It doesn’t matter, LarryE needs me in this debate like Michael Jordan needed needed the post presence of of Bill Wennington.

New demand vs increasing market share, from a specific company’s POV, both are elements of demand. Demand for the products that company sells.

Ted -

I direct your attention to the initial question asked by Tgirsch.

I direct you attention to Tgirsch at #15:

The specific example we were working with was the “Super Size” promotion at McDonald’s. … Were they simply responding to an existing consumer demand, or were they manipulating consumer demand?

Manipulation of demand was the topic. That is what seems “clear.”

And if you think marketing is just about letting people know a product exists….

Oh, don’t be silly. I said that in your proposed absence of marketing, overall demand would decline – because one of the purposes of marketing is to alert potential consumers to its existence. No marketing yields reduced knowledge yields reduced consumption which would be defined as reduced demand.

On the other hand, your examples are more about choice and brand loyalty than generating truly new demand. It’s not about selling soda, beer, cars, software; it’s about which soda, beer, car, software. And that’s a different topic.

I believe Tgirsch was asking the question “can a company increase the demand for its product(s) or must it accept the level of demand as fixed and simply compete for its piece of that fixed pie”. My interpretation of the question is based on numerous debates about demand, supply and other topics related to economics with Tgirsch. And he did title the post “Economics Debate”.

In this context, I believe the term “demand” is being used in the classical sense (ie number of units purchased as a function of price).

My answer to Tgirsch’s question is yes, demand can be increased by a company, and the most obvious way is via advertising. Effective advertising increases the number of units purchased as a function of price. In fact, that is the primary (and almost exclusive) objective of advertising.

So please disregard my previous comments and treat this one as my definitive statement on the subject.

You then state you have a degree in economics and follow that with a statement about leaving traditional economics behind and getting into marketing, etc.

So which is it? In 17 you bring in the impact of marketing and then in #25, you remove the impact of marketing.

Now one of the assumptions made when the topic is introduced at this level is that individual suppliers can not impact the supply curve. This (and other) assumptions must be made so the rest of the subject manner can be covered in a finite amount of time (digg would be muzzled on day two). In more advanced classes some of the initial assumptions are relaxed and the possibility of a supplier impacting the demand curve is examined. Believe me, things get complicated in a big hurry.

In any event, in a basic economic sense, the term demand refers to the number of units purchased at a specific price point. And yes, I do have a degree in the subject.

Now if you want to delve into the factors behind the demand curve, then you are leaving traditional economics behind and are moving into marketing, advertising, psychology, sociology and a host of other disciplines.

The desire aspect can be manipulated by companies. However, there is only limited ability to affect ability and willingness. Those are factors outside of most companies’ positions. Thus, while desire can be affected, overall demand can not be created by companies.

Number9 > Apple was aware of a pent-up demand for a product that would provide what the i-pod does. They then went about creating a product designed to meet that perceived demand.

And if you think marketing is just about letting people know a product exists, well Coke, Budweiser, Honda, Microsoft, and the other Fortune 500-ish companies that comprise a very healthy percentage of the MSM advertising revenue stream must be throwing their marketing budgets away.

Finally, a tangent is a tangent, regardless of your opinion of economics as a science.

Actually, as I understood it, this is a thread about manipulation of demand. In that context, the trouble with the “generally accepted definition” is that it doesn’t actually measure demand (i.e., desires, preferences, wishes) but purchases – because the latter can be quantified and the former can’t. That is, it doesn’t reflect what people want, only how and to what degree those wants are expressed through how money is spent.

So I’ll accept that if you “remove all marketing of all products” that by standard measure “overall demand” will decrease. But all that really tells us is that you can’t purchase a product or a service you don’t know exists. At the same time, unless we’re to assume that such overall demand will not merely decrease, it will vanish, there will still be economic activity; there will still be demand.

So if I understand you correctly, the “clear” answer is that demand can exist independently of marketing but can be influenced by it. I don’t see how that is disagreeing with my description of “supersizing” as manipulating demand.

Finally, the reference to consideration of social and psychological factors in producing and shaping demand as “spin[ning] off on tangents” may be part of the reason why economics is called “the dismal science” and is one of the few professions where making persistently wrong projections is no bar to be hired to do it again.