The 8 States of Demand for a Product - The 8 States of...

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The 8 States of Demand for a Product When individuals seek to buy a product to satisfy a need, they create demand. The definition of demand in marketing is the same as that used by economists. Demand is call or desire for a particular product the consumer wants to satisfy their needs. Economists assume that market demand can be aggregated, and represented on a chart using one downward sloping line. Philip Kotler, regarded as one of the most influential researchers in marketing, found that market demand is not so neatly linear. His research proved that market demand for a product actually has different states, and the state in which the market is in, in turn, determines the profitability of the product. Skilled marketers seek to influence the concentration, timing and type of demand. 1. NEGATIVE DEMAND Negative demand arises when the targeted market dislikes the product offered. They actively avoid it, and actively dissuade others from consuming it. During the early 1990s, Nike outsourced the production of their athletic shoes to countries with extremely low workplace safety standards. Employees worked under conditions similar to sweatshops described in Charles Dickens’ novels about British industrialization. At first, Nike claimed they were not responsible for their suppliers’ activities. Years of bad press and protests by social welfare groups started to affect shoe sales, causing Nike to start forcing their suppliers to allow independent inspectors audit the conditions of the sweatshops. 2. NO DEMAND During a period of no-demand, a customer is unaware of the product or is disinterested. This type of demand is commonplace for new products that serve a need or want that the customer is unaware can be satisfied. Many call this situation a “a solution looking for a problem.” To overcome this critical issue, the producer must continue to tweak the product in search of the “killer application” that satisfied the need. A good example is the 3G cellphone. Despite the widespread popularity of earlier versions of cellphones, manufacturers of the third generation, or “3G” phones as they were called, found themselves in a state of no demand; the 3G phone
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This note was uploaded on 02/22/2012 for the course ECONOMICS 15 taught by Professor Student during the Spring '12 term at American College of Computer & Information Sciences.

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The 8 States of Demand for a Product - The 8 States of...

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