Out of the Box

Creating Demand that Does Not Exist

By Menachem Lubinsky on May 09 2008

Americans will soon receive checks from Uncle Sam, courtesy of a special tax rebate that President George Bush hopes will stimulate the sluggish economy. Major retailers were drooling at the prospect of all that extra cash that might be spent in their stores. But according to a Reuters/University of Michigan survey, 70% of the consumers polled plan to take a “precautionary” approach, saying they would use the rebate to bolster their personal balance sheets. Amongst those, 25% favored using the money to rebuild savings, while 45% plan to repay debt, the survey showed.

Only 30% of consumers plan to spend the tax rebate in 2008, according to the survey.

Still, 30% is a hefty number and many stores were planning on special promotions to attract consumers to their stores. Marketers divided the consumers who will be using the money to purchase goods into two groups: those who are likely to buy items that they have shelved until they receive the extra cash and those who will buy something they never planned on buying. But how do you get the consumer to buy something they may not need or goods that were never on their radar screen?

A large electronic store is planning to run a huge promotion on GPS devices. It assumes that many customers are looking to buy a GPS, but the store is planning to run a promotion for the non-conventional consumer. It is planning a series of postcard-like promotions that address businessmen, the elderly, women and even delivery people. For example, its promotion for women showed a woman in a van with several of her children in the back, apparently on the way to school. The ad said: “Sure she’s driving in familiar territory but traffic is never predictable.” I am not sure what the ad was really trying to say, but perhaps it was merely trying to create a demand with a group that might not consider buying the small device.

Creating demand that may not exist requires a great deal of creativity. Marketers of the waterbed stressed the therapeutic value as well as the fun, hoping that it would be enough of a stimulus to spur sales of the non-conventional bed. A folding cane for the elderly showed a senior citizens unfolding the cane and using it to fetch a box of cereal on an upper shelf in a supermarket.

I have spoken to many retailers that have products on their shelves that consumers simply don‘t appear to need, which means that the item is moving slowly. One store showed me an insert for a drawer that neatly stocks socks. While his other accessories like racks for shoes and tie racks sell well, he simply could not sell the socks rack. He ended up making contact with contractors and home designers and the product began to move. He also put up a huge poster with “Take Stock of Your Socks” which also seemed to help move the product.

Developing a demand is not a new phenomenon in marketing. Many people with new products, particularly in technology, are involved in actively figuring out ways to create demand. They sometimes discover the trigger point by trial and error. In many instances, despite all efforts, the product simply dies.

Marketers say that some promoters of products try to do too much. Their goal should be to achieve trial in the hope that it will lead to awareness and ultimately to loyalty, a road map that spells success in marketing. Food marketers know that despite all their advertising, there is no replacement for tasting the product. A good product will always take off from that point. A flawed product will, of course, never make it.

Sometimes it becomes necessary to make an adjustment in the usage in the product. Imagine the manufacturer of a fancy plunger who succeeded when he sold the plunger along with matching accessories, dramatically increasing sales. Cereal companies who market the cereals as a snack food in addition to a breakfast food hope to create an increased demand for a product looking to break out of its traditional shell.

There will be a strong effort by stores to stimulate demand for certain products in an effort to get their hands on the money of the 30% of consumers who will by goods with the tax rebate. Some will be very direct in their advertising, urging consumers to buy products that they might not need. “Treat yourself to” might be the tag line for many goods and services. A West Coat Spa is planning to market a package that an average consumer could buy at the Spa with the money from the rebate.

The Spa people have an affluent base of consumers but are hoping that the tax rebate will give them an opportunity to reach out to a group of consumers that they could not touch previously. They will have to create demand with a group of people that do not consider going to a Spa a necessity, but rather a luxury.

Success in creating demand spells success in profits, an exercise well worth the effort and investment. It will be interesting to see how the stores manage to grab a big chunk of the rebate dollars.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.