What is the demand in marketing

Marketing demand

Active satisfaction of needs

In the sense of the national economy and a marketing system, demand is the sum of money that is actively implemented in the market in order to satisfy needs. It is the actual purchasing power that is given in the market system and is the final value in terms of customer demand, which has its starting point with the need.

Demand: the higher the demand, the higher the turnover

Because at the beginning there is the need that you need something and this gives rise to the desire to want to acquire something. It follows the purchasing power as another economic term, how many of the wishes one can afford and finally there is the demand.

The difference between purchasing power and demand is that purchasing power represents the possibility of being able to buy products; demand is actually trading on the market and thus the amount that can be used on the market. Purchasing power varies depending on the region and the type of market; it is far higher in the industrialized countries than in the poorer regions of the world.

However, purchasing power itself does not mean that the money available is actually being spent. So it may well be that part or even a considerable part is withheld and saved because one has a big goal. The demand represents the interest in products that actually takes place on the market and thus the concept of turnover from the perspective of the company can also be used here.

example

If someone has 1,000 euros available, minus his fixed costs, and he buys for 300 euros, then the purchasing power is 1,000 euros, because this is the amount he could buy. The demand, on the other hand, is significantly lower at 300 euros, because this is the amount that the person actually bought and that is also the turnover of all companies where the purchase was made. It doesn't matter whether it was food or a new hard drive. From the point of view of the market, 700 euros are missing here, which the person might want to save on a large investment.

Marketing and Demand

The higher the demand, the more it changes the well-known saying of "supply and demand", which means that the market is in the pricing phase. The stronger the demand, the greater the interest in appearing as a provider. However, this is not possible with every product and not in every sector, so the market situation does not always change.

This means that many individual parameters are available that make up the market and the customer's wishes are always the engine. You can try to drive this engine with advertising, but if there is an economic crisis, people will still not use their purchasing power to the full, but instead put some money aside.

However, the stronger the demand, the more dynamically the market develops, even where it was assumed that it could be saturated. If you have enough money, you might buy more expensive groceries after all, or you might buy more fashion items than you would need. You might go to dinner more often or to a concert that you couldn't afford before.

But it also depends on how people think. Many worry about a possible economic slowdown and save for bad times. In other words, they have money, but they don't want to spend it and here one tries to motivate them to take advantage of an offer. If someone wants to save on a specific goal such as an apartment, a car or other typical large projects, then little will be achieved. If a person saves out of emotion without a specific goal, you may be able to easily increase demand if you offer the right offer.