Product, Sub-Market and Market Demand
Markets demonstrate aggregate demand curves in which the number of units purchased varies inversely relative to price. These curves mathematically link to the values that buyers place upon products offered for sale. Over time, multiple sub-markets form within larger marketplaces. Sub-markets have their own demand curves, which sum to the market aggregate demand curve. The demand curve for a hypothetical new product is a measure of buyers’ demonstrated responsiveness to its specific valued attributes and product saturation in general.
This paper examines demand curves at the market, sub-market and product levels. It shows how to extract and statistically describe demand curves from available data, how product demand curves relate to sub-market demand curves, and how sub-market demand curves combine to form total market demand curves. Using a coordinate system with four positive dimensions, it derives the law of value and demand.
Doug Howarth is the lead of Lockheed Martin’s Advanced Development Projects Parametric Estimating group. Doug has held a number of supervisory positions at Lockheed Martin and has acted as the F-117A Manufacturing Program Manager. A member of Advanced Development Projects for over 27 years, Doug has been a Parametric Analyst for 13 years, specializing in buoyant and partially buoyant vehicles, as well as Unmanned Air Vehicles and various classified and unclassified platforms. His paper, “Profit as an Independent Variable: The Case of Business Aircraft,” was published in the Winter 2007 edition of The Journal of Parametrics. In addition to making numerous presentations to ISPA, Doug has presented papers to the American Institute of Aeronautics and Astronautics (AIAA), the Institute of Electrical and Electronic Engineers (IEEE) and the Society of Automotive Engineers (SAE). Doug graduated from Washington State University in 1977, with a Bachelor of Arts in Economics.