Negative Demand - Definition & Meaning
What is Negative Demand?
Demand forms a very essential part of sales and marketing. In order to introduce a new product, house minimal inventory and to produce the right amount of goods the company needs to understand the demand of the product or service as close to the real scenario as possible.
There are basically 8 different types of demands: Negative Demand, Unwholesome Demand, No Demand, Latent Demand, Declining Demand, Irregular Demand, Full Demand and Overfull Demand.
We will be focusing only on negative demand in this piece. Negative demand is generally seem when a product is disliked and the common opinion is against it. The benefits of the product generally far outweigh the cons, but the customer does not want it.
Negative demand also encompasses a case wherein the market response to a good or service is negative. It might be because people are unaware of the features and benefits of the good or service. Under these circumstances it is necessary to understand the psyche of the potential buyers and find the primary cause for rejection of the good or service in order to introduce counter measures. Eg. People fear travelling by air despite the probability of dying by drowning while swimming is much higher than probability of an air crash.
Some more examples: Dental work is one such field wherein people don’t want problems regarding their teeth and gum and hence use preventive measures to avoid it. Herein despite not willing to pay for taking care of the teeth and gum the customer has to pay in order to maintain his teeth and gums to avoid dental troubles.
Similarly, people pay for an annual full body check up to determine the risks or threat of a heart attack despite high probability of the result of the check up being negative. Insurance also follows something similar. Nobody wants to get into an accident but are willing to pay a price in order to be protected against the possibility of an accident.
Hence, this concludes the definition of Negative Demand along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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