January 16, 2017

Types of Demand

Demand forecasting is an essential activity in sales and marketing. The demand forecasting has to be done so that the company does not store huge inventories and at the same time, does not under utilise its operation setup. By taking into considerations the various types of demand in the market, the firm can thereby have a proper forecast and can plan its inventories accordingly, meeting the objectives of the firm.

There are mainly 8 types of demands in Marketing which have to be taken into consideration by the marketing manager during demand forecasting. The various types of demands, and how to tackle the challenges for marketers in these various demands, is discussed below.

Types of demand

Negative Demand – Negative demand is a type of demand which is created if the product is disliked in general. The product might be beneficial but the customer does not want it. For example – Dental work where people don’t want problems with their teeth and use preventive measures to avoid the same. Insurance, which people should have but they delay buying an insurance policy. Similarly, people would like to avoid heart attacks and hence may pay for a full body check up where the results might be negative, but still the customer has to pay. The marketer has to solve the issue of no demand by analyzing why the market dislikes the product and then counter acting with the right marketing tactics.

Unwholesome demand – Unwholesome demand is the other side of Negative demand. In negative type of demands, customer does not want the product even though product might be necessary for the customer. But in unwholesome demand, the customer should not desire the product, yet the customer wants the product badly. Best example of unwholesome demand are cigarettes, alcohol, pirated movies, guns etc.

No demands – Certain products face the challenge of no demand. The best example for the same can be education courses where there is very low demand or no demand at all. Such cases are very hard to counter.

Latent Demand – Latent demand is, as the name suggests, a demand which the customer realizes later. Thus, while buying the product, he might not desire some features. But later on, he might think about those features and buy the product. The best example of latent demand are normal phones vs smart phones. People nowadays want more and more features in the smartphone. They might settle for a normal phone, but then later on they get the itch to buy a smart phone. Similarly, people might buy a petrol car. But most likely their second car will be a diesel car. A marketing managers job is to find out the features which people might be looking for later and market them to the customer in such a manner that he immediately wants them.

Declining demand – Declining demand is when demand for a product is declining. For example, when CD players were introduced and IPOD came in the market, the demand for walkman went down. Although there was still a demand for the product, the demand was a declining demand. A marketers job in such a case to think ways to revive the product so that the demand is not declining.

Irregular demand – Irregular demand can be demand which is not consistent. The best example of irregular demand is seasonal products like umbrellas, air conditioners or resorts. These products sell irregularly and sell more during peak season whereas their demand is very low during non seasons. The best way to counter irregular demand is to introduce incentives for the customer to buy the product.

Full demand – In an ideal environment, a company should always have full demand. Full demand means that the demand is meeting the supply potential of the company. It also means that the markets are happy with the products of the company and that people want to buy from the same company. The marketing challenge in this type of demand is to maintain the same level of interest in the product and the company.

Overfull demands – Overfull demands happen when the companies manufacturing capacity is limited but the demand is more than the supply. This can be observed in the cement industry occasionally. Generally, most cement industries have limited manufacturing capacity. And hence, brand switching in cement industry is high. Many companies use de marketing techniques to counter act overfull demands. This is because if the company keeps marketing, but it is not able to supply the material, then the company might suffer badly in brand equity.

Above are the 8 types of demand which a marketing manager has to forecast and manage at all times. Each type of demand has its own challenges and the marketing manager needs to be quick on his feet to manage all the different type of demands.

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About Hitesh Bhasin

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  1. thanx a ton.. very informative..

  2. it is the same to the book?

  3. thank you..i get lots of information about marketing it helps me to make my assignments easy..

  4. any one who can tell me the types of demand with a reference. i am very thankful.

  5. Hitesh Bhasin says:

    Dear Shoaib, i have provided an example with each type of demand. Are you looking for nething specific?? Do elaborate so that i can help u out

  6. Deepika says:

    Thanx, it very easy to understand with example and it is very helpful for understand the topic of demand.

  7. DANISH AHMAD says:

    any one who can tell me the types of demand with a reference. i am very thankful.

  8. Hitesh Bhasin says:

    Dear Danish, Examples are mentioned in each type of demand. And one single company can have only one type of demand. Thus references are not possible to one single company. Hence i have given references of different products altogether

  9. I am a marketer and i think i can contributed alot to this forum,feel free to contact me on any marketing issues.God is in control.Great marketer!!!

  10. plz can i get more examples??/ it would b very helpful

  11. thank you all for making me understanding.

  12. emmanuel navarro says:

    thank for those people who put an information about different kinds of demand.. may he LORD bless us

  13. this is good but i need more information and examples about every topics.

  14. Pls can u elaborate on faltering demand giving few examples thanks

  15. Thanx, it very easy to understand with example

  16. Thanks Hitesh. I am in the midst of preparing for my final examination.. and this is a great help… 🙂

  17. Sewvandi says:

    I am reading for my degree..
    This is very helpful..
    Hope if you can put more EXAMPLES…

    Thank You so much..

  18. Md.Masud Rana says:

    tanx for your information

  19. Mukerem shikuro says:

    Oky 10Q for this statment continue by this way!!!

  20. This article is amazing but plz ad some more clear examples regarding this topc

  21. Why no specific examples of Full Demand??
    Can you please give some examples of Full Demand?

    • Full demand generally doesn’t happen however if there is monopoly market then all the people will have one choice hence all people will opt for one org.

      E.g. State electric board
      People will have constant demand for electricity and that is also from state board only hence it will create full demand environment.

  22. excellent.
    plz provide more example and strategies to improve it.

  23. Pranav Priyadarshi says:

    thank you..i get lots of information about marketing kindly write also article on indian spectacle industry & its future in India.

  24. Akanksha Singh says:

    Plz can u tell me What is a demand Curve ? what are the three types of demand? what do we mean by the terms elasticity of demand and cross elasticity of demand? In this question they ask what are the three types of demand ? but 8 types of demand so what to do ?

    • Wikipedia has a fantastic article on demand curve though i have not written it on my website. Elasticity of demand can be found on my site. Well, as per my knowledge there are 8 different types of demand. Maybe they are asking write only 3 types?

  25. But three types of demand is not present here ,is like that
    1. Price demand
    2. Income demand
    3. Cross demand
    You can tell me about that,

  26. Thanks for the article, it’s really nice. But please do we have ‘awesome’ as a type of marketing demand? If yes ,can you explain.

  27. Plz explain change in demand and change in quantity demand using a diagram

  28. can you give me imformation about Production economy?
    For example, teaching a lesson files with the issue and demand estimates as well as the benefits and costs.
    PLZ Urgent need!!!

  29. Hello,distinguish 4 levels of demand (from competitive point )

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