|
|
 |
|
Viewing report
|
|
|
|
The 2009-2014 Outlook for Healthy Whole Grain and High-Fiber Food Products in Europe
ICON Group International, July 2009, Pages: 56
WHAT IS LATENT DEMAND AND THE P.I.E.?
The concept of latent demand is rather subtle. The term latent typically refers to something that is dormant, not observable or not yet realized. Demand is the notion of an economic quantity that a target population or market requires under different assumptions of price, quality, and distribution, among other factors. Latent demand, therefore, is commonly defined by economists as the industry earnings of a market when that market becomes accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry earnings (P.I.E.) or total revenues (not profit) if a market is served in an efficient manner. It is typically expressed as the total revenues potentially extracted by firms. The “market” is defined at a given level in the value chain. There can be latent demand at the retail level, at the wholesale level, the manufacturing level, and the raw materials level (the P.I.E. of higher levels of the value chain being always smaller than the P.I.E. of levels at lower levels of the same value chain, assuming all levels maintain minimum profitability).
The latent demand for healthy whole grain and high-fiber food products is not actual or historic sales. Nor is latent demand future sales. In fact, latent demand can be lower or higher than actual sales if a market is inefficient (i.e. not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a country market.
For reasons discussed later, this report does not consider the notion of “unit quantities”, only total latent revenues (i.e. a calculation of price times quantity is never made, though one is implied). The units used in this report are U.S. dollars not adjusted for inflation (i.e. the figures incorporate inflationary trends) and not adjusted for future dynamics in exchange rates. If inflation rates or exchange rates vary in a substantial way compared to recent experience, actually sales can also exceed latent demand (when expressed in U.S. dollars, not adjusted for inflation). On the other hand, latent demand can be typically higher than actual sales as there are often distribution inefficiencies that reduce actual sales below the level of latent demand.
As mentioned in the introduction, this study is strategic in nature, taking an aggregate and long-run view, irrespective of the players or products involved. If fact, all the current products or services on the market can cease to exist in their present form (i.e. at a brand-, R&D specification, or corporate-image level) and all the players can be replaced by other firms (i.e. via exits, entries, mergers, bankruptcies, etc.), and there will still be latent demand for healthy whole grain and high-fiber food products in Europe at the aggregate level. Product and service offering details, and the actual identity of the players involved, while important for certain issues, are relatively unimportant for estimates of latent demand.
Customers who bought this item also bought
The 2009-2014 Outlook for Healthy Whole Grain and High-Fiber Food Products in Africa
The 2009-2014 Outlook for Healthy Whole Grain and High-Fiber Food Products in North America & the Caribbean
The 2009-2014 World Outlook for Metal Step, Platform, and Rung-Type Ladders, Metal Ladder-Type Step Stools, and Ladder Accessories
The 2009-2014 World Outlook for Snowboarding Boots for Step-In Bindings
The 2009-2014 Outlook for Metal Step, Platform, and Rung-Type Ladders, Metal Ladder-Type Step Stools, and Ladder Accessories in Japan
The 2009 Report on Metal Step, Platform, and Rung-Type Ladders, Metal Ladder-Type Step Stools, and Ladder Accessories: World Market Segmentation by City
The 2009 Report on Snowboarding Boots for Step-In Bindings: World Market Segmentation by City
The 2009-2014 Outlook for Snowboarding Boots for Step-In Bindings in Greater China
The 2009-2014 Outlook for Snowboarding Boots for Step-In Bindings in Japan
The 2009-2014 Outlook for Snowboarding Boots for Step-In Bindings in India
The 2009-2014 World Outlook for Fiber Cans, Tubes, and Similar Fiber Products
Whole Grain and High Fiber Foods - Global Strategic Business Report
|
|
|
|
