What to do in the face of a drop in demand?

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luckyakter
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Joined: Thu Aug 11, 2022 6:27 am

What to do in the face of a drop in demand?

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One of the important challenges that a business or company, regardless of its size, can face is a reduction or drop in demand for its products or services. What is the demand? Demand corresponds to the quantity of products or services required by a set of buyers and/or consumers in a given period. What to do in the event of a drop in demand Why is demand falling? The demand for a product or service may be temporarily or prolongation decreased for different reasons, including the following: 1. Change of tastes, habits or preferences of consumers. One of the main reasons for reducing the demand for a product corresponds to the adoption by customers of new needs or value requirements, which cause changes in product or service preferences. 2. Decrease in the purchasing power of customers and/or consumers.


The demand for a product or service can be reduced as a result of the reduction in the consumer's purchasing power or, what is the same, a decrease in personal or family income. People, as a result of a reduction in their income, choose to be much more selective and careful in choosing their products, for this reason they reduce the quantities consumed of many products or deprive themselves Estonia Phone Number List of the acquisition of some. This situation results in a natural reduction in demand. 3. Excessive rise in product prices. Other reasons why the demand for a product or service can fall is due to the excessive rise in prices, which, when the products are not basic or essential, or have substitute products, the consumer is guided by reducing , replace or postpone purchases of the product that presents excessive price increases, thus evidencing a reduction in demand. 4. Proliferation of substitute products.

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Substitute products, understood as another supply of products, capable of meeting the same needs, is another reason why there is a decrease in demand for many brands. 5. Regulatory or legal restrictions on consumption. An additional and particular reason why there may be a reduction in the demand for a product in a given market is the development or generation of restrictive or coercive regulations against the consumption, production or marketing of a product by the economic authorities. and legal of a population. Why is demand falling? Main consequences of a drop in demand? As a result of a drop in demand for a certain product or service, the organizations that develop it present: sales decline Price level competition brand devaluation Low profitability Liquidity problems, etc. What can we do in the face of a drop in demand? The fall in demand is an important scourge that can affect an organization and even lead to its disappearance.
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