What Does the Consumer Demand Gap Mean for You?

Updated: May 24

By Philippe Guinaudeau, CEO



Consumer’s interest to purchase a product always depends on the willingness to buy and the actual need for such a product at the time (and the money to pay for it, of course). The Entertainment license on the product will aid in directing the purchase toward that product rather than any other similar product.


However, proximity to the Entertainment brand is critical when purchasing a product with a license on it. And it's very easy to envision that the sales effort here isn't as intense with an Entertainment brand that customers have previously connected with.


That’s were the Consumer Demand Gap comes handy.


The Consumer Demand Gap is a true predictive indicator of the direction of the brands in terms of future sales. It is derived by subtracting the percentage of respondents who own or purchased branded products from those who would consider doing so in the future.




In any scenario, the difference between present brand owners and buy intenders leads to positive or negative real sales in 8 to 12 months form the measurement:


  • A large positive gap ('Demand Surplus') suggests that future demand for the brand is higher than existing ownership. This may be the case for new and rising businesses, as well as well-known names with limited inventory. ==> As a result of a positive Consumer Demand Gap, relative market share of the brands for the considered products predicts a gain in the following year.


  • A large negative gap (‘Demand Shortfall’) indicates that future demand is lower than existing ownership for the brand. ==> As a result of a negative Consumer Demand Gap, relative market share of the brands for the considered products predicts a loss in the following year. This may be the case for a variety of reasons, for example:


  • The brand is too young for the tested age group - respondents have historically purchased the brand but are now growing too old for it.

  • The brand is declining in merchandise appeal; or

  • Consumers are already saturated with products for that brand.


Rolling back:


To get a strong purchase intention level and a positive Consumer Demand Gap, one must increase the brand's popularity (Brand Popularity Index), which can come from both brand awareness and likability.


Case Study: Consumer Demand gap in Germany for the boys 10 to 14


The results of the Consumer Demand Gap in Germany among Boys 10 to 14 in January'22 are shown below. It displays the CDG results for the Top 30 brands.


This graph depicts how, as children get older, their interests shift away from toys and games and toward other categories (in Germany, movies, television series, and video games).



How to Interpret the Findings

Only 1/3 (33%) of the Top 30 brands in terms of Purchase Intent have a positive consumer demand gap.

Positive CDG is more common (40 percent) among the Top 10, thanks to video games.

Six out of ten brands, on the other hand, have a high PI but a low consumer demand gap.


What does this mean for existing brands?

Because of a lower degree of ownership – rather than a high Purchase Intent – most of the Top brands in terms of Consumer Demand Gap achieve a decent grade. This indicates that they are getting more and more customers.

While video games have a positive CDG overall, toys and games have a negative CDG. Boys aged 10 to 14 are then shifting their focus from toys to video games.


What does this say about Video Games

In Germany, video games are an important category for boys aged 10 to 14.

Video games account for three of the 11 brands (27 percent) with a positive CDG (+1 with equal PI and ownership = 0 at CDG).

Those brands are also in the top ten PI (while the rest of the brands have CDG scores of 16 or higher).

Furthermore, they achieve high levels of ownership, validating their appeal.


This is how we may conclude, based on the Consumer Demand Gap scores, that video games are successful in retaining their appeal among a target group that is shifting its interests. The category is ingrained in their life and continues to be significant.

After that, video game brands should consider how to capitalize on their strong performance in order to accelerate their growth.

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