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Market Forces
AS91530
Level 3 Agricultural and Horticultural Science
Market Forces

A market force is something that affects the
supply and demand of a product.

Market forces are very varied.

Customer preference

Seasonality

Quantity available

Prices

Market manipulations

Producer organisations

Market trends
Supply
There are many factors which can affect supply:
 Price of the product
 Length of production
 Perishability
 Climate
 Cost of inputs
 Number of producers
 Skill of the farmer
 Technology

Seasonal effects

Quantity supplied

Storage and transport
Government restrictions and incentives

Length of production

The production period is the time period between when
a producer makes a decision on how much of a product
to produce and when the product is ready to sell.

Consequences of longer and shorter production cycles.

In primary production, the time period is varied. The
fastest growing vegetable crop takes several weeks to
mature, a wheat crop many months to grow, an orchard
many years. Some animals can be produced in a few
months such as chickens, others take several years.

If prices change during production period the quantity
supplied will not vary very much.
Production costs

What are production costs?

Fixed costs = predictable figure e.g. rates

Variable costs = vary with production e.g. animal
health.

Profit – income minus expenses, return = price
Cost of inputs





Inputs are what the producer needs to produce a
product, e.g. fertiliser, labour, land, seeds, machinery
etc.
If a change in the way the product is produced
increases input costs, then supply decreases.
Inputs can be difficult to change. So when prices fall,
producers still supply the same products.
Sometimes they may be able to wait out low prices.
When prices rise, producers want to produce more
quickly.
Prices and costs

Price of product must exceed the costs of production. To make a
profit, the selling price the farmer gets for a product must be more
than the cost to produce it (the price of the product must exceed the
costs of production). If this does not happen over a period of time,
the farmer will stop producing that product.

Price of the product – as price increases profit increases but demand
may decrease

Prices of other products – the competition


Best use of resources e.g. wool vs mutton

Substitutes – what happens to prices of a product if the same
market niche is filled
Prices due to gluts and shortages
Perishability

Fresh fruit and vegetables only keep for a
few days before they start to perish.

Growers of perishable products have to
sell them regardless of the price they will
get. Even if they only get a low price for
them, they must sell.

Other products such as wool do not perish
and can be stored until price rises.
Seasonality

Seasonality is the pattern shown in the life cycle of a
plant or animal in relation to the time of the year.

When there is abundance of produce the price is
lower if all other conditions remain the same.

E.g. strawberries. They are available from the end of
October to March. The time of peak production is
November, December and January. The price
obtained for strawberries is related to their
availability – low availability means higher price, high
availability mean lower price.
Seasonal effects (unseasonal
conditions)

Unseasonal conditions means weather conditions that are not normal
for a particular season. Examples are drought, above or below normal
temperatures, out of season frosts or heavy snowfalls.

This can effect the timing of production, crop physiology, out of season
production, both for local and overseas markets.

Bad weather conditions are likely to reduce supply. Good weather
conditions are likely to increase supply.

Bad weather in a local area may affect individual farmers and reduce
their supply without significantly affecting the total supply for the
country. However, if unseasonal conditions are widespread total supply
for the country will be affected.

Seasonal effect are environmental factors that cause problems with
the production of produce. E.g. winds flattening crops, hail damaging
fruit, frost damage to plants at blossoming, cold, wet weather killing
new born lambs, floods destroying crops and causing animal deaths.
Climate

The climate of an area determines the
products that can be successfully grown.
Climate includes temperature, rainfall, and
sunshine hours found in an area.

Some crops are dependent on certain
climatic conditions to produce a good
quality crop. Citrus need warm
temperatures all year around. Pip fruit
require a frost in winter to set fruit buds.

Climate effects product choice and location.
Environmental

Products can only be supplied to meet the market
if the environment is manipulated to provide
optimum productivity of the product, i.e.
optimum inputs to gain optimum outputs.

E.g. (Horticulture) light, H2O, nutrients & CO2
need to be at an optimum, pests & diseases have
to be controlled to reduce stress.

E.g. (Agriculture) Plant productivity for feed &
living conditions (shelter, H2O, pests & diseases
control) have to be at an optimum.
Quantity supplied

Sufficient volume has to be supplied to meet market demand,
especially for export markets. Retailers demand guaranteed
volumes of high quality product over a specific period.

Trends/patterns for a range of primary products
Reliability of supply

The need for consistent high quality production over a
period of time and to overcome barriers to reliability.

Growers must plan to meet this demand.

New cultivars and breeds


A new plant cultivar may be developed. This may be higher
yielding or resistant to particular insect pests or diseases. This
increases the amount of produce the grower can supply.

A new sheep breed many be developed that produces more
lambs than normal or is more resistant to diseases and pests.
Pest and diseases

Can cause a loss of production, and this reduces the amount of
produce the farmer supplies.
Competition

Competition can be reduces in special circumstances.

Some producer organisations can buy produce at a set price
from many small growers. They can then resell the produce
to a large market.

Here they are acting as a single seller that controls supply
and reduces the competition, so that many smaller growers
are not trying to outdo each other.

This usually happens when selling in the export markets
rather than in the local markets, e.g. pip fruit.

Within New Zealand apple and kiwifruit industries,
competition can be reduced. The organisations buy up all
the produce then sell it, on behalf of all the growers, as a
single seller.
Technological improvements

Improvements in technology can increase productivity
and supply.

Can be used to increase supply without causing an
increase in input costs.

If a change in the way a product is produced reduces
the costs of the inputs, or it enables more to be
produced for the same inputs costs, then supply
increases.

E.g. a mechanical harvester may replace some of the
labour previously required for the job. For the same
cost a larger quantity of a product can be supplied.
Producer organisations

Producer or grower organisations are made up of representatives
of the growers. These representatives make decisions on behalf
of the growers for the benefit of the whole industry. Each major
product is handled buy a group of producer organisations. Each
of these organisations oversees some special product research,
processing or marketing.

The main aim is to obtain the best long term returns for
producers.

There are several ways in which grower organisations can
influence the market supply. These include;

Organising a marketing system

Setting the price schedules and controlling the supply for market at
a particular time

Providing technical know how to improve production levels

Advising the grower on when, how and what to plant.
Special factors

Special factors can be many things that do not fit in to
the other categories.

Examples are; transport strikes. A transport strike can
prevent a product reaching its market. This has the
effect of reducing supply.

Planned e.g. a potato grower may want to grow early
potatoes for high returns but must weight up risks of rot
& frost.

Unplanned e.g. hailstone damage on apples.
Questions

Explain how the length of the production period affects supply.

Name 4 types of inputs a farmer needs to produce a product.

Give 1 example for each; a highly perishable and a non-perishable
product.

What does “seasonal crop” mean, and what makes strawberries a
seasonal crop?

What market force determines where citrus fruit can be grown
commercially?

Describe 3 ways in which a farmer can increase the supply of a product.

How can producer organisations help to prevent competition among
growers?

Explain what “seasonal effects” means.

Give 3 examples of seasonal effects that can reduce the supply market.

Name 2 ways producer organisations can influence the supply market.
Supply and Demand

The most successful farmers have an awareness
of the market, that is who wants their produce,
when and where.

To do this they need to have an understanding of
economics – the relationship between supply and
demand.

A simple way to start is to use graphs.
The Supply Curve

The supply curve is a graph showing the relationship
between the price and supply of a produce.

Normally there is direct relationship between the two
variables which is as the price rises so to does the
supply. The higher the price, the greater the quantity
that a grower is willing to supply.
Drawing supply curves

Price is always on the vertical axis.

Quantity always goes on the horizontal axis.

The scales on each axis must increase by uniform intervals.

Each axis needs to be clearly labelled.

The graph needs a suitable title.

Each point should be plotted with a small cross (x).

Points join with a smooth line. In some graphs this will be a straight line, in
others a curve. It will always have the same slope, that is, upwards from left
to right.
Drawing sketch graphs

A sketch graph is a shorter way of showing a supply graph. Instead
of giving actual figures for prices and quantities, a sketch to show
what is expected to happen.

Supply curves usually slope upwards from left to right.

P stands for price

Q stands for quantity

S stands for supply

Arrowheads show the direction of increase in price or quantity.

The title includes the name of the product.
S
S
Shift of the supply curve

A price change of a product will result in a
change in quantity supplied.

This change in the price of a product causes a
movement along the supply curve. With a shift
of the supply curve, there is a change in supply
and the whole curve shifts to a new position.

When the curve shifts to the right this is an
increase in supply, while a shift to the left is a
decrease in supply.

A supply curve will shift if there is a change in
conditions (or determinants) of supply, other
than the price, such as changes in costs of
production, technology and the level of workers
productivity, indirect tax changes, subsidies or
the price of a related good.
Supply – seasonal effects.

The curve shifts to the
left if supply reduces
which could happen if
there were a drought.

The curve shifts to the
right if the supply
increases possibly due
to a mild winter.
Market Supply.

Market (aggregate) supply is the quantity
of a product supplied by all the growers or
producers.

To calculate market supply, add together
the quantities supplied by each grower.

The total supply from all the growers or
producers is also called the aggregate
supply.
Demand
There are many factors which can affect demand:
 Consumer preference
 Advertising
 Promotions
 Packaging
 Research and development
 Size of the market

Seasonality

Niche markets

Quality

Substitutes

Price of the product

Quantity available
Consumer preferences

Consumer preference is what the customer wants to buy.

The products the consumer wants have changed over the last
20 years. Consumers now prefer healthy, easy to use, fresh
produce. Eating out has become more.

Each year the number and range of products available for
consumers increases, e.g. a major supermarket chain in the
USA is offered 250 new products each week. If any of these
new products are to be sold in their supermarkets, slower
moving products must be removed from their shelves.

With so many new products on offer for consumers, primary
producers must be aware of, and be able to sell what is
wanted when it is wanted.

Because markets change so rapidly producers can not assume
that what is being sold successfully this year will be demanded
next year.

Manipulating consumer preference / demand is one way that
marketers can determine what produce will be bought.


Consumer preference for a product can be changed /
influenced by:

Telling the consumers about the product (advertising)

Telling them how to use it (in-store promotions, cooking
programmes)

Repackaging the basic product

Changing the basic product (Research and development)

Using the product in different ways (woollen oil
booms)

Making a new product altogether by processing the
basic product (value added products such as Hash
Browns)
Technological changes have allowed products to altered to
change

The appearance of the product (grading machines)

How the product is used (kiwifruit juice)

How the product is presented (chilled meat)

Altering products by breeding for specific characteristics is
another method that can be used to satisfy consumer
demand.


Farmers can breed for resistance by culling susceptible
stock. This allows them to sell the animals as organic
when chemicals are not required to combat parasites.
The affect of trends and fashions

Demand for a product changes with fashions e.g. wood
floors preferred to carpet - demand for wool goes
down.

Careful planning has to be made when trends or
fashions are followed in long term production crops
e.g. building up a dairy herd, planting an apple
orchard.

INPUTS have to be balanced against OUTPUTS over a
period of time, e.g. lettuce production has a short
production time – quick if low returns. Apples take
longer – therefore careful research into consumer
demand for varieties has to be considered.
Exercises
1.
Potatoes are sold fresh or processed. Name at least 5 ways that
potatoes are processed.
2.
For milk, identify at least 3 value added products.
3.
Explain why these products are worth more money than the basic
milk.
4.
Identify how milk is sold i.e. how is the product advertised?
5.
Describe the overall trend in consumer preference for milk over
the last 5 years, 10 years and 20 years? Explain why there is that
trend.
Advertising

Advertising is the main method of telling consumers
about a product. If consumers want that product then
demand increases.

Advertising needs to have information and impact so
that consumers’ interest is aroused.

It needs to give details about the product or service,
such as what it is, what it does, what it costs, where
and when it is available, what back up services are
available and how it compares with similar products.

It must attract attention and hold that attention long
enough for the message to sink in. Ways to do this
are; size, colour, position on page or time on
television, layout and emotive content.
Promotions

Promotions make the consumer aware of a product such
as free sampling at the supermarket.

This also creates demand for the product.

Other examples are;

Recipes and cooking demonstrations

Price reductions to get consumers to try the product

Free samples in the mail

Free sampling in the supermarket
Packaging

Customers are demanding packaging that is strong, attractive
and recyclable. However, the cost must be reasonable.

The packaging must be well designed and present the product
attractively to the wholesaler, retailer and the customer.

Fruit has special needs, as the packaging must maintain fruit
quality and extend the shelf life. It should;


Protect the product from bruising and squashing

Protect it from water loss

Allow enough air movement to aid cooling, fumigation and gas
exchange during respiration

Reduce or prevent fruit to fruit contact to slow down the spread of
fungi from infected fruit to clean ones

Be easy to handle
Packaging also must meet the requirements of the market and
the standards that they set e.g. where it is produced.
Research and development

R and D focuses on other ways of using the product and this is
turn leads to increase in demand.

For example, wool has increased in demand due to;

Developing a fine fibre to be used in garments e.g. Icebreaker

For insulating houses instead of fibreglass

Blending of wool and synthetic fibres to make covers for bus and
car seats. This fibre wears longer than just wool, doesn’t ill and
is more fire resistant than synthetic fibres.

Spraying woollen upholstery fabrics with Scotchguard to make the
fabric stain resistant.
Size of market

The bigger the market is, the bigger the demand.

The New Zealand market is very small in world terms.

New Zealand growers often aim to export to increase
the size of their market, as the country has such a small
population.
Quality


Closing the technology gaps

New Zealand producers are required to guarantee the shelf life of
their products and to consistently deliver fresh quality produce to
markets.

Continuing research into the development of disease resistant
plants.
Developing and accepting the idea of total quality management

Producer organisations are recognising the need to develop and
demand professionalism and competence by setting high standards
for growers and exporters.

Export requires very high quality products.

Fresh products need to be of high quality.

Processed product e.g. juicing apples, may be of second grade.
Seasonality
Seasonality is determined by;

Seasons in New Zealand. In winter people eat
fewer salad vegetables such as lettuce and
tomatoes. They eat more cooked vegetables such
as pumpkin and peas.

Seasons in other countries. The northern
hemisphere has the opposite seasons. When it is
winter in New Zealand, it is summer over there.
This influences the demand for seasonal products
grown in New Zealand.

Seasonal demands – e.g. poinsettias for Christmas,
African violets for Mothers day, Roses for
Valentines day.
Niche Marketing

A niche market is a very small market for
highly specialised, highly priced products.

Niche markets aim towards

Finding a product that customers want

Developing it precisely to their requirements


maintaining a very high standard
Customers in wealthy countries ask for a much
wider range of goods. These customers are
moving away from mass produced food and
going for luxury, ready to eat natural
products.
Producer organisations
Producer organisations can affect demand for a product in a
number of ways.


Establishment of new markets

Improving market awareness

Closing the technology gaps

Developing the idea of total quality management

Setting acceptable standards for growers and
exporters
Improving market awareness.

Understanding the markets and market trends

Knowing the distribution requirements

Recognising the effects of established brands
Products changed before sale
Ensuring the product is what consumers want may mean it is
changed before sale;

Processed to form other products e.g. whey was a waste
product, now used in protein concentrates, baby food, alcohol,
and as a food ingredient.

Have their size changed to fit niche market e.g. cabbages cut in
half for people who are living alone.

Changing the basic product to make a new range of products,
called diversification. Usually done by further processing. E.g.
sausages, pates, special cuts.

Using the basic product as part of different products e.g. casein
is used in ice cream.

Making a new product. New technology provides opportunity for
low grades of produce to be used. E.g. kiwifruit juice.
Complements

Complements are products that are used together, e.g.
strawberries and cream. If the price for strawberries
rises, the quantity demanded will fall. The effect of
this on the demand for cream is a fall in the demand in
cream.

If the demand for a product increase, then the demand
for its complement (if it has one) will also increase.
Substitutes

Substitutes are products that can be used in place of
one another. For example, margarine instead of butter,
marmite instead on vegemite.

When the price of one of a pair of substitutes rises,
people may change to the other substitute product.
Problems in establishing new
markets (increasing demand)
New Zealand has 4 main problems when setting up new markets.

Distance from markets due to geographical position. New Zealand is
a long way from its markets so costly airfreight is needed to get fresh
produce there quickly. Shipping by sea may take longer than the
shelf life of the product even with controlled atmosphere.

Lack of critical mass (supply volume). A lot of our producers are
small scale businesses and so in a user pay environment, it is difficult
for them to find money to fund research.

Lack of market information. Due to many small scale businesses, very
little market research is carried out, especially in consumer
preference. This leads to products on the market that do not achieve
customer acceptance.

Market access. The quarantine requirements of importing countries
often require the development of detailed, expensive disinfection
programmes e.g. Japan and USA.
Questions.

Name 2 methods by which producer organisations can
affect the demand of a product. Explain each one.

Name 3 ways products can be changed to meet
consumer demand.

Why will the demand for cream go down if the price of
strawberries rises?

Explain 3 problems New Zealand has in establishing new
markets.
The Demand Curve

The demand curve is a graph showing the relationship
between the price and demand for a product.

Normally there is an inverse relationship between the
two variables which is the higher the price the lower the
demand.

Market (aggregate) demand is when everyone’s individual
demands for a product are added together.
Demand Curve
12
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Price
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Quantity
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Drawing demand curves

Price is always on the vertical axis.

Quantity always goes on the horizontal axis.

The scales on each axis must increase by uniform intervals.

Each axis needs to be clearly labelled.

The graph needs a suitable title.

Each point should be plotted with a small cross (x).

Points join with a smooth line. In some graphs this will be a straight line, in
others a curve. It will always have the same slope, that is, downwards from
left to right.
Demand Curve
12
10
Price
8
6
4
2
0
1
2
3
4
5
6
Quantity
7
8
9
10
Drawing sketch graphs

A sketch graph is a shorter way of showing a demand graph. Instead
of giving actual figures for prices and quantities, a sketch to show
what is expected to happen.

Demand curves usually slope downwards from left to right.

P stands for price

Q stands for quantity

D stands for demand

Arrowheads show the direction of increase in price or quantity.

The title includes the name of the product.
D
D
Shift of the demand curve

An advertising campaign will result in a change in demand.

This change in demand causes a movement along the demand curve.

If demand increases the shift is to the right, if demand decreases the shift
is to the left.

A demand curve will shift if there is a change in factors of demand such
as changes in promotion, consumer preference, complements,
substitutes, and size of the market.
Demand
The curve shifts to
the left if the
demand reduces
which could happen
if there were a
disease scare.
 The curve shifts to
the right if the
demand increases
possibly due to a
seasonal effect.

Demand Curve
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Price
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0
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Quantity
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Questions

Name 3 situations that would cause
the demand curve to move to the
left.

Does the move of the demand curve
to the left, show an increase or a
decrease in demand?
Equilibrium or market price

To understand the market place the two curves most
be fitted together. This is the link between supply
and the demand of a product and the price that it
fetches. This is the reason why producers must know
what product the consumer wants so they can
supply it and therefore make a profit.

In the market, buyers and sellers meet. Sellers
come with the product they hope to sell at the best
price they can get. Buyers come hoping to buy the
product at the lowest price.

Market or equilibrium price is the point at which
both supply and demand for a product meet.

There is a point on the graph of supply and demand where
the supply and demand curves cross over. This is the market
price. When this is achieved, trade takes place.

The market price is derived from the point where the supply
and demand curves for a product intersect.

The market price may suit some buyers and seller, others
may be disappointed.
The Equilibrium Market Price
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Market price changes

Market prices change frequently due to changes in
demand and supply.

Both early season and increased demand after
advertising, raise the market price so;


Some growers try to grow products for the early
season market

Producer organisations promote and advertise their
products.
Seasonality – the price of seasonal fresh products
are affected by supply. When these products are:

In abundant supply prices are lower

In scarce supply, prices are higher.


Quality and price – many consumers will pay extra
money for a better quality product.

Since consumer demand is for better quality, more of
a better quality product is bought than poorer
quality.

An increase in demand for a better quality products
shifts the demand curve to the right and raises the
market price.

A higher price can increase growers’ returns. The
actual return will depend on the amount sold
multiplied by this high price.
Consumer income level

High income level = high demand of high quality

Low income level = high demand lower quality

Recession reduced overall income - reduced demand

The quantity available:

The smaller the quantity available the higher the
price if the product is preferred by the consumer
e.g. avocados in midwinter.

This demand will be controlled by the size of the
price.
Returns
Returns are the total income the producer receives
from selling a product before any costs are deducted.

Returns equal price paid multiplied by the amount
of the supply.
Returns = Price X Supply.
Exchange Rates
Every country has its own exchange rate – or in the case
of the European Union a common currency.
New Zealand, Australia and the United States have the $.
Britain has the pound.
Japan has the yen.
Each currency has its own value.
These values affect:

The prices producers received for their product.

The price producers will pay for items bought
overseas that are used on the production process.

Some countries have stronger currencies than others.
Currencies are compared against other currencies to
measure their worth to another country.

Some countries may have their exchange rate fixed –
this means that no matter what happens in the global
market their currency will be at a set rate.

Most industrial countries, including New Zealand have
a floating exchange rate – the market of buyers and
sellers sets the currency price.

The value of the New Zealand dollar overseas affects
the prices of New Zealand exports.
A high New Zealand dollar.
When the New Zealand dollar is valued highly against
the US dollar then:

Imports are cheaper into the country. This is
because we can get more for our money.

Exporters don’t get as much money as the people
who buy their products can not buy as much, so
they don’t.
A low New Zealand Dollar

When the New Zealand dollar is valued
low against the US dollar then:
 Imports
are more expensive to get into
the country. This is because we get less
for our money.
 Exporters
earn more as the people who
buy their products can buy more, so
they do.
What this means for farmers

Fertiliser, tractors and other machinery
imported into the country cost less so they
could buy more.

They don’t make as much money as their
products (wool etc.) aren’t worth as much.

Overall farmers prefer to have a low NZ dollar.
Foreign Exchange Market

The buying and selling of a particular currency is carried out
through the foreign exchange market.

This market operates the same as any other market with a
demand and supply for currency determining the price e.g.
1NZD = 0.92AUD. This means that $1 New Zealand will cost
92 cents Australian to buy OR $1 will buy 92 cents Australian.

There is a need for a foreign exchange market because
different countries have different currencies and in order to
make trade between countries easier it is necessary to
establish the value of each currency in comparison to
another.
Basics of Currency Conversion
 If $1NZ = US0.50
 Converting a foreign price e.g. $20,000 US to New Zealand
dollar value requires the foreign price to be divided by the
exchange rate.
 $20 000US / 0.5 = $40,000 New Zealand
 Converting a New Zealand price e.g. $40,000 NZ to a foreign
dollar value requires the NZ price to be multiplied by the
exchange rate.
 $40 000NZ x 0.5 = $20,000 US
Floating (flexible) exchange
rate

New Zealand has a floating (flexible) exchange rate,
thus the price of New Zealand currency fluctuates on a
day to day basis as determined by the forces of demand
and supply.

A change in demand or a change in supply will change
the exchange rate i.e. the price of New Zealand
currency will change.
Exchange Rate Appreciation
and Depreciation
Appreciation

When the exchange rate in New Zealand appreciates it
means the price of one New Zealand dollar just got more
expensive in terms of the overseas currency that will be
required to buy it (not good for exporters).

It also means one New Zealand dollar will buy more foreign
currency (good for importers).
Depreciation of the Exchange
Rate

When the exchange rate in New Zealand depreciates it
means the price of one New Zealand dollar just got less
expensive/ cheaper in terms of the overseas currency
that will be required to buy it (good for exporters).

It also means one New Zealand dollar will buy less
foreign currency (NOT good for importers).
Supply and Market Trends
A trend is a change that has occurred over time.
Supply trends

Producers and producer organisations keep records of
the supply of various products. They can use this
information to try and predict what will happen in the
future. Examples are; price received and quantity
supplied.

Graphs of this information often show trends or
patterns. The trend may show prices or supply
decreasing for one product, or prices or supply
increasing for another product.
Long term trends

Trends shown in price, volume of consumption or
production etc. over a period of at least five
years.

Factors affecting long term trends = attributes,
seasonality, quantity available, quality supplied /
required, consumer preference, reliability of
supply, price, trends, fashions, market regulation
/ manipulation.
Zespri Global Supply (ZGS).
Italy • France • Japan • South Korea • Australia
Short term trends

Trends shown in price, volume of consumption, or
production etc. over a period of one year or season.

Factors affecting short term trends = climate, attributes,
production practices, timing of production, timing of
supply to export markets, specific windows of supply &
price.
Market Trends

Market trends = is a historical change in demand
for a product that allows market forecasts to be
made to allow suppliers to plan ahead.

Market trends are useful for predicting possible
changes in demand for primary products.

If there has been a change in demand for a
product it may be useful to try and identify why
the change has occurred. This can be particularly
helpful if there has been a decrease in the
demand for a product, as it may indicate possible
future trends for other end products or for new
products.
Identifying possible reasons
for market trends.
Changes in demand may be the result of a wide variety of reasons
such as;

New products on the market.

Advertising and promotions

Changes in technology e.g. production of synthetic fibres
replacing wool.

Changes in income distribution e.g. if income increases people
may spend more money on more expensive foods.

Substitute products available e.g. potatoes can be replaced with
rice and pasta.

Changes in fashion or taste e.g. people eating more healthy
foods.

Changes in lifestyle e.g. busy people eat more fast foods.