Coming back to my previous post about this topic.
In macroeconomics, demand means the following:
Demand: all of the quantities of a good or service that buyers would be willing and able to buy at all possible prices; demand is represented graphically as the entire demand curve. (Source: Khan Academy Macroeconimics course)
It’s important to understand that demand is always visualized as a curve, meaning that the quantity demanded by the market at each pricepoint is taken into account:
From the course:
In a competitive market, demand for and supply of a good or service determine the equilibrium price.
The law of demand Markets have two agents: buyers and sellers. Demand represents the buyers in a market. Demand is a description of all quantities of a good or service that a buyer would be willing to purchase at all prices. According to the law of demand, this relationship is always negative: the response to an increase in price is a decrease in the quantity demanded.
Let’s take an example: Peugeot running ads for their newest Peugeot 2008.
Will this increase demand for cars? No. If the campaign is effective, it will make existing demand (people already planning to buy a car) consider a Peugeot over other brands.
So, Peugeot is not trying to increase demand for cars. They are building and reinforcing memory structures so people prefer a Peugeot over other car brands.
That’s not to say that demand can’t change. Let’s say a country makes it easier to get a driver’s licence. That would be an example of a change in regulation that influences demand.
For some reason, marketers in the software space think they can influence demand by doing marketing activities, such as creating and distributing content, holding webinars, and organizing events.
I asked a self-proclaimed demand generation expert what ‘demand gen’ actually means. He said:
“Broadly speaking, demand generation is a marketing strategy that includes any activity that drives awareness and interest in your product or service.”
If that’s the case, I would like to suggest that we just call it brand marketing, branding, or top of funnel marketing, instead of abusing the existing term ‘demand’ in this way.
Why does this matter:
Using accurate terms helps marketers build credibility. Many of us want a seat at the table with leadership or struggle to align with CFOs.
Inventing new definitions for established terms isn’t the way to get (or keep) that seat.