Negative demand

From CEOpedia | Management online

Negative demand - a market state when the main part of consumers dislikes the product and can even pay the price to sidestep it[1]. In state of negative demand public can show its dissatisfaction by not wanting to pay for the product to obtain it, regardless of its advantages and possible profit[2]. Marketing task in this case is to analyze the reason of the product dislikes and rejection[3]. A proper strategy needs to be created to disperse misunderstanding of possible customers and transform demand from negative into positive[4]. A good marketing plan can change the beliefs and stances of the market by redesigning, making more positive promotion and lowering the prices of the product[5].

For better understanding of the topic there are some examples of negative demand represented below[6][7]:

  • Humanity has negative demand for vasectomies, vaccinations, dental work and other operations.
  • Employers sense a negative demand for ex-convicts and alcoholic workers.
  • Another instance is negative demand for low-fat products. People love the taste of food with high amount of fat and commodity related to their availability and quite easy access. We prefer not to quit the taste and convenience for a long-term and distant promise of health benefits, that is why fat-food diners have a high demand among society, which is a testament to the negative demand for low-fat and healthy nutriment.
  • On the social rank, the acception of programs, which help poor people by redistributing earnings is in negative demand. Politicians maken everything possible to avoid programs like these, that will considerably redirect income from rich to poor. They prefer to pay the price of more drug use, increased crime and unremunerated medical care rates than to risk their opportunities for reelection by raising taxes on wealthy and influential part of society.

Examples of Negative demand

  1. Tobacco products: Smoking tobacco products has been steadily declining amongst young people, particularly in the United States, since the 1990s. This has led to a sustained decrease in the demand for these products and a corresponding decrease in sales.
  2. Sugary drinks: The demand for sugary drinks has also been decreasing due to increasing awareness of the health risks associated with consuming them. Many countries have implemented taxes on sugary drinks as a way to discourage their consumption, leading to a decrease in demand for them.
  3. Fur products: The demand for fur products has been decreasing in many countries due to increased awareness of animal cruelty and environmental concerns associated with the industry. This has led to a decrease in demand for these products and a corresponding decrease in sales.

Advantages of Negative demand

Negative demand can be a beneficial force for a company, as it can alert the company to potential issues with their product or service. The advantages of negative demand include:

  • Increased awareness of customer needs: If a company is aware of negative demand, they can respond quickly by improving the product or service to better meet the customer's needs.
  • Cost savings: If a company is aware of negative demand, they can often make changes to their product or service at a lower cost than if the negative demand had gone unnoticed.
  • Improved customer satisfaction: Negative demand can often provide valuable feedback that can be used to improve customer satisfaction. This can help a company gain a competitive advantage and build customer loyalty.

Limitations of Negative demand

Negative demand can have several limitations that can make it difficult to manage a product in this market state. These limitations include:

  • Low consumer interest: Consumers may not be interested in the product at all and may actively avoid it. This can limit the success of marketing efforts, as consumers may be reluctant to engage with the product.
  • Low revenue: With low consumer interest, revenue will also be low. This can be a problem for companies that rely on the sale of products to generate revenue.
  • Difficulty in identifying the target audience: It can be difficult to identify the target audience for a product with negative demand. This can be especially challenging for companies that have limited resources for market research and development.
  • Difficulty in adjusting pricing and marketing strategies: Negative demand can make it difficult to adjust pricing and marketing strategies to attract customers. Without an understanding of the target audience, it can be difficult to develop effective strategies.

Other approaches related to Negative demand

In addition to negative demand, there are a few other approaches to understand how a product is received by consumers. These include:

  • Segmentation, which is the process of dividing a market into distinct and unique groups of customers with similar characteristics. This technique is used to better understand the needs and wants of each segment and to target them more effectively.
  • Positioning, which is the process of developing a product that is either competitively superior or differentiated from the competition. This can be done through creating a unique product or service, offering a superior customer experience, or targeting a specific customer segment.
  • Branding, which is the process of creating an image or identity for a product or service through the use of marketing and advertising. This helps to create a positive perception of the product or service, which can lead to increased sales.

Overall, these approaches can be used to understand how potential customers view a product or service, and can help to create strategies that will make the product more attractive to them.

Footnotes

  1. ↑ C.L. Tyagi 2004, p. 76
  2. ↑ M. Siegel, L. Doner 2004, p. 33
  3. ↑ C.L. Tyagi 2004, p. 76
  4. ↑ K.R.M. Rao 2011, p. 200
  5. ↑ C.L. Tyagi 2004, p. 76
  6. ↑ C.L. Tyagi 2004, p. 76
  7. ↑ M. Siegel, L. Doner 2004, p. 33


Negative demand — recommended articles
Unsought good — Importance of market segmentation — Marketing myopia — Segmentation and targeting — Customer needs — Competitive product — Customer loyalty — B2B social media marketing — Threat of substitutes

References

Author: Uladzislau Leonau

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