I have been thinking about the term ‘demand gen’ a lot. It is a much-used term in marketing circles, especially those working in software companies (as I do). But it struck me early on that there wasn’t any clarity about what it actually meant.
Still, I wanted to know what people were talking about, so I asked professor Mark Ritson in a session with MiniMBA alumni. He said that “it’s the performance marketers term for brand building’. Well, I thought, why not just call it that, then?
I also asked people on LinkedIn to explain it to me, but wasn’t really satisfied with any of the answers.
Another place where I saw the term demand creation was in the book ‘Good Strategy, Bad Strategy’. In the chapter called ‘Creating Higher Demand’, Rumelt writes:
“Engineering higher demand for the services of scarce resources is actually the most basic of business stratagems.”
In this chapter, Rumelt describes POM Wonderful’s success selling pomegranate drinks. But upon reading what they actually did to sell more pomegranate juice, it came down to… Regular, solid, marketing. For example, product development:
“The company also began to study ways of packaging and marketing pomegranate juice. The standard industry approach was to dilute an expensive strong-flavored juice with much larger quantities of blander white grape, apple, and pear juices. That was how Ocean Spray sold its cranberry juice. Lynda Resnick suggested a different concept. Their main pomegranate offering would be 100 percent pure with no fillers.”
Positioning:
“It would not be marketed as a soft drink or kids’ sugar kick. Rather, it would be a new category—a fresh, refrigerated antioxidant juice, distributed beside fresh produce.”
Brand development:
“The brand name would be POM with the “O” shaped like a heart. ”
And PR:
“Lynda worked tirelessly to shape the concept, the package, and the marketing approach. She wrote, gave interviews, and introduced POM to every mover and shaker in her huge network of contacts.”
And after reading this, I thought to myself that POM didn’t actually generate demand. Instead, they saw an existing demand for health and wellness, and they positioned their product as the best choice for health-conscious consumers.
This also aligns with what Dale w. Harrison has been sharing on LinkedIn: there is no such thing as demand generation.
What we as marketers can do, is focus on better understanding our customers. What are their needs and wants? What are the category entry points we can try to tie our brand to?
In that way, we can work with existing demand and try to become the preferred brand for customers.
And to all the people still using the term ‘demand generation’… The only thing you are generating is a lot of confusion - at least for me.