Download Eight different states of demand

Shift of Demand Versus Movement Along a
Demand Curve
The Demand Curve
ANNA'S DEMAND
SCHEDULE FOR
TELEPHONE CALLS
QUANTITY
PRICE
DEMANDED
(PER
(CALLS PER
CALL)
MONTH)
$
0
30
0.50
25
3.50
7
7.00
3
10.00
1
15.00
0
© 2002 Prentice Hall Business Publishing
• The demand curve is
a graph illustrating
how much of a given
product a household
would be willing to
buy at different prices.
Principles of Economics, 6/e
• A change in demand is
not the same as a change
in quantity demanded.
demanded.
• In this example, a higher
price causes lower
quantity demanded.
demanded.
• Changes in determinants
of demand, other than
price, cause a change in
demand,
demand, or a shift of the
entire demand curve, from
DA to DB.
Karl Case, Ray Fair
© 2002 Prentice Hall Business Publishing
A Change in Demand Versus a Change in
Quantity Demanded
Principles of Economics, 6/e
The Law of Supply
Price of soybeans per bushel ($)
To summarize:
Change in price of a good or service
leads to
Change in quantity demanded
(Movement along the curve).
Change in income, preferences, or
prices of other goods or services
leads to
• The law of supply
states that there is a
positive relationship
between price and
quantity of a good
supplied.
6
5
4
3
2
1
0
0
10
20
Principles of Economics, 6/e
30
40
Thousands of bushels of soybeans
produced per year
Change in demand
(Shift of curve).
© 2002 Prentice Hall Business Publishing
Karl Case, Ray Fair
Karl Case, Ray Fair
© 2002 Prentice Hall Business Publishing
Eight different states of demand:
Negative demand – vaccines, dental work, gallbladder operation.
No demand – demand for foreign language course, new farming method.
Latent demand – demand for fuel-efficient cars, good neighborhoods.
Declining demand – product life cycle.
Irregular demand – seasonal demand.
Full demand – Org. is pleased with volume of business.
Overfull demand – demand for more than the production.
Unwholesome demand – demand for socially unacceptable products.
50
• This means that
supply curves
typically have a
positive slope.
Principles of Economics, 6/e
Karl Case, Ray Fair
Marketing Concepts and Tools:
Definition of marketing:
There are two types of definitions that can be applied to Marketing.
 Social definition – process to deliver a higher standard of living
 Managerial definition – the art of selling products
The American Marketing Association says – “Marketing is a process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual or
organizational needs”.
Market Segmentation – dividing the market based on demographic, psychographic, and behavioral differences.
Target Markets – deciding which/what segments presents the greatest opportunity.
Marketplace – physical place ex. Shop where people go for shoping.
Marketspace – digital process, shoping over the net.
Metamarketing – cluster of complementary products and services that are closely related in the minds of
customer.
Marketer – is a person seeking response from another party/prospect.
Needs – basic human requirements.
Wants – needs becomes want when they are directed to specific objects and might satisfy the needs.
Demand – wants of specific products backed by an ability to pay.
Benefits
Value = -------------------Costs
/* Know five ways to adjust values
Marketing Mix: the set of marketing tools the firm uses to pursue its marketing objectives. There are four P
components of the marketing mix:
Marketing Mix
Product –
Product variet,
quality,
design,
features,
brand name,
packaging,
sizes,
services,
warranties,
returns
Price
List price
Discounts
Allownces
Payment period
Credit items
Promotion
Sales promotion
Advertising
Sales force
public relations
Direct marketing
Place
channels
coverage
assortments
locations
inventory
transport
Promotion Mix:
Four P’s presents from the seller point of view the marketing tools available for influencing buyers.
Four C’s presents from the buyers point of view the marketing tools available for benefiting customers.
Four P’s
Four C’s
Four A’s
Product
Customer solution
Acceptability
Price
Customer cost
Affordability
Place
Convenience
Accessibility
Promotion
Communication
Awareness
Company orientation and marketplace:
Company response and adjustments:
Companies are changing the following ways:
 Reengineering – restructuring the org.
 Outsourcing – decapitalization
 E-commerce –
 Benchmarking – world-class performenrs
 Alliances- increase friends or minimizing competitors
 Partner-suppliers –
 Market-centered – organize by market segments
 Global and local – glocal
 Decentralized – initiative and intrepreneurship (creativity and passion of the guerilla marketing, start
living with customers, visualizing the new ways to add values) at the local level
Profit
ROI = ------------Capital
Marketer response and adjustments:
Here are the marketing themes of the new economy:
Customer lifetime value – product at lower rate for long period to a customer.
Customer share – offering larger variety of goods to the existing customer
Customer database –collecting sales data to build a larger data warehouse
Customer relationship marketing – focus on profitable customers, products and channels
Target marketing –
Integrated marketing communication –
Model-based decision making –decision on models
Every employee a marketer – every employee must be customer based
Customization –
Internal marketing Channels as partners –
Integrated marketing communication –
External marketing –