Department Store Personal Shopper Services
need help on economics question?
Two past hnd students , astid and hussain have decided to setup a business in reading, offering their services as a personal shoppers for fashion conscious people in the town.
They intend to undertake searches for age appropriate, funky clothes for their clientele using a variety of sources, ranging fro traditional outlets like department store, to car boot sales, charity shops such as oxfam and Designer outlets.
They imagine that their potentail customer list will come largely from the universities in the town, but also hope to capture trade from office workers and general public
question 1: explain 3 factors that may influence the demand for Astrid and Husain’s services
question 2: would you describe the demand curve for their services as fairly elastic or fairly in elastic(explain why and include the appropriate diagram)
i don’t understand this. can you help me please 
Well Top_gear, firstly the duo Astid and Hussain have to do a lot more than just imagining their potential customers. Their primary goal should be to do a thorough analysis of the STP i.e. Segementing, Targeting & Positioning of thier product. This would be the most important factor for the success of the product to start with. This is not an Economic theory, but is essential.
Segmenting is nothing but narrowing down your search for buyers in order to find the niche or even a small group of people who can bring in business to the firm.
Segmenting could be Geographic i.e. urban , suburban, density ,climatic , terrain etc.
Segmenting could be Demographic i.e.Age-age groups & generations , Gender , Income , occupation , social class- professional or working calss or housewives,
Segmenting could also be Psycographic i.e. Lifestyle, Personality etc..
The next factor would be the desired Positioning of the product by the buyers.
THis is how the duo or the firm would like the buyers or customers to position their product in their mind, whether they would like the customers to look at it as price effective, or quality centric or style icon etc…you know what i mean.
It is also primary to study the positioning of the competing brands using atributes important to existing and potential customers.
Coming to your second question , firstly it is important that we understand the definition of elasticity , then you will be able to answer the question yourself.
well , Elasticity in general means %age change in one variable resulting from a 1% change/ increase in another variable.
hence, Price elasticity of Demand means, %age change in the quantity demanded of a good resulting in a 1% change increase in the price.
Because, when the price of the good inceases, the quantity demanded by the consumers decrease, thats why the co-effecient of PED( price elasticity of demand) is usually negative.
co-eff of PED could be 1, 0 or -1.
if PED is +1, then the demand for the product is said to be PRICE ELASTIC because %age change in quantity(decline) is more than %age change in price(increase) , in simple words small change in price would result in much larger change in the demand of the product.
if PED is -1, then the demand for the product is said to be PRICE IN-ELASTIC, as the proportionate change in demand isnt too high with percentage increase in price.
NOTE: PED= +1 happens when there is a close substitute..because the price increase wll cause the concumer to buy less if the good abd more of the substitute.
Well, with this information , I hope you will be able to start analysing the scenario and who knows may also become an expert…
Keep challenging yourself..
All the Best..
Tips & Techniques for Using Personal Shopping Services : Department Stores & Personal Shoppers