Terms

Demand

Demand is an economic principle that refers to a consumer's desire to purchase goods and services, coupled with their willingness to pay a specific price for them. Generally, this relationship is inverse; as the price of a product falls, the quantity demanded by consumers rises, and as the price increases, the quantity demanded falls. This concept is fundamental to how businesses set prices and how markets function, as it helps determine the value of goods and the volume that changes hands.

Factors Influencing Demand

While a product's price is a primary driver, several other factors can shift the entire demand curve. These elements cause consumers to buy more or less of a good even when its price remains unchanged, reflecting shifts in circumstances and market conditions.

  • Income: Changes in consumers' disposable income directly affect their purchasing power.
  • Preferences: Shifts in consumer tastes, trends, or the perceived quality of a product.
  • Substitutes: The availability and pricing of alternative products that satisfy the same need.
  • Complements: The price and availability of goods that are often used together with the product.
  • Expectations: Consumer beliefs about future price changes or product availability.

Types of Demand

Demand is often categorized by its relationship to other products. Joint demand occurs when two goods are used together, like printers and ink. Derived demand is when the desire for one product stems from another, such as the need for steel in car manufacturing.

Competitive demand applies to products with close substitutes, like butter and margarine. Composite demand describes a single product with multiple uses, where demand for one use impacts its availability for others. These types help businesses understand market dynamics.

Demand vs. Request

While often used interchangeably, in a business context, 'demand' and 'request' have distinct meanings and applications.

  • Demand: This refers to a consumer's desire for a product backed by the willingness and ability to pay for it. It is a measurable economic concept crucial for enterprises to forecast sales, set prices, and manage inventory. While powerful for market analysis, it can be complex to estimate accurately.
  • Request: This is a simpler expression of want, without the inherent financial commitment. For companies, it's useful for gathering customer feedback, feature ideas, or handling internal service needs. It provides direct qualitative insights but doesn't reflect broader market purchasing power or price sensitivity.

Demand in Different Markets

Demand patterns vary significantly from one market to another, influenced by the nature of the goods and specific economic conditions. While market demand focuses on a single product, aggregate demand considers the total demand across an entire economy. These differences lead to unique consumer behaviors in various sectors.

  • Normal Goods: Demand for these items typically rises as consumer income increases.
  • Luxury Goods: Demand can paradoxically increase with price, driven by status and exclusivity.
  • Necessities: Demand remains relatively stable regardless of price or income fluctuations.
  • Substitutable Goods: Demand is highly sensitive to the price and availability of competing products.

Impact of Demand on Pricing

Demand is a key driver of a product's price in the market. When demand for a good increases while supply remains constant, prices tend to rise as more consumers compete for it. Conversely, if demand falls, prices typically decrease as suppliers try to attract fewer buyers. This dynamic helps markets find an equilibrium price.

Frequently Asked Questions about Demand

How does a shift in the demand curve differ from movement along it?

Movement along the curve is caused solely by a change in the product's price. A shift of the entire curve, however, is caused by non-price factors like changes in consumer income or preferences, indicating a change in overall demand at every price point.

What is demand elasticity?

Demand elasticity measures how much the quantity demanded of a good responds to a change in its price. Inelastic demand means quantity changes little with price, while elastic demand means it changes significantly. This concept is crucial for strategic pricing decisions.

How can businesses practically measure market demand?

Businesses measure demand through methods like consumer surveys, market experiments with different price points, and analyzing historical sales data. Statistical analysis and regression models are also used to forecast future demand based on various economic indicators and market trends.

Other terms

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HTTP Requests

An HTTP request is a message sent by a client, like a web browser, to a server to ask for a resource, such as a web page or an image.

HTTP Requests

Pay-per-Click (PPC)

Pay-per-click (PPC) is an ad model where you pay a fee each time your ad is clicked. It's a method of buying targeted visits to your website.

Pay-per-Click (PPC)

Warm Calling

Warm calling is contacting prospects with a prior connection, like a referral or social media interaction, to make your outreach more relevant.

Warm Calling

Google Analytics

Google Analytics is a web analytics service that tracks and reports website traffic, offering insights into user behavior and marketing effectiveness.

Google Analytics

Trademarks

Think of a trademark as a brand's unique signature—a word, symbol, or phrase that legally protects its identity and sets it apart from the rest.

Trademarks

Digital Advertising

Digital advertising is the practice of delivering promotional content to users through various online and digital channels like social media or search engines.

Digital Advertising

B2B Marketing Attribution

Learn about B2B marketing attribution, including challenges in B2B marketing attribution, & key metrics for effective attribution.

B2B Marketing Attribution

Content Delivery Network

A Content Delivery Network (CDN) is a system of distributed servers that deliver web content to users based on their geographic location.

Content Delivery Network

Dynamic Pricing

Dynamic pricing is a strategy where businesses set flexible prices for products or services based on current market demands and other factors.

Dynamic Pricing

B2C2B

Learn about B2C2B, including how B2C2B transforms sales, key strategies for B2C2B success, & differences between B2C2B and B2B2C.

B2C2B

Inbound Lead Generation

Inbound lead generation is the process of attracting potential customers to your business with valuable content and tailored experiences.

Inbound Lead Generation

Reverse Logistics

Reverse logistics is the process for goods moving from the customer back to the seller, covering returns, repairs, recycling, and disposal.

Reverse Logistics

B2B Intent Data Providers

Learn about B2B intent data providers, including evaluating intent data quality, leveraging intent data for growth, & B2B intent data: key providers comparison.

B2B Intent Data Providers

Email Marketing

Email marketing is a digital strategy where businesses send targeted emails to prospects and customers to build relationships and drive sales.

Email Marketing

Data Cleansing

Data cleansing, or data scrubbing, is the process of detecting and correcting inaccurate records from a dataset to improve data quality.

Data Cleansing

User Interface

A User Interface (UI) is the point where humans and computers interact. It encompasses all visual elements like screens, icons, and buttons.

User Interface

Webhooks

Webhooks are automated messages sent by an app when a specific event occurs. They push real-time data to another app's unique URL.

Webhooks

Browser Compatibility

Learn about browser compatibility, including understanding the importance, common challenges, best practices, & tools for testing.

Browser Compatibility

AI Data Enrichment

AI data enrichment uses artificial intelligence to automatically enhance and update raw data, making it more complete, accurate, and valuable.

AI Data Enrichment

Platform as a Service

Platform as a Service (PaaS) is a cloud model where a provider delivers a platform for users to develop, run, and manage applications online.

Platform as a Service

Lead Enrichment

Lead enrichment adds third-party data to your raw lead lists, creating fuller prospect profiles for more effective and personalized outreach.

Lead Enrichment

B2B Sales Channels

Learn about B2B sales channels, including types of B2B sales channels, strategies for effective channel selection, & integrating technology in B2B sales.

B2B Sales Channels

Simple Object Access Protocol Application Programming Interface

A Simple Object Access Protocol (SOAP) API is a web service that uses XML to exchange structured information between different applications.

Simple Object Access Protocol Application Programming Interface

Sales Performance Metrics

Sales performance metrics are key data points that measure a sales team's effectiveness in achieving its goals and driving revenue.

Sales Performance Metrics

Competitive Landscape

A competitive landscape is an analysis of your direct and indirect competitors, revealing their strengths, weaknesses, and market positioning.

Competitive Landscape

Email Personalization

Email personalization uses subscriber data—like their name, interests, or past behavior—to create highly relevant and targeted email campaigns.

Email Personalization

Sales Kickoff

A sales kickoff (SKO) is an annual event for a sales team to celebrate wins, align on goals, and get motivated for the upcoming year.

Sales Kickoff

Logo Retention

Logo retention is a key B2B metric that measures a company's ability to retain its customers, or 'logos,' over a specific period.

Logo Retention

CRM Data

CRM data is the information businesses use to manage customer relationships. It covers contact details, purchase history, and communication logs.

CRM Data

Data Appending

Data appending is the process of adding new data fields to your existing database records to enrich and complete your information.

Data Appending

Nurture

Nurture is the process of building relationships with potential customers, guiding them through the sales funnel with personalized communication.

Nurture

Closing Ratio

Closing ratio is a key sales metric that shows the percentage of leads or proposals that result in a successful sale.

Closing Ratio

Marketing Qualified Lead (MQL)

A Marketing Qualified Lead (MQL) is a prospect who has shown interest based on marketing efforts but isn't yet ready for a sales conversation.

Marketing Qualified Lead (MQL)

Feature Flags

Feature flags let you remotely control features in your app without new code. This enables safe testing, gradual rollouts, and quick rollbacks.

Feature Flags

Cloud Storage

Cloud storage is a service model where data is stored on remote servers and accessed from the internet, rather than on a local drive.

Cloud Storage

Content Rights Management

Content Rights Management involves controlling the use and distribution of copyrighted digital media to protect intellectual property.

Content Rights Management

Value Chain

A value chain is the series of business activities required to create and deliver a product or service, from conception to the final customer.

Value Chain

Sales Pipeline Velocity Formula

The sales pipeline velocity formula is a key metric that measures how quickly deals move through your pipeline and turn into revenue.

Sales Pipeline Velocity Formula

Loss Aversion

Loss aversion is our tendency to feel the sting of a loss more acutely than the pleasure of an equivalent gain.

Loss Aversion

Direct-to-Consumer

Direct-to-Consumer (DTC) is a business model where companies sell products directly to customers, bypassing traditional retail middlemen.

Direct-to-Consumer

Workflow Automation

Workflow automation uses rule-based logic to run a sequence of tasks that would otherwise require manual human effort to complete.

Workflow Automation

Opportunity Management

Opportunity management is the process of tracking potential sales from first contact to a closed deal, helping teams prioritize and win more.

Opportunity Management

Key Performance Indicators

Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively a company is achieving its key business objectives.

Key Performance Indicators

Marketing Attribution

Marketing attribution is the process of identifying which touchpoints contribute to a conversion and assigning value to each of them.

Marketing Attribution

Marketing Operations

Marketing Operations (MOps) is the engine of a marketing team, managing the technology, processes, and people to run campaigns effectively.

Marketing Operations

B2B Data Erosion

Learn about B2B data erosion, including causes of B2B data decay, strategies to combat data erosion, & measuring the impact of data erosion.

B2B Data Erosion

Predictive Analytics

Predictive analytics uses historical data, statistical algorithms, and machine learning to identify the likelihood of future outcomes.

Predictive Analytics

Lead Scoring Models

Lead scoring models rank prospects by assigning points for their behaviors and demographics, helping sales teams prioritize their outreach.

Lead Scoring Models

Challenger Sales

The Challenger Sales model is a methodology where reps teach prospects, tailor their pitch, and take control of the sales conversation.

Challenger Sales

B2B Data Platform

Learn about B2B data platform, including key benefits of B2B data platforms, choosing the right B2B data platform, challenges in implementing B2B data platforms.

B2B Data Platform

Renewal Rate

Renewal rate is the percentage of customers who renew their subscriptions or contracts at the end of their service period.

Renewal Rate

Marketing Qualified Opportunity

A Marketing Qualified Opportunity (MQO) is a lead vetted by marketing as a genuine sales opportunity, ready for direct sales follow-up.

Marketing Qualified Opportunity

Request for Proposal

A Request for Proposal (RFP) is a formal document that outlines a project's needs and invites qualified vendors to submit bids to complete it.

Request for Proposal

Conversion Path

A conversion path is the journey a visitor takes to complete a desired goal, such as making a purchase, filling out a form, or subscribing.

Conversion Path

On-premise CRM

An on-premise CRM is a system hosted on a company's own servers, offering complete control over data, security, and system maintenance.

On-premise CRM

Software as a Service

Software as a Service (SaaS) is a cloud-based model where users subscribe to an application and access it over the internet.

Software as a Service

B2B Data Solutions

Learn about B2B data solutions, including unlocking the power of B2B data, & key components of effective B2B data solutions.

B2B Data Solutions

Process Automation

Process automation uses technology to execute recurring tasks or processes, replacing manual effort to cut costs and boost efficiency.

Process Automation

Gamification

Gamification applies game mechanics like points, badges, and leaderboards to non-game activities to boost engagement and motivate users.

Gamification

Bottom of the Funnel

Learn about bottom of the funnel, including maximizing conversions at the funnel's end, & strategies for nurturing bottom-funnel leads.

Bottom of the Funnel

B2B Intent Data

Learn about B2B intent data, including how B2B intent data enhances sales strategies, sources of B2B intent data, leveraging B2B intent data for competitiveness.

B2B Intent Data

Data Enrichment

Data enrichment is the process of enhancing raw data by adding missing information from other sources, making it more complete and actionable.

Data Enrichment

Customer Buying Signals

Customer buying signals are the actions, behaviors, or statements a prospect makes that indicate they are moving towards a purchase decision.

Customer Buying Signals

Content Curation

Content curation involves gathering, organizing, and sharing the most relevant online content on a specific topic for a particular audience.

Content Curation

Cost Per Click (CPC)

Cost Per Click (CPC) is a digital advertising model where an advertiser pays a fee each time one of their ads gets clicked by a user.

Cost Per Click (CPC)

Voice Broadcasting

Voice broadcasting is an automated system that delivers a pre-recorded voice message to a large list of phone numbers simultaneously.

Voice Broadcasting

Contract Management

Contract management is the process of creating, executing, and analyzing contracts to maximize performance and minimize financial risk.

Contract Management

High Availability

High availability (HA) describes a system's capacity to function continuously with minimal downtime, ensuring consistent operational performance.

High Availability

Branded Keywords

Learn about branded keywords, including identifying your branded keywords, & strategies for optimizing branded keywords.

Branded Keywords

Payment Gateways

A payment gateway is a service that authorizes and processes payments for businesses, acting as a secure link between the customer and the merchant.

Payment Gateways

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is the predictable, recurring income a business expects to receive each month from all active subscriptions.

Monthly Recurring Revenue (MRR)

Video Hosting

Video hosting is a service that allows users to upload, store, and share video content online, making it accessible for playback anywhere.

Video Hosting

Target Account List

A Target Account List (TAL) is a focused list of high-value companies that a business specifically aims to convert into customers.

Target Account List

Closed Question

A closed question is a type of query that elicits a simple, often one-word answer like 'yes' or 'no,' or a specific, factual response.

Closed Question

Sentiment Analysis

Sentiment analysis, or opinion mining, automatically determines the emotional tone behind text—whether it's positive, negative, or neutral.

Sentiment Analysis

Customer Segmentation

Customer segmentation is dividing customers into groups based on shared traits. This allows for more targeted and effective marketing efforts.

Customer Segmentation

GPCTBA/C&I

GPCTBA/C&I is a sales qualification framework for understanding a prospect's goals, plans, challenges, timeline, budget, and authority.

GPCTBA/C&I

ABM Orchestration

ABM orchestration aligns marketing and sales actions across channels to deliver seamless, personalized experiences to high-value accounts.

ABM Orchestration

Lead Scrape

Lead scraping is the process of automatically extracting contact information and other relevant data about potential customers from online sources.

Lead Scrape

Cold Email

A cold email is an initial outreach sent to a potential customer with whom you've had no prior contact, aiming to introduce your business.

Cold Email

Time on Site

Time on site, or session duration, is a key web metric that tracks the total time a visitor spends on your website during a single visit.

Time on Site

Applicant Tracking System

An Applicant Tracking System (ATS) is a software application that manages your entire hiring and recruitment process from a single dashboard.

Applicant Tracking System

80/20 Rule

The 80/20 rule, or Pareto Principle, posits that 80% of results come from just 20% of the effort. It's a key concept for prioritization.

80/20 Rule

Sales Operations Key Performance Indicators

Sales Operations KPIs are measurable metrics that track the efficiency and effectiveness of a sales team's operational processes.

Sales Operations Key Performance Indicators

Account-Based Advertising

Account-based advertising is a hyper-focused B2B strategy that targets key accounts with personalized ads across multiple channels.

Account-Based Advertising

Decision Buying Stage

The decision stage is where a well-researched buyer chooses a vendor. They compare specific products and pricing before making their final purchase.

Decision Buying Stage

CPM

CPM, or Cost Per Mille, is a key advertising metric. It's the cost an advertiser pays for one thousand views or impressions of a single ad.

CPM

CPQ software

CPQ (Configure, Price, Quote) software is a sales tool for creating accurate, configurable quotes for complex products and services.

CPQ software

Retargeting Marketing

Retargeting marketing is a digital advertising strategy that targets users who have previously interacted with your website or brand online.

Retargeting Marketing

Letter of Intent

A Letter of Intent (LOI) is a document declaring the preliminary commitment of one party to do business with another, outlining the chief terms.

Letter of Intent

Sales Performance Management (SPM)

Sales Performance Management (SPM) is a suite of tools and processes that help businesses monitor, analyze, and boost sales team performance.

Sales Performance Management (SPM)

Phishing Attacks

Phishing attacks are fraudulent attempts to trick you into revealing sensitive data like passwords or financial info by posing as a trusted source.

Phishing Attacks

Sales Dashboard

A sales dashboard is a visual tool that centralizes and displays key sales data, metrics, and KPIs to help teams track performance and goals.

Sales Dashboard

B2B Data Enrichment

Learn about B2B data enrichment, including benefits of B2B data enrichment, implementing B2B data enrichment strategies, B2B data enrichment vs. data cleaning.

B2B Data Enrichment

Enterprise

An enterprise is a large-scale organization, often a corporation, defined by its complex structure and substantial number of employees.

Enterprise

Customer Churn Rate

Customer churn rate is the percentage of subscribers or customers who cancel their service with a company during a given time frame.

Customer Churn Rate

Sales Velocity

Sales velocity is a key metric measuring the speed at which your company makes money. It shows how fast deals move through your sales pipeline.

Sales Velocity

Warm Outbound

Warm outbound is a sales strategy for contacting prospects who've shown interest in your brand through prior engagement, like website visits.

Warm Outbound

Vertical Market

A vertical market is a niche where businesses cater to a specific industry or group of customers with specialized needs, not the mass market.

Vertical Market

Signaling

Signaling is using credible actions to convey information about quality or intent to a less-informed party, effectively building trust.

Signaling