To create demand

Basic economics mentions how demand creates a supply. It’s effortless and intuitive to understand. People desire particular objects and/or services, and this is exploited by those who provide it to create nifty profits.

But I observed something, and after doing a bit of research, I found an opposite phenomenon that does happen. Supply creating demand. Throw enough chocolates at kids, and they will beg for more.

But the above example does not prove my point. The chocolates are free, so why not capitalize on this opportunity? Children seem to understand economics well enough when it comes to sweets.

The thing which struck my mind about how demand can be created was seeing a big billboard about a coaching class for an engineering college examination. Yes, IIT-JEE. I don’t even need to mention it to Indians, it’s so ubiquitous. For those unaware, JEE is an examination given by high school students to gain entrance into the country’s top engineering institutes. Clearing the test enables parents to get chest-thumping rights and for kids to switch to finance or anything not even remotely related to engineering after they graduate.

The ad proclaimed,

“This Christmas, your success in FTRE is the best gift you can give to yourself and your parents.”

Image taken by a potato

(FTRE being the entrance test of the coaching class for clearing the JEE entrance test. An entrance test to clear an entrance test. Juicy)

This is one way to create demand using tactics, some of which are totally scummy and woeful. Make your product seem like a person must have regardless of whether it should or not. Coaching classes will make your parents believe that without clearing JEE, your child will end up asking for change on the streets, and no girl/boy will marry him/her.

I was mesmerized by the sheer audacity and irked by its shameless appeal to students that having a good score is what makes your parents happy. Thankfully, the offending ad was taken down and doesn’t annoy me anymore when I pass through the route.

Excessive availability of something can create a desire to purchase something. In supermarkets, you might have observed a particular product kept neatly arranged in pyramidal stacks or any other appealing shape. This way, the product stands out to the casual eye. The appeal is created by the simple availability of the product, which overwhelms the conspicuousness of other products. It self advertises by being simply present.

These cracker biscuit boxes seem more captivating than any other product in the picture just by their sheer numbers.

All these demand creators are different from Say’s law which states that the production of a commodity/service creates demand in industries used for the creation of said commodity/service. The law gives importance to production as the driver to economic growth rather than need.

So what is the best way to create demand without being obtrusive, galling, and less reliance on being exceptionally on your nose? It is to focus on the product.

Entrepreneurs know it. The holy grail for them is to find a product that the consumer doesn’t know it wanted. Show the world something which they can’t live with or can find a replacement for once they have used it. The product doesn’t need any advertisement, it gets its name circulated in simple casual conversations. Its popularity spreads due to your usual everyday mention of its usage, and its intrinsic value is comparable or higher than its extrinsic value.

While this school of thought is certainly refutable, the best products always have carried the momenta of successful marketing strategies by themselves.

Necessity is certainly the mother of invention. There are multiple fathers though.