Table of Contents
Definition of Latent Demand
The term latent demand is used to refer to that situation in which a consumer is unable to satisfy his needs because he does not know that he needs a product. There is a lack of knowledge and hence there is no demand for the product.
Understanding the concept of Latent Demand
Latent demand is racially used to call that particular conduit in which the consumer is unable to satisfy his desire for particular products either due to lack of information or due to lack of awareness. Sometimes money too can be one of thus factors which may lead to the latent demand.
There are many people in the world today who know they want something but have no idea whether it exists or not. And even if it exists, then maybe that person is unable to understand the benefits that come with the products which he can actually use to fulfill his or her needs.
Thus there is a demand that the consumer is sometimes well aware of but they are unable to realize it due to lack of information or money. These demands that originate out of knees are something that can’t be fulfilled with the products that the consumer already has and hence is in a need of a new kind of a product which can be used to fulfill these demands of him.
Lateens demand also refers to the situation in which the consumer is not at all aware of the availability of the product despite the fact that they need it. Here the companies try to take advantage of this opportunity.
The main objective of the marketing industry here becomes to influence people who they see as potential buyers to purchase the products that they are making which in turn will fulfill their demands and needs. This way the markets are able to create a purchasing power via a higher arrangement of purchase or through a deferred billing.
In this way, the marketing insides are able to influence the purchasers who they see as being prospective to allocate their income which is clearly disposable in a different manner.
Now the fact that latent demand can be used in the marketing industry by the businesses entities is not new. Time and again companies have been using this to help improve the sales of their products and also in launching new kind of products in the market.
When the customer doesn’t exactly know what products they want to full cretin requirement, the companies see it as a great opportunity to bring those podcast in the market, to help the customers realize that these newly launched products will fulfill their demands and then strategically sell all of their goods and services.
An example of Latent Demand
Latent demand is basically a type of demand that the consumer realizes it later onwards. Sometimes the companies use it to strategically escalate their sale growth and revenue. One of the best examples of latent demand can be smartphones.
Earlier there used to be simple phones with not many features. But with the advancement in technology, phones started upgrading with new features every year. Now with these new features adding up to the phones, people started knowing the benefits of these additional features.
Now here even if these people weren’t aware that something like this could happen and never really thought that it could in real life, are actually getting itched every single day when these Smartphone companies launch their products with growing additional features.
Now with every new feature that is being launched, people tend to realize that this is also something that they wanted. And then they become eager to buy it. Thus smartphones are the perfect example of understanding the concept of the latent heat.
With the help of sort phones, companies generate such products which people were in need of but could never really able to realize that need until the companies themselves told these customers about.
One another example of latent demand can be seen in the automobile industry. When the automobile industry was new, there weren’t as many features in those cars as there are today.
Even people thought of it as a regular driving machine. But now with so many technologies being developed and astonishing new ideas coming up, these automobile features have been making people realize all of their needs and demands.
What is the importance of Latent Demand?
Latent demand is a term that refers to the condition of the consumers who’s not aware of those types of products that can actually fulfill their needs. Not although latent demand refers to a state of condition, this can actually be used by the business industry to help in growing their sales revenue.
The latent demand is important for the companies in such always that when the customers are unaware of any products but somehow they know very well that they will need it, the companies then use this condition for their benefit.
They will do in-depth research for a particular segment of the demographics, then analyses their demands and their needs. Once they evaluate all of these factors they will launch products that will fit exactly to the needs of the consumers.
In this way, the latent gap becomes important because it helps in bringing up the gap which is between the existing market and the market that is needed to be created so that it can fulfill the demands of the customers.
How is the latent demand used by companies?
Latent demand represents the consumers’ desire for a particular type of products which they are clearly unable to satisfy because they themselves are unaware of it or are unable to point it out. In these cases, they only get aware of those products when someone helps them in punting out that product.
Also in cases in which even if they are aware of such a product that will fulfill their desires, they are just not able to buy that product due to either lack of money or lack of information. Now, this is where the marketing industry comes into play.
First of all, they do well-versed research on a particular segment of demographics. This segment can be divided on the basis of many different aspects like age, gender, income, job, etc. Then they will start researching that particular chosen segment of the population.
There they will try to find out what is lacking in their lives, what are they look for, what their needs are, what they have been demanding for, what are they aware of and what are they not aware of.
Once the companies evaluate their chosen section of the demographics on the basis of the above-mentioned questions and other similar ones, they try to bring out products which will help these people satisfy their needs. Here either they will launch new products or will bring their already launched products into their realization.
In this way when people come to know about these products, they will tend to buy them. Here the companies use a strategic approach to advertise their products so that the customers understand the use of it and the manner in which it satisfies their needs or demands. In this, once the customers get aware of the product and its benefits they will willingly buy it.
Here one more thing that the companies should keep in mind is that even if they make the consumers aware of the products and its benefits, the customers will still not be in the condition to buy it if the price of the products is too expensive.
So the companies should also take care of the fact that the product that they are selling is affordable to the customers they have been targeting.
What are the Advantages of Latent Demand?
The advantage of the latent demand is that this helps the companies in understanding the death of the market. If they research on their targeted segment of the demographics, they can understand the need of those people and then bring out products that will easily sell out because that’s what people have been demanding.
What are the disadvantages of Latent Demand?
The disadvantage of latent demand is that sometimes due to wrong analyzing technique, the companions fail to understand what people really need. And then mistakenly they launch those products why are not really needed by the people. In this newly launched product are not sold and in this way, the company has to suffer for the losses.
Latent demand refers to a particular Coniston in which the consumer is unaware of the product they need. So if this is used in the right manner, companies can actually make a lot of profits out of it.
Liked this post? Check out the complete series on Marketing