Define the environmental factors influencing demand.

There are many environmental factors that may affect an influence demand of a product. Some of these factors are discusses here.

  1. Weather and seasons: The weather and season of a region may affect the demand of certain products. For example if it is winter in a country, the demand of ice cream may decrease and a demand for jackets and other apparels may increase.
  2. Social Factors: The social setup may also influence the demands of products. For example if a society is rich with financial resources, it may be in demand for luxury items but on the other hand a poor country may be in less demand of luxury items.
  3. Availability of Land Resource: If a country is short of land resources, it has to adopt to artificial fertilizers to fulfill the demands of its citizens for natural products. In countries where artificial fertilizers are used in abundance, there is an increased demand for organic food (Lohr, 2001).
  4. Political environment: Government policies also contribute to the increase or decrease in the demand for certain products. For example if the government of a country puts a halt on the hunting of a certain animal, the demand for its meat will increase automatically in that market.