DEMAND FACTOR
PRICE FACTOR
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| Figure 1 |
According to The Law of Demand, it states that there is an inverse relationship between quantity demanded of any good and the price charged. When price of a certain good rises, quantity demanded of that goods falls. However, when price falls, quantity demanded rises. Therefore, we designed the question in Figure 1 to proof this statement. From the responses, we can see that 75% of respondents consider price is a factor that influences them when purchasing shoes. Their purchasing decisions are based on the increase and decrease of price. Thus, it shows that price is a factor of demand and it has proved the statement.
OTHER FACTORS
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| Figure 2 |
There are three other factors of demand of shoes that influence people purchasing shoes. The factors include
the consumers taste and preferences,
quality of the shoes, and
brand the shoes.
Preferences of consumer is the main factor that affect people buying Nike shoes. It contains 54% which is the highest percentage among the three factors of demand. In 28 survey recipients there are 15 people concern about the preference. This type of customer are usually more care about the outward appearance of shoes such as style, design and color. They will tend to purchase more if Nike produce shoes that meet their preference. Thus the quantity demanded will increases.
The second highest factor that affects the demand of would be the
quality of shoes. There are 39% of people are attracted by the quality of Nike shoes. They are concern about the quality of shoes because it is important for customer to have a comfy and last-longer shoes.
The factor which has the least influence in considering on buying shoes is the
brand which consists of 7% over the overall results as shown in Figure 1. In this category, customer are usually not loyal towards the brand. For branding is kind of luxurious so mostly people would not concern so much. Thus, brand is the lowest factor of influencing the demand of shoes.
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| Figure 3 |
In addition, the
substitute goods is also one of the other factors than price. Substitute goods are two goods that could be used for the same purpose. There are lots of brands as Nike like Adidas, New Balance, Puma which sell similar products but not identical products. Since there are many substitute goods existed in the market, people would more sensitive on the price and can be easily used to place one another. Example like, from our survey in Figure 3, there are 12 people out of 28 people would prefer to choose Adidas instead of Nike when Nike shoes cost higher than Adidas’s. This is because if the price of one good increases, then the demand for the substitute is likely to rise. Therefore, having substitutes goods could able to influencing people when purchasing products and which brand to buy.
Conversely, there are 15 people out of 28 people would going to purchase Nike shoes instead of Adidas shoes even though the cost of Nike shoes is higher than Adidas’s. This may because experiences and loyalty influence consumer’s purchasing decisions. Experiences and loyalty could affect consumer to choose which brand to purchase because they’re believing and confident with the brand, so they would like to make next time purchase.
ELASTICITY OF DEMAND
Factors of Elasticity
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| Figure 4 |
For factors of elasticity, there are two main factors which decided the elasticity of Nike. The first factor is
necessity. From the survey question above in Figure 4, it shows that respondents are more tend to concern about the price when the shoes are necessary items for them. The reasons of this situation might be they have more choices as there are many substitute brands to choose and at the same time they can compare the prices among these brands.
On the other hand, there are also some respondents would not concern about the price which show that they are inelastic to Nike. It may because of personal habits that they are loyal to Nike or prefer the design. Besides that, Necessity is the main reason since it is necessary for them, therefore they may think that it is worth to pay.
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| Figure 5 |
The second factor of elasticity demand is
income level. According to our survey that we have done in figure 5, it shows that high income level indicate inelastic demand of purchasing more shoes as mostly the people wouldn’t purchase more shoes when their income has increased. Out of 28 people, that only 13 people which is 46.43% will choose to purchase more shoes when their income level has increased. Meanwhile, there are 53.57%, 15 out of 28 people will choose to go for others things instead of purchasing more shoes. Basically, the reason that leads to this result is most of the masses think that it’s unnecessary and a waste on buying so many shoes. Some people would have choose to save their money in the bank. However, Nike is affordable to some people; they might be purchasing all their favorite sport shoes as their collection. But the main reason will be the people would like to catch up the trend of sports shoes, especially for the teenagers.
