How do we decide?...

In businesses, it is important to know the demand of the customers as well, and what, how and when to produce goods and services.
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How do we decided what to produce?

Well, businesses can usually decide what to produce by analyzing the demand of their target consumers. It can also be decided from the region the target of customers are from as the culture can differ in different areas of the world. Therefore, the main influence on how we decided what to produce is CUSTOMERS.

When market research is carried out, the things that should be researched on is what the customers usually

• need (daily necessities: food, toiletries etc.) and 
• want (technological gadgets, entertainment products etc.). 

Often, trends and norms should be observed in order to know what is 'hot and selling'

• (for example: the current craze for smart phones and tablets). 

Studies should also be done on the consumers:

• What is the biggest trend in the group of consumers? 
• What is the main age group of the consumers? 
• (This can determine what kind of products to produce. For example, if there are many students in the consumer target group, then stationary, notebooks, textbooks and revision books can be produced. If there are a lot of working adults in the target group, then technological devices, laptops and organizational tools would be produced. If there are a lot of families with young children in the area, then children products and toys can be produced as well.)
• How are they attracted to products? 
• (This will determine how the products are to be packaged and marketed)
• What are the traditions and festivals in the local area? What is the geographic location of the target area?
• (E.g.: In Malaysia, there are many different cultures and customs from the range of different ethnic groups of the population. Businesses have to produce products that fit the culture. The products they produce in a certain region that may be very popular may be very usefulness in other regions. Like selling winter coats in a tropical country. As there is not a need for it, the demand for winter coats would be extremely low and therefore the business may suffer.)

After conducting research on consumers, business would then have to consider many factors in their business to analyse whether the production of certain products are possible. Factors that may influence this includes:

• The type of product to be produced (does it require raw materials? Is machinery required? Is a large plot of land needed?)
• The physical factors (the geographic location of the factory, the weather, etc.)
• Economical factors (how much am I allowed to spend on the production of these products? Will the sales money be enough to break even and make a profit?)
• Do I have enough manpower?
• Governmental policies (is the production of my product allowed by the local government?)
• What kind of product would be the most attractive to consumers yet cheap to produce?

BBC. "Factors Affecting Farming." BBC News. BBC, n.d. Web. 11 Dec. 2012. <http://www.bbc.co.uk/bitesize/standard/geography/farming/farming_system/revision/2/>.