Free Essay: Difference Between Individual Demand and Market Demand

Demand is referred to as the effective want for a certain commodity. This want has to be coupled with the willingness to pay for the good or service. Understanding the dynamics that control demand will enable producers and other businessmen to reap as much profit as possible. The dynamics of demand can be studied through market research. There are different perspectives from which economists view and define demand. There is individual demand and market demand.

Individual demand and market demand overlap in more ways than one. However, generally, individual demand has a narrower scope in comparison to market demand. As the term suggests, individual demand has to do with the demand of a single person or firm. Here, the quantity of goods that a single consumer or firm will consume is considered. This is the quantity or number of goods and services that an individual or specific firm will purchase at a given price and time. The main difference between the individual demand and market demand therefore is the scope. The individual market demand is very specific and narrow.

While carrying out market research individual demand will be considered from the point of view of one person. It could also be one household consisting of the bread winner and the dependants that live under one roof. It could also be one family that does not necessarily reside under the same roof.

Market demand presents a broader perspective where the total quantity of goods and services purchased by consumers is considered. Individual needs of different groups of people as well as firms are considered under market demand. It is essential that producers and manufactures understand the market demand even as they study the market dynamics.

Based in the complex nature of the market demand, it has been divided into two thus, the primary market demand and the selective market demand. The primary demand refers to total demand for a specific brand. This type of market demand focuses on the products and services from a given brand only. On the other hand selective demand is for a given product or service. For example, while primary demand will focus on a number of phone accessories, the selective demand will focus on mobile phones alone.

Very small manufacturers or producers will focus on the individual demand. This is basically because a loss of even 10 customers will cause a significant effect to their profitability. The bigger the business grows the wider the scope grows in terms of considering demand. Therefore the focus will mostly shift from the individual to the market demand. However this does not mean that either of the two types of demand are less important to consider when carrying out research. They are both relevant when coming up with business strategies.

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