Definition: is a marketing method, which is used when a company’s capacity for production is overstrained. A smoothing demand implies decreasing the customers’ demand for the company’s product by various marketing activities, for instance, by withdrawing the promotional materials (advertisements) from the market. This is a temporary step, which is supposed to remain in action until the company’s production capacity is returned to its normal state. However, a smoothing demand may also include the process of stimulating the demand, when the business’s production capacity is in an underutilized state. Therefore, smoothing demand may refer to both: decreasing the demand during the very active, peak business seasons and driving up the demand when the period is slow and inactive.
In a Sentence:
When it comes to smoothing demand, trying to increase the production capacity is more expensive than actually managing the demand.
One of the steps of smoothing demand that we can take is scheduling the customers’ arrival and using a system of advanced reservations.
During a slower period, we can offer the discounts as a part of the smoothing demand.
Synonyms and related words: marketing management, marketing method, derived demand, demand risk, smoothing, demand inflation, demand density