From a Model to Today’s Reality

From a basic point of view, we all know that, the price and consequently the market, should be defined by the equilibrium of demand and supply, but how much of this is true in real life?

Thinking about market’s functioning, it is difficult to understand if consumers influence brands’ behaviour or if it is brands which influence customers. The latest developments in Artificial Intelligence and its related effects on the retail industry, would suggest that nowadays, brands are trying to tailor their choices and strategies on customers’ tastes. Through many new marketing techniques, firms are able to identify a specific target and, studying its specific behaviour, they can decide how to build a perfect strategy which is fully personalised. With AI, brands create a new experience for their audience, but at the same time, its aim is to acquire information and data to build and create further strategies.

On the other hand, instead, we have a big movement of brands, influencing people through social media, which are now the main channel to spread the brand culture. Throughout these new means, companies give a message to their audience, regarding both their value in the market and their values as part of the society. However, it is clear that they are able to send the message they want, modifying their images according to what the society wants to see.

Doing that, we see once again, that the brand is influencing a society and its audience, but at the same time it is the audience which is influencing the brand’s behaviour.

This is a “chain” without end for a basic feature of the market: there is no brand without customers and there is no customers without brand. If we go back to the basic model then, we can state that the interconnection between demand and supply, which should in theory define price, can be related to daily operations of the companies as well, where the behaviour of one side is strictly influenced by the choices of the other side.