Discuss supply and demand in the industry

Many factors come into play when weighing out supply and demand. Consumer taste is usually the heaviest factor. The recession has caused a downfall in brand loyalty. Consumers are no longer with buying their usual labeled products, which they believe to have greater product utility, but rather have begun purchasing what is cheap and effective.  A more price-conscious orientation among consumers has resulted in an increase in the “buy down” phenomenon, when consumers buy less expensive brands in order to reduce household expenses and save money. Nearly 46% of consumers have cut back on spending on home improvement, therefore reducing demand for household appliance staples, such as a fridge or dishwasher. Private label products, products or services typically manufactured or provided by one company for offer under another company's brand, are becoming increasingly popular during this difficult economic period, because they are typically a cheaper alternative to regional, national or international brands. In order to remain competitive in the slowing market, and keep up with the change in consumer spending, regional, national, and international brands have been creating frugal substitutes for their usual high-end, high-priced options. P&G is one example of a brand which has taken advantage of this strategy. P&G offers at least two product forms in many product categories. For example, the company has seen increases sales in Luvs from Pampers diapers and an increase in Gain detergent sales from Tide. In addition, P&G offers "Basic" versions of its Charmin toilet paper and Bounty paper towels. The company's broad offerings, combined with the necessity of household items, provide a degree of insulation against recession. Anther strategy that manufacturers are using is, to demonstrate superior value to private labels or more economical options. Multinational corporations must attempt to develop a brand that other retailers can’t copy. Focus on brand attributes that are difficult for retailers to replicate, such as exclusivity, product safety, social causes, innovation and sustainability. They should also think local, Identify regional or local variations in tastes and preferences and use them to create new and unique products that can compete effectively against the localized offerings of private labels. Brand labels must make it hard for private labels to copy them. Building customer loyalty, by creating a personal relationship with costumers, is also an effective way to ensure return buyers.