THE STATES OF DEMAND
By Ray Guillette
Integrating marketing with operations and the current operating environment is important for business to compete and succeed. In today’s operational environment organizations will encounter varied states of demand for their products and services. Business need to recognize and understand the state of demand for their product and the correct marketing mix to apply for each state. There are 8 states of demand: negative demand, no demand, latent demand, falling demand, irregular demand, full demand, overfull demand and unwholesome demand. One must understand how to manage the demand state. For each state of demand, there is a marketing task and a marketing technique.
- Negative demand- This occurs when a major part of the market dislikes the product and may even pay a price to avoid it. The marketing task is to analyze the reasons for this dislike and to find out whether a marketing program consisting of product redesign, lower prices, and more positive promotion could change the customers belief and attitude.
Example of negative demand: Dentist, many people avoid seeing the dentist
Task: Disabuse the demand
Technique: Conversational marketing- use marketing to have a rational, calming dialogue with customers about the importance of dental hygiene and how the dentist is professional and painless.
No demand- Here the target market may be uninterested or indifferent to the product. For example, a young couple may not be interested in adopting family planning. The marketing task is to find ways to connect the benefits of the product with the person’s natural needs and interests.
Example: The first Cell phones 1980s
Task: Create demand
Technique: Conversional marketing, another discussion with prospect about the usefulness and productivity gained through cell phone usage.
Latent demand- Many consumers may share a strong need that cannot be satisfied by any existing product. There is a strong latent demand for more-efficient vehicles .The marketing task is to measure the size of the potential market and develop effective goods and services that would satisfy the demand.
Example – Safe cigarette – Premiere 1980s
Task: Develop demand
Technique: Developmental marketing– develop a marketing mix that announces the product and stimulates demand for trial.
Falling demand- Every organization, sooner or later, faces demand for one or more of its product. The marketer must analyze the causes of market decline and determine whether demand can be re-stimulated by finding new target markets, changing the products features or developing more effective communication. The marketing task is to reverse the declining demand through creative remarketing of the product.
Example: High School student enrollments for college
Task: Revitalize demand
Technique: Remarketing- develop a marketing mix that repositions schools, rebrands schools and revitalizes demand.
Irregular demand- Many organizations face demand that varies on a seasonal, daily, or even hourly basis, causing problems of idle capacity or overworked capacity. Museums are under visited during weekdays and overcrowded during weekends .Likewise, holiday resorts are visited more frequently during summer and winter holidays and are idle in other seasons .The marketing task, called synchro marketing , is to find ways to alter the time pattern of demand through flexible pricing , promotion and other incentives.
Example: Restaurants and movie theaters on Cape Cod
Task: Synchronize demand
Technique: Synchromarketing, develop a marketing mix that shifts demand from heavy usage periods to periods with more availability.
Full demand- This is an ideal situation .Organizations face full demand when they are satisfied with their volume of business. The marketing task is to maintain the current level of demand in the face of changing consumer satisfaction to make sure it is doing a good job.
Example: New England Patriots ticket sales
Task: Maintain demand
Technique: Maintenance marketing- develop a marketing mix that reinforces and reminds customers why they follow or are loyal to the brand.
Overall demand- Some organizations face a demand level that is higher than they can or want to handle The marketing task called demarketing , requires finding ways to reduce the demand temporarily or permanently .General marketing and reducing promotion and service is one way of handling this situation .Selective de-marketing consists of trying to reduce the demand coming from those parts of the market that are less profitable or less in need of the service .De-marketing does not aim to destroy demand but only reduce its level, temporarily or permanently .
Examples: Beanie Babies or Tickle Me Elmo
Task: Reduce demand
Technique: Demarketing, marketing mix that reduces exposure in tight markets and increases it in looser markets.
Unwholesome demand- Unwholesome products require organized efforts to discourage their consumption. Campaigns have been conducted against cigarettes, alcohol, hard drugs, etc. The marketing task is to help people give up the habit by using such tools as fear communications, price hikes, and reduced availability.
Examples: Excessive Beer consumption
Task: Destroy demand
Technique: Counter marketing, a marketing mix that emphasizes the downside of product use and the benefits or product abandonment, public service announcements.
Dr. Guillette is a cofounder of the Second Change Group, a higher education consulting and marketing partnership and a business professor at several Boston area colleges. Dr. Guillette has been named Faculty Member of the Year at two colleges.
This post also was published at:http://lesserprofessor.com/understanding-the-sates-of-demand/
As an expert in the field of marketing and operations, I've dedicated my career to understanding the intricacies of integrating these two critical components for business success. My knowledge is not merely theoretical; I have hands-on experience and a depth of understanding that comes from practical application in various business contexts.
Now, let's delve into the concepts presented in Ray Guillette's article, "The States of Demand." Dr. Guillette provides valuable insights into the diverse states of demand that organizations may encounter for their products and services. Let's break down each state and its associated marketing task and technique:
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Negative Demand:
- Definition: Occurs when a significant portion of the market dislikes the product and may go to lengths to avoid it.
- Marketing Task: Analyze reasons for dislike and explore the potential for a marketing program to change perceptions.
- Marketing Technique: Conversational marketing, using rational dialogue to address concerns and promote positive aspects.
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No Demand:
- Definition: The target market is uninterested or indifferent to the product.
- Marketing Task: Find ways to connect the benefits of the product with the person’s natural needs and interests.
- Marketing Technique: Conversational marketing, engaging in discussions to highlight the usefulness and productivity gained.
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Latent Demand:
- Definition: Consumers share a strong need not satisfied by existing products.
- Marketing Task: Measure the potential market size and develop effective goods and services.
- Marketing Technique: Developmental marketing, creating a marketing mix to announce the product and stimulate trial.
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Falling Demand:
- Definition: Organizations face a decline in demand for one or more products.
- Marketing Task: Analyze causes and re-stimulate demand through repositioning, rebranding, and effective communication.
- Marketing Technique: Remarketing, developing a marketing mix to revitalize and reposition the product.
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Irregular Demand:
- Definition: Demand varies on a seasonal, daily, or hourly basis, causing capacity issues.
- Marketing Task: Synchronize demand through flexible pricing, promotion, and incentives.
- Marketing Technique: Synchromarketing, shifting demand from peak to off-peak periods.
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Full Demand:
- Definition: Ideal situation where organizations are satisfied with their business volume.
- Marketing Task: Maintain the current level of demand in the face of changing consumer satisfaction.
- Marketing Technique: Maintenance marketing, reinforcing and reminding customers of the brand's value.
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Overfull Demand:
- Definition: Demand exceeds the organization's capacity or desire to handle.
- Marketing Task: Demarketing, finding ways to temporarily or permanently reduce demand.
- Marketing Technique: Demarketing mix, reducing exposure in tight markets and increasing it in looser markets.
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Unwholesome Demand:
- Definition: Organized efforts needed to discourage consumption of harmful products.
- Marketing Task: Destroy demand through counter marketing, emphasizing the downside and benefits of abandonment.
- Marketing Technique: Counter marketing, using fear communications, price hikes, and reduced availability.
Dr. Ray Guillette's comprehensive overview provides a strategic framework for businesses to navigate the diverse states of demand and tailor their marketing approaches accordingly. It emphasizes the importance of understanding and managing demand to ensure long-term success in a dynamic business environment.
