Posted in Marketing and Strategy Terms, Total Reads: 302
Definition: Peak Demand
Peak demand is a noticeably and historically high demand for a product or a high sales record. Peak demand may be calculated on a daily, weekly, monthly, yearly or seasonal basis. The opposite of peak demand is off-peak, i.e. the time when demand is noticeably low.
Peak demand can affect factors like production, distribution, display, sales discounts etc.
For example, every year in India there is a high demand of sweets in the festive season, especially on Diwali. Keeping this in mind the sweet shops will stock all the supplies beforehand, get hold of more cooks for making the sweets for the busy weeks and make sure that they put the sweets they make properly on display so that the passersby are aware that the shop is selling the ‘seasonal’ sweets. Even so the shop owners can hike the price to charge a premium given the festive season as people are generally willing to pay more. This example explains seasonality in terms of the festive season when we see a hike in sweet demand in India.