Latent demand is the term used in the context of marketing, it refers to that demand which is there in the subconscious mind of the consumer but he or she is not able to think about it until someone else shows or tells him about his need for a product. In simple words just like a small baby keep crying when he or she is sleepy but he will not sleep until you put him to sleep rather he will keep crying in the same way a consumer will keep getting frustrated until he or she does not know about the right product or use of current product rightly. In order to have a better understanding about this term, one should look at some of the latent demand examples –
Latent Demand Example
Latent Demand of Term Insurance
In the case of term insurance, many people do not take this insurance policy because they think that nothing bad will happen to them but when someone else points it out and explain to them that in case something happens to them then their family can be in big financial trouble and that is where term insurance plan can be of great help. Once a consumer understands this need then he or she will not hesitate in buying a term insurance plan because everyone wants financial independence and safety for their family members.
Early Investment Habit
Another example of latent demand is the need for investing early when you are young because the majority of people tend to invest after 5 or 10 years of their job or business rather than investing right away and that is where if someone can show the benefits of compounding due to long term investment whether that investment is in mutual funds, stocks, real estate or even bank fixed deposits, the trick is to invest early. Hence investment by young people is also a latent demand which can be satisfied by marketing personnel with various investment alternatives available in financial markets.
Top End Model of Cars
In the case of cars majority of people prefer to buy a basic model of a car rather than a top-end model because the top-end model are expensive but if someone can make them understand that top-end model has all the features which make the car driving a luxurious and safe experience than they may opt for the top-end model instead of the basic model. Hence for example if in the basic model of a car there are only 2 front airbags and in the top-end model, there are 4 airbags then this thing can be told to the customer that the top-end model can ensure the safety of all the 4 passengers and not just 2 passengers sitting in front.
Tour Packages
In the case of holiday planning, the consumer pays more attention to the place of visit and season of visit but does not think much about hotels and food-related aspects which is a sort of latent demand because if you are traveling to a good place but your hotel and hotels food is not good than your whole journey can be a nightmare and that is where travel agents or tour companies come into the picture as although they are more expensive but they can book good hotels for travelers due to their experience and knowledge and make the tour more memorable. This latent demand will need to be put into the traveler’s mind rather than he or she himself asking for it as for the majority of people holidays means going out rather than eating great food or staying at the best hotels.
Latent Demand of Electronics Items
In the case of electronic items like smartphones, televisions, laptops, fitness bands, headphones, and so on there is latent demand potential that can be tapped by the marketer. Hence take the case of smartphones where in the past people were satisfied with just having a mobile but now one can sell expensive smartphones due to features like a great camera, good battery life, fast processor and so on. Another case in point is television where previously people were satisfied with television only but now once they are shown android televisions then they realize its use and benefits.
Pets
Pets are another example where latent demand is present because many people do not think of owning pet animals and once they are told about the emotional benefits of having pets then they realize they need pets in their homes and they will readily buy pets for their home.
As one can see from the above examples of latent demand that it is present at many levels and industries and that is the reason why every marketer should keep his or her eyes and mind open so that he or she can take the benefit of fulfilling the latent demands of consumers so that company gets more demand which in turn will result in an increase in the profits for the company.