Demand is the
desire and ability to consume certain quantities of a good and service at
certain prices at a particular point of time. It will only occur when we have
the purchasing power.
The movement along the demand curve will only occur when the price of the
product itself changes whereas for the changes in level of income, price of
substitute and complements, taste and preferences, expectation in future price,
health awareness, weather, population and festivals, it will shift the demand
curve to the left or right depends on the changes occur.
Diagram 1 Factors that
consider when buying clothes
Based on the diagram 1, there are four factors that determine the demand of customer on buying
clothes, which are the price, quality, brand and preferences. The preferences
have the highest percentage among the factors of demand which is 31%. It is
because when a cloth meets the requirement of a customer such as the style,
material or colour, they will tend to buy more and so the quantity demanded
will increases.
The factor which
has the least influence in considering to buy clothes is the brand. For
consumers with low income, the brand of the clothes carry certain value that
beyond their capability to purchase. Thus, they couldn’t afford to buy branded
clothes causing the demand for it to be lower.
Meanwhile, the
price of clothes and the quality share insignificant differential of 28% and
25%. It is because customers are sensitive towards the price changes and so
they can only afford to buy clothes which have reasonable and affordable price.
Additionally, the buyers are concern with the quality of the clothes. It is because
people like to wear clothes which they will feel comfortable with throughout
the whole day.
Chart
1.2 If your preferable choice of brand increased in price, will you continue
to purchase their clothes?
The reasons
given by those who choose ‘Yes’ are:
The
reasons given by those who choose ‘No’ are:
On the other hand, for the theory of elasticity, one of the determinants is
the price of the product itself. Based on the findings, most of the respondents
will continue to purchase
clothes from their preferable brand even though the price has increased. It is
because they are loyal to the brand of clothes they have been purchased and so
they are not elastic towards the price of their preferable brand. Besides that,
clothes from consumers’ preferable brand can fulfill their satisfaction. This
is because other brands might not have the suitable style or material that fit
the customers.
Nonetheless,
some respondents are not willing to purchase clothes from their preferable
brand when the price increases. It is because they don’t have the purchasing power. These consumers have a low
level of income and they only purchase goods that they really need, such as
groceries, so that they can survive.
Chart
1.3 Would you purchase more clothes if your income had increased?
The reasons
given by those who choose ‘Yes’ are:
The
reasons given by those who choose ‘No’ are:
- It is
unnecessary purchase
- Purchase only when needed
Furthermore, people with higher income tend to have a higher purchasing
power causing the demand curve to be inelastic. This is because they are not
sensitive to the price changes of the product itself. There are also a few other factors that
led to this result; one of them is fashionista. Consumers who are fashionista
couldn’t live without having a change in their daily life style. They will
catch up with the latest fashion and purchase clothes which will make them
unique. Besides that, a variety of clothes is also one of the factors.
Consumers like to wear different patterns and colours of clothes because it
will make each and every day of theirs special and refreshing.
However, there
are also respondents who are not willing to purchase more clothes even though
their income has increased. This is because some consumers put their priority
in saving the additional income rather than purchasing more clothes and they
think that it is unnecessary to buy additional clothes.
Chart 1.4 If there is another brand
selling clothes that are similar to your preferable brand but sold at a much
lower price, will this change your choice of brand?
The reasons
given by those who choose ‘Yes’ are:
- Same satisfaction but at a
lower price
The
reasons given by those who choose ‘No’ are:
Besides that, the availability of substitutes is one of the determinants
of elasticity. The more substitutes the product has, the more elastic the
demand. Most of the consumer will compare among the available products to
purchase the product which can satisfied them at a minimal price.
Conversely, some
respondents will not change their choice of brand because of loyalty. This is
because consumers have purchased from their preferable brand for a long period
of time and there is a strong connection between them.
The other factor of elasticity is the percentage of income spent. The
higher the percentage of income spent, the more elastic the demand. Given an
example, when a person’s expenses are high, this means that his or her spending
will be limited and so he or she will be sensitive towards the price.
When a customer is satisfy
with the style, colour or material of a cloth, he or she will buy more as the
clothes have meet their satisfaction.
