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How Companies React to Changes in the Demand
Even the company that I work for always profits and raises their prices every time there is a high demand of a certain item. My company sells industrial equipment and, since it’s been in the market for several years now, has accumulated experience about our consumers. On a daily basis, the demand doesn’t really change dramatically. The company has their loyal clients with whom it works with. But once the European support funds are given to local entrepreneurs, demand rises dramatically. Although the company offers used machinery for a better price, people are interested in buying new, unused equipment and machinery, because the support funds provide funding for 50-75% of the equipment’s price, thus creating an increase in price, since the company can profit from this. Since the demand is not that high for the rest of the season, or how we call it “silent season”, it is easier to redeem customer’s old equipment and machinery, because most of it is not in use and just loses its worth as time goes by.
Since the trends are ever changing and the market is ever growing it’s getting harder to predict what the customer will want. That is why I admire the Inditex group for listening to their customer’s opinion and keeping track of what, when and why the customer buys. I strongly believe that this is the kind of practice that should be established in growing companies to keep their loyal customers and potentially gain new ones.
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