The demand triangle model
Marketing has various interpretations, but its main objective is to create demand for a product or service. This involves studying how to meet the needs of consumers in order to achieve business objectives. The formation of user demands can be explained by the demand triangle model, which includes a sense of lack, a target object, and consumer capability.
The sense of lack is the first stage of demand formation. All demands stem from some sense of lack. In other words, without a sense of lack, there can be no demand. For example, when a female college student carries a bag worth 200 yuan while studying, she may feel satisfied with it. However, after starting work and seeing that everyone around her carries bags worth over 1,000 yuan, she will experience a sense of lack.
The second stage of demand formation requires a clear target object. Different target objects can arise from the same sense of lack. For instance, the same female college student may feel a lack of presence when she first starts working, and carrying a more expensive bag may be her target object for enhancing her presence. However, some people may focus on enhancing their presence by performing better at work or impressing their boss. This depends on individual values.
With a sense of lack and a target object in mind, motivation is formed. But that’s not enough to create demand. The third element required for demand formation is consumer capability. The ability to make purchases is not just about economic payment ability, it also includes a consumer’s ability to learn and their trust cost. In short, after shaping motivation, consumers must be empowered to ultimately make a purchase.
All needs must satisfy these three factors, and if any one is lacking, the final need cannot be formed. So how can the demand triangle be applied specifically? First, a sense of lack must be established. A sense of lack is the difference between a consumer’s ideal and reality. If you want people to make changes, you need to connect the product with their potential sense of lack.
For example, a young man who had never thought about getting married was told by a dating website that “someone similar to you has already gotten married, and this person’s conditions are not as good as yours.” At this point, the young man’s psychological gap was stimulated. A sense of lack appeared, and he wanted to fill it, thus creating a business opportunity.
Good marketing must establish a connection with the consumer’s sense of lack. Many failed marketing and products focus more on the company’s own needs and fail to connect with other people’s sense of lack, resulting in no demand being formed. Therefore, you need to constantly research where people’s sense of lack is, and how to make them need you more. This is marketing.
The last point is consumer ability. Sometimes your product has already impressed the consumer, but they ultimately do not make a purchase because the cost of change is too high and exceeds their willingness to buy. To convert motivation into demand, you need to empower consumers. Lowering decision-making costs and making it easier for people to make choices are all forms of empowerment.
In terms of costs, the most familiar one is monetary cost, which can be reduced by methods such as price cuts and promotions. However, monetary cost is only one of the obstacles that prevent people from taking action; there are other costs, such as action costs. Here is an example of the Boston Symphony Orchestra.
In order to attract more people to listen to symphony music, the Boston Symphony Orchestra made great efforts to popularize symphony music education, but the effect was not very good. Later, they found that many people did not go to listen to symphony music not because they were not interested, but because the location of the symphony orchestra was difficult to find and parking was inconvenient. So they renovated the parking lot and provided navigation services to reduce people’s action costs. The number of people who went to listen to symphony music increased significantly.
In addition, there is an example of learning cost. People have the motivation to edit photos, but the learning cost of professional photo editing software is too high, making it difficult to popularize. So there is a picture editing app, which can quickly make photos look beautiful with just one click and has quickly become popular in the market.
Empowering consumers can be achieved in various ways. One way is to simplify the decision-making process. When consumers face too many choices, they may feel overwhelmed and give up making a decision altogether. Therefore, reducing the number of choices and simplifying the decision-making process can help consumers make decisions more easily.
Another way is to provide more information. When consumers have more information about a product or service, they are more likely to make a decision. For example, providing detailed product information, customer reviews, and comparison charts can help consumers make informed decisions.
In addition, providing incentives can also empower consumers. For example, offering discounts, free samples, or loyalty programs can encourage consumers to make a purchase. Furthermore, improving the overall customer experience can also empower consumers. When consumers have a positive experience with a product or service, they are more likely to become loyal customers and recommend the product or service to others.
Empowering consumers is not only beneficial for businesses but also for consumers themselves. When consumers feel empowered, they are more likely to make informed decisions and feel satisfied with their purchases. This can lead to increased customer loyalty and positive word-of-mouth marketing for businesses.
In conclusion, empowering consumers is an important aspect of marketing. By reducing decision-making costs, providing information, offering incentives, and improving the overall customer experience, businesses can empower consumers and increase demand for their products or services. In order to create demand, companies must establish a connection with consumers’ sense of lack, provide clear target objects that align with their cognition, and provide a clear path to achieve those targets. By following these principles, companies can create successful marketing strategies that lead to increased demand and sales.
