Its hard when a disaster strikes out of no where and you realize that you don’t have the essentials needed in order to get out of town, such as gas, water and just simple food that you would need. So you take your family to the nearest gas station and realize that the gas and water are higher than usual because of the disaster. This is what brings me into supply and demand.
“Weather-sensitive products: adjusting price and promotions to increase sales” by write Xavier Rousset explains that in the US and UK with different weather changes the price goes up and down for a variety of things such as in store sales and to buying a new car. For example, in the UK when it gets hot outside sales for ice cream increase rather than chilled drinks and, in the US, prices fall due to poor weather but in the car industry sales for convertibles and cars with drop tops increase when the temperature is hot.
Additionally, even though the influence of the weather brings more sales in on certain products corporations’ decision on price, promotions or advertising seem to become more of a habit than a reason to do so. Therefore, when it comes to the weather many marketing branches showed that when putting together weather and decisions to come up with sales it is still badly understood. Understanding the framework to take into account of the weather could increasingly make sales and bring in more financial gain.
Recent study shows that when it comes to weather-sensitive products consumers fill in the hole by paying attention to how advertising and price payment can be adjusted to the outside climate. In theory, when putting together prices on such products it shows similarities between the same geographical region and in between regions. Advertising the amount of money that is spent can be wholly directed to certain months of the year or sometimes even extending more than twice the yearly average. When studying this, it helps companies understand more of its implementation of moderation in price and in advertising payments are proved to be right and how they can rearrange relation to the outdoor climate.
According to theory, results of when going outside with high temperatures, the price and advertising dismemberments should be increased when the demand is elasticity. Also, when the demand is more subtle to price changes than advertising changes, an inflation in price affects the demand more than an inflation in advertising expense of the same intensity.