Types of market demand: What are the influencing factors in practice?

To understand what market demand is, let's go back to a well-known concept: The Law of supply and demand. This is a basic principle of economics: the price of a good is determined by the interaction between quantity supplied and quantity demanded. When demand is high and supply is low, the price tends to rise. At the same time, when supply is high and demand is low, the price tends to fall. But what does that mean in practice? 

Firstly, the “market demand” is the total amount of a product or service that a given public is willing to purchase. Second, there are several types of market demand. But for now let's think of it as an abstraction representing the desire Or the need of the public for a product. In this way, it is simple to associate: the more difficult it is to find someone who, in fact, sells the product, the more that public will perceive it as valuable and the more they will accept paying for it. 

Likewise, the reverse occurs. When a product is widely available, even if demand remains high, the price tends to fall. In practice, mapping market demand helps companies find the right “balance point”. That is, when the quantity supplied of a product or service equals the quantity demanded. In this instance, the company is not losing money, as production costs are covered by revenue generated from sales.

Although they may seem basic or even speculative, these concepts are the basis of the marketing intelligence and measuring them is crucial in any business. However, arriving at reliable data depends on an intricate number of factors that, by the way, are in constant motion. 

latent demand


A product that has a latent demand is a product that meets a real need of a certain public, but that does not yet exist in the market. That is, it is the potential demand that has not yet been identified or satisfied. 

It refers to needs or desires of consumers that have not yet been met, but that can be explored by companies that see in them a opportunity. Latent demand can come from a variety of factors, such as new market trends, technological advances, demographic changes, or other external causes. Through market intelligence, companies can identify latent demands and develop strategies to serve them. This may include launching new products or services, adapting existing offerings, or creation of new markets.

negative demand


Negative demand is related to a factor that resists the desire for the product. It can arise from a bad impression caused by the product among consumers, or when the company that popularized it is involved in some scandal, linking a bad connotation to the product in question. Also, negative demand can arise from the scientific demonstration that that product causes harm to health or the environment, as is the case with cigarettes. As a result, companies face difficulties in disposing of products that have negative demand, as they need to develop containment strategies that reverse these perceptions. 

non-existent demand


Nonexistent market demand is the absence of demand for a product, that is, consumers are not interested or even unaware of its benefits. This can happen when a new product or service is launched on the market and does not attract the attention of consumers. Or even when an existing product or service loses its popularity as a result of other more attractive ones on the market. 

Products with non-existent demand are not doomed to failure, as there are still other alternatives for these cases that we will discuss later. 

Declining demand 


Declining demand is the situation where the quantity demanded of a product or service decreases over time. This can happen when a product becomes obsolete, new competitors enter the market, or when consumer preferences change. Declining demand can be caused by a lack of innovation, effective marketing, or a lack of adaptation to market needs. 

However, it is important to emphasize that the decline in demand is part of the life cycle of a product. It is normal for a company to face this situation at some point. It is management's responsibility to anticipate this type of scenario and contain its consequences. 

irregular demand


Erratic market demand refers to variation in the amount of a product or service that is sought after by consumers over different time periods. This can be caused by seasonal factors, fashion trends, changes in the economy, among others. This can make it more challenging for business owners to predict and meet customer needs, as demand can change quickly and without notice.

full demand


This type of demand occurs when the supply is consistent with the amount of people willing to buy. That is, when the company is satisfied with the number of sales. Under these conditions, the price of the good or service tends to stabilize at a level where supply and demand are equal. 

Obviously, this is the ideal scenario that any business would like to experience. However, we cannot forget that changes in consumer behavior and market needs are constantly evolving. Furthermore, products have a life cycle with ups and downs. 

excessive demand


Excess market demand occurs when there is greater demand for a good or service than the available supply. This can lead to a rise in prices and a shortage of supplies. This scenario can originate from several factors, such as an increase in consumer income, changes in preferences, or a decrease in the supply of substitute goods. Excessive demand can also be caused by barriers that prevent new competitors from entering the market and make it difficult to increase supply. 

information in motion


As you may have noticed, there is more than one type of market demand and the same product can have several of them. At the same time, when conducting a study to mapping the demands of a given audience it is crucial that the data is reliable and up to date. Mainly because the concept of demand has to do with the desire and need of the public, conceptions relative to a certain extent. Small external changes can have big immediate impacts, completely changing the course of the investigation. 

Also, we must take into account that the results of the demand mapping are not closed. This means that we can interfere with the needs and, above all, the desires of the target audience. If a company were to create a new product capable of arousing desire or making life easier for its customers, demand, even if non-existent, could be stimulated through effective marketing campaigns.

In the same way, a product that has a negative demand can have its condition reversed through communication strategies that have this objective. However, contingency or demand creation measures cannot be adopted without first knowing how the market is behaving now. It is for this reason that providing accurate information about the public in question plays such an important role within the decision making.

demand mapping 


Mapa digital com uma mão apontando um ponto específico.


When business management identifies territories who already own public with characteristics similar to the persona and market space to serve it (considering competition, logistics and everything that may impact the business model), we can say that a market demand mapping process. 

However, for this type of processing to be effective, it is necessary to classify the types of demands that coexist in a place, crossing reliable and up-to-date data from diverse sources. In this way, expanding companies, such as deductibles or same businesses entering the market, can make more accurate decisions with regard to investments and commercial points. 

Given the complexity of the study, most organizations prefer hire specialists that collect and interpret the most relevant information, which significantly reduces the margin of error and prevents unintelligent decisions that could generate future losses. 

Ways to increase market demand


If, after proper mapping, it is concluded that there is no significant demand for a particular product or service, it is still possible increase or same create the demand (as long as there is money and time to wait for the results). Some actions with this objective include: 

  • Marketing and advertising: Communication strategies can draw attention, arouse interest, generate desire and engage a certain audience, creating the necessary demand for products and services. 
  • Competitive prices: Companies can set competitive prices to attract buyers on a cost-effective basis. For this, it is also necessary a market study and the application of market intelligence. 
  • Offer additional benefits: guarantees or after-sales services, upsell, upgrade, are all strategies that aim to make the product more attractive to buyers. 
  • Create a community: The human sense of belonging can be used to your advantage to tie a product or service to common values and collective experiences. 
  • Innovation: Staying relevant to consumers is a matter of survival for any company. For this, it is necessary to constantly study the market, map demands and supply them with innovative ideas for products and services. 
  • Strategic partnerships and alliances: Gaining access to new markets, increasing authority, visibility and consumer confidence may imply that companies make formal and strategic alliances with other organizations.  

How to measure market demand?


Gráfico digital


  • Market research: Organized collection and interpretation of qualified information about consumers' needs, preferences and purchasing behavior.
  • Sales analysis: Analysis of records to determine the quantity of products or services being sold and compare them with prior periods or with data from competitors and peers in the market.
  • Price tracking: Monitoring competitors' prices to understand how demand affects them and identify opportunities to raise or lower prices.
  • Online data analysis: Use of data analysis tools, such as Google Analytics, to collect information about website traffic, origins and visitor interactions. 
  • Trend analysis: Monitoring market trends and analyzing how they affect demand or not, and what opportunities exist in that context. 
  • Customer feedback: Active listening to customer feedback through surveys, comments and ratings to understand their needs and wants and use these as a basis for improvement. 
  • Recruitment of professionals: Hiring mapping and geomarketing companies, such as Linkages, which offers personalized services to ensure that organizations have qualified and up-to-date data on specific markets, increasing their chances of growth and reducing the response time for adverse events that impact demand of the market and, of course, in the sales of the organization. 

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