Why is demand analysis important?
Posted: Mon Jan 06, 2025 8:19 am
Demand analysis serves as a thermometer to determine the feasibility of launching your product in a given period and market, based on the interest and needs of your target audience. By knowing this information, you can optimize the production or launch of the product to adapt it to the market in which it will compete.
A man on a laptop doing a demand analysis for business.
How to do a demand analysis?
The goal of demand analysis is to answer two phone data questions: how many people want my product? And of those, how many can afford it? To find out this, you need to follow these steps:
Define your target audience.
Identify the total monetary supply and demand.
Finding the product niche.
1) Define your target audience
There is no one way to do a demand analysis . The type of analysis you do will depend on the type of market, its size, and the target audience.
To do this, it can be very useful to conduct satisfaction surveys and interviews that help you find out the opinion of your current customers. This way, you will know the level of acceptance of your products, as well as other products in the same segment of your interest.
Knowing the target audience allows us, among other things, to set a price for a product. For example, if we are going to target a segment that we consider to have a high purchasing power, we can be more free when thinking about the value of the product we want to launch.
A woman and a man conducting a demand analysis for a target audience.
2) Identify the total monetary supply and demand
It is essential to carry out a demand analysis that is as accurate as possible. Therefore, we must take into account elements that have to do with the current state of the country or region in which we want to launch the product or service. Therefore, we use two monetary indices: supply and demand .
The money supply is the total amount of money that exists in a country's economy .
Total money demand consists of the amount of wealth that businesses and individuals hold in the form of money .
These terms are closely related to each other and indicate the liquidity linked to the acquisition of products .
But what is this data useful for? Knowing the amounts of money used in a country allows you to determine its economic cycle. This cycle describes the rise and fall of production of goods and services in the economy, through the real or inflation-adjusted Gross Domestic Product (GDP).
Identifying the economic cycle in which your country's market and economy are located will help you define the actions you can take in your business. It is also useful for knowing if it is a good time to launch a new product or service on the market, for example.
A man on a laptop doing a demand analysis for business.
How to do a demand analysis?
The goal of demand analysis is to answer two phone data questions: how many people want my product? And of those, how many can afford it? To find out this, you need to follow these steps:
Define your target audience.
Identify the total monetary supply and demand.
Finding the product niche.
1) Define your target audience
There is no one way to do a demand analysis . The type of analysis you do will depend on the type of market, its size, and the target audience.
To do this, it can be very useful to conduct satisfaction surveys and interviews that help you find out the opinion of your current customers. This way, you will know the level of acceptance of your products, as well as other products in the same segment of your interest.
Knowing the target audience allows us, among other things, to set a price for a product. For example, if we are going to target a segment that we consider to have a high purchasing power, we can be more free when thinking about the value of the product we want to launch.
A woman and a man conducting a demand analysis for a target audience.
2) Identify the total monetary supply and demand
It is essential to carry out a demand analysis that is as accurate as possible. Therefore, we must take into account elements that have to do with the current state of the country or region in which we want to launch the product or service. Therefore, we use two monetary indices: supply and demand .
The money supply is the total amount of money that exists in a country's economy .
Total money demand consists of the amount of wealth that businesses and individuals hold in the form of money .
These terms are closely related to each other and indicate the liquidity linked to the acquisition of products .
But what is this data useful for? Knowing the amounts of money used in a country allows you to determine its economic cycle. This cycle describes the rise and fall of production of goods and services in the economy, through the real or inflation-adjusted Gross Domestic Product (GDP).
Identifying the economic cycle in which your country's market and economy are located will help you define the actions you can take in your business. It is also useful for knowing if it is a good time to launch a new product or service on the market, for example.