Marketing Merely Serves to Stimulate Demand and Is Unnecessary in a Situation Where Demand Exceeds Supply”.

Assignment 2 – Marketing Management

“Marketing merely serves to stimulate demand and is unnecessary in a situation where demand exceeds supply”.

Write an essay giving reasons against the above statement, keeping in mind your learning from this course.

Answer 2:

Before a consumer is motivated to purchase a product, there must be a physical, mental, or emotional need for the product or service. The source of motivation driving consumer demand can be internal, environmental, or psychological. Studies on consumer motivation have led to the development of segmentation or personality profiles that factor traits such as age, sex, income, and lifestyle. Companies can customize their marketing communications strategy based on consumer segmentation to stimulate demand for products and services.

There is a need for proper marketing communication strategy in every phase of product’s life cycle even when the demand is greater than supply. Certainly, when demand exceeds supply, marketing is less important than when supply exceeds demand. But it was never unnecessary. The reasons for requiring a proper marketing strategy in situations where demand exceeds supply according to me are hereunder.

1. Market Development Phase: As the product is new to the market, demand will be high. This is the time when repeated changes are made in the product or service idea that is trying to be developed and hence the supply will be low as there will be continual testing to find the pattern that customers will buy and as there are no marginal competitors for the product yet. At this point, unit prices are high because production and marketing costs are high. So, a proper marketing communication strategy is critically needed in this scenario to reach out and attract the prospective customers. Also the major task to be accomplished during this phase is to generate sales to real customers so you can get feedback about how your product or service really works when the customer...