There are three key factors that generate demand for services: desire, affordability, and willingness to purchase. A service provider must manage demand to achieve its objectives. There are different demand situations like negative demand where people refuse an offer, no demand due to lack of awareness, latent demand for better services, and seasonal demand. Demand patterns can include irregular, falling, optimum, exceeding capacity, below optimum, and excess demand. Strategies to manage demand include shifting demand to match capacity, increasing demand through promotion and expansion, flexing capacity up or down, and implementing waiting line strategies.

2. Introduction
 There are three characteristics in a society that are
needed to generate demand for a service. These are
desire, affordability and willingness to purchase. Every
product, including services will have a minimum
demand, but the minimum demand may not be
adequate enough to the marketer to achieve
organizational objectives. One of the primary
responsibilities of a marketing organization is to
manage demand to a desirable level.

3. Demand situations
 Negative demand: the market response to an offer of a
service firm can be negative. People are aware of
features of the service and the benefits offered, but
the evaluation of offer might lead them to take a
decision that is not is favor of a service offer.
 Passenger refusing a bus conductors call to board the
bus

4.  No demand: this demand situation exists either due to
unawareness, insufficient information about the
service due to consumers indifference. Marketer
should focus on promotional campaign and
communicating the right reason for preferring services
offered by the firm.
 Bus with no passenger in it.

5.  Latent demand: in any given environment it is
impossible to have a set of products that are capable of
offering total satisfaction to all the needs and wants of
a society. There exists the gap between desirable and
available. Latent gap is nothing but the gap between
desirability and availability. Latent demand is a
business opportunity and services firm should orient
themselves to identify such opportunities and exploit
them at the right time.
 Passenger travelling in an ordinary bus but dreaming
of luxury bus.

6.  Seasonal demand: some services will find demand only
during a particular season in year. Seasonal demand
creates many problems to service organisations. These
include idling the capacity, fixed cost and excess
expenditure on promotion.

7. Demand patterns
 Irregular demand
 Falling demand
 Demand to the level of optimum capacity
 Demand exceeding capacity
 Demand below the optimum capacity
 Excess demand

8. Strategies for demand
management
 Strategies for shifting demand to match service
capacity
(I) Communicating busy day and timings
(II) Providing incentives during non peak hours
(III) Identifying regular customers and serving them first
(IV) Scheduling service segmentwise

9.  Strategies to increase the demand
(I) Aggressive promotion
(II) Entry into new segments
(III) Offering price incentives
(IV) Change in service timings
(V) Providing service convenience to the customer
(VI) Promote word of mouth communication

10. Flexing capacity to meet low
demand
 Performance maintenance and renovations
 Schedule vacations
 Schedule employee training
 Lay off employees

11. Flexing capacity to meet high
demand
 Stretch time, labor, facilities and equipment
 Cross train employees
 Hire part time employees
 Overtime from employees
 Rent or share facilities
 Rent or share equipment
 Sub contract

12. Waiting line strategies
 Employing operational logic
 Establishing a reservation process
 Differentiate waiting customer
 Making waiting fun