The timeless art of demand creation!

One of the most coveted arts in the World of marketing is that of demand creation. You need to put in immense energy, tiring efforts and often flex the monetary muscle to create demand for your product, but ones you have that in place, it’s worth everything, and many times it last for a very long period. I can’t think of a better example to kick-off this discussion than what Rockefeller did to create demand for oil. John Davison Rockefeller, now more known for his philanthropic work, was an American industrialist who played a pivotal role in establishing the oil industry. Rockefeller distributed kerosene oil lamps for free to generate demand for kerosene. He also made sure that all the products that used kerosene as a fuel was cheap and available readily in the market. This created the never ending demand for oil in America. Rockefeller started a unique way of marketing in which out of two products, he subsidized the former which is basically useless until you keep buying the latter.

Many industries today follow the same route to create continuous demand for their products. Hardware companies like HP almost give away printers and copy machines for free and make all the money by selling cartridges. The basic principle here remains the same…more the printers in the market, more people will end up using them, hence creating the demand for cartridges. So in fact when HP sells a printer, it doesn’t actually sell a printer, it basically laid the foundation to create demand for cartridges. Most recently, the same concept is followed by the game console companies. Sony, Nintendo and Microsoft sell gaming consoles at subsidized value incurring a loss of up to $200 per piece just to make sure that the customer buys their console. This console sale creates a solid platform for selling the games which provides these companies most of their revenue in this industry. Some other industries following the same path are cell phones, software and cable television.

Another very common way to create demand is by letting people get used to a service for free or less and charging them to keep using it in the future. Everything from non-prescription drugs to online movie rentals to cellphone providers are trying this means to create demand. Ones a person gets addictive to the product or service, it becomes very hard for them to stop using it. Every ones in a while you get an offer by mail asking you to try something for free for a month. That’s the perfect spark, which leads to a long lasting demand for that product. Many subscription based services follow this model to attract customers and create demand for their product.

One unique way to create demand is by maintaining a “long tail”. This is getting very common in the Internet era, where companies have a luxury not enjoyed by the retailers with limited shelf space. This is how it works: you are looking for some particular novel written by your favorite writer long time back. You checked all the retail stores in the neighborhood but no one carry it anymore. Now you go to this book store on Internet which happens to have the novel. This makes this store take that special place on your to go list and next time you are looking for any book, you might directly end up here. So in a way by maintaining this long tail, which is accessed every ones in a while, these virtual stores on the Internet are creating a demand for their service. Same principle is being used by search engines, download services and online communities to create demand for their service on the Internet.

The great art of demand creation timeless. It was around ages ago, it is there now and it will be reinvented many times in the future as well. Marketing organizations use new methods every now and then to create demand for their products and services. How many people can live without a cell phone, a car or even an online search engine after using it for sometime? Most of us can’t, we got to have it creating continuous demand for either these products or the products required to run them.

One response to “The timeless art of demand creation!

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