE THE DEMAND OF GOODS

1) Tastes and Preferences of the Consumers2) Income of the People3) Changes in Prices of the Related Goods4) Advertisement Expenditure5) The Number of Consumers in the Market6) Consumers’ Expectations with Regard to

Future Prices

DIFFERENT TYPES OF DEMAND1) Negative demand: If the market response to a product is negative, it shows

that people are not ware of the features of the service and the benefits offered. 2) No demand: If people are unaware, have insufficient information about a

service or due to the consumer's indifference this type of a demand situation could occur.

3) Latent demand: At any given time it is impossible to have a set of services that offer total satisfaction to all the needs and wants of society. In the market there exists a gap between desirables and the available.

4) Seasonal demand: Some services do not have an all year round demand, they might be required only at a certain period of time. Seasons all over the world are very diverse.

PRACTICAL STUDY OF THE ORGANIZATION WITH RESPECT TO TOPIC

Bata Shoe Company (Pakistan) Limited in 1951 and went public to become Bata Pakistan Limited in the year 1979. . Bata Pakistan is serving its valued customers through a strong retail network comprising of more than 400 retail outlets, 467 registered wholesale dealers, 13 wholesale depots, 28 wholesale distributors and 41 DSP wholesale franchise across the country.

The management of Bata can apply such techniques to increase its demand and value all over the country, being as costly product than other substitutes, for this they have to introduce new product with its low cost of packing and quantity. If somewhere demand of competitors is high then it should promote high advertisement for awareness among people to take full advantage. The management has to continuously make changes in Designs.

SWOT ANALYSISStrengths• Adequate Financial resources• Access to Economies of scale

Weakness• Weak Market Image• Weak Distribution Network

Threats• Ability to grow rapidly because of strong

increases in market demand• Emerging new Technologies

Opportunities• Vulnerability to recession and business

cycles• Growing bargaining power of customers

and suppliers

I Conclude that Stock of capital goods in hand influence the investment demand in just the same way as the stock of consumer goods in hand affects the household Consumption-savings decision.

CONCLUSION