Marketing Strategy Coherence with Type of Demand
Understanding the different types of economic demand and the corresponding marketing strategies is crucial for effective marketing. Here are the seven types of economic demand and the marketing strategies typically employed to address each:
1: Negative Demand
Definition: Consumers dislike the product and may even pay to avoid it.
Marketing Strategy
- Educate and Inform: Use informational campaigns to change negative perceptions and highlight the benefits of the product. Example: Campaigns for dental treatments that emphasize the health benefits.
- Rebranding and Repositioning: Improve the product’s image and rebrand it to address concerns. Example: Cosmetic companies rebranding products that were once perceived as harmful.
- Offer Incentives: Provide discounts or free trials to encourage consumers to try the product.
2:No Demand
Definition: Consumers are unaware of or uninterested in the product.
Marketing Strategy
- Awareness Campaigns: Increase visibility through advertising, social media, and public relations. Example: Launch campaigns for new tech gadgets to generate interest.
- Education: Highlight the product’s features and benefits to create interest. Example: Informative content marketing for emerging technologies like AI tools.
- Influencer and Social Proof: Use influencers or testimonials to build credibility and interest. Example: Collaborating with influencers for niche health products.
3:Latent Demand
Definition: Consumers have a strong need that the current product cannot satisfy.
Marketing Strategy
- Product Innovation: Develop and market new products that meet this unmet need. Example: Tech companies creating new gadgets to meet evolving consumer demands.
- Market Research: Conduct research to understand the specific needs and tailor products accordingly. Example: Fitness brands innovating to meet specific exercise needs.
- Highlighting Benefits: Clearly communicate how the new product meets this previously unmet need. Example: Marketing campaigns emphasizing unique product features.
4:Declining Demand
Definition: Consumers are losing interest in the product.
Marketing Strategy
- Rejuvenate Product: Update or modify the product to reignite interest. Example: Introducing new flavors for a declining beverage brand.
- Rebranding: Refresh the brand’s image to appeal to modern consumers. Example: Classic brands updating their logos and packaging.
- Promotional Offers: Use promotions and discounts to attract customers back. Example: Limited-time offers for longstanding products.
5:Irregular Demand
Definition: Demand varies by season, month, or day.
Marketing Strategy
- Seasonal Marketing: Align marketing campaigns with peak demand periods. Example: Holiday-themed promotions for seasonal products.
- Off-Peak Promotions: Offer discounts or special deals during low-demand periods. Example: Off-season travel deals.
- Flexible Supply Chain: Ensure the supply chain can handle fluctuations in demand. Example: Inventory management strategies for fashion retailers.
6:Full Demand
Definition: Demand is at the same level as supply.
Marketing Strategy
- Maintain Quality: Ensure consistent product quality to retain customers. Example: Continuous quality assurance in food production.
- Customer Loyalty Programs: Implement programs to retain existing customers. Example: Loyalty points and rewards for repeat purchases.
- Monitor Competition: Keep an eye on competitors to ensure the product remains competitive. Example: Regular market analysis for competitive pricing.
7:Overfull Demand
Definition: Demand exceeds the capacity to supply.
Marketing Strategy
- Price Adjustment: Increase prices to balance demand and supply. Example: Surge pricing for ride-sharing services during peak times.
- Selective Marketing: Focus on the most profitable segments. Example: Premium products marketed to high-income consumers.
- Expand Capacity: Increase production or find ways to expand capacity. Example: Scaling up manufacturing facilities for popular electronics.
Each type of economic demand requires a tailored marketing strategy to effectively sell products or services. By understanding the nature of demand, marketers can develop strategies that address specific challenges and opportunities, ensuring that their products meet market needs and achieve business objectives.
