Understanding the market demand before launching your products is the key to success. Explicit knowledge of the market trend or demand provides you with helpful decision-making insights.
Analysing the market demand helps the company decide if it can profitably enter and expand its operations. So, precisely what is market demand analysis?
Market demand analysis measures the customers’ demand for a product or service in the target market. Business decide a lot of factors based on the market demand of a product, such as production cost, marketing, pricing, etc.
This article will discuss how to determine market demand for a product.
Market Research Process
Market research is the foremost thing to do when evaluating the total market demands for target markets and customers. The success of any company or, say, any product depends on identifying the needs of the customers. Businesses are required to do in-depth market demand analysis for the current market and the future market.
The traditional method of conducting market research or survey requires a lot of fieldwork where you need to visit different public places and request people to answer your questions or fill out a survey form. It may look overwhelming, but it is one of the best ways to know who exactly your potential customers are and evaluate their needs.
However, now you can use social media platforms as satisfactorily to do your research on market demand. You can create polls, google forms, ask questions, go live and communicate with your targeted audiences, etc.
You can perform various experiments with the market to know where your product stands. Some of the experiments which you can perform are,
You can offer prototypes of your products for free to social media influencers and ask for their genuine reviews. After they post their reviews, you can evaluate the market demand based on how many followers ordered the product.
Accepting pre-orders not only helps you to evaluate your market demand but also helps you to plan on your inventory. You can stock up your inventory based on the orders you receive. So, create a hype of the product in the market before you start taking orders.
Market observation is a process in which market researchers observe people’s behaviour and how they interact under different conditions. It helps you determine when the market demand for a product is high or low, in which region the demand is high, does the demand depend upon climatic changes, etc.
For example, you want to launch a new body lotion, a personal care product. So, by market observation, you would know that the demand for the product is more during the winters and low during the summers. However, the need for the product is high throughout the year in cold places or hilly areas. Based on the observations, you can decide when and where to increase the distribution, locations to expand, and many more.
Execute Competitor Analysis
Competitor analysis is a must to identify the direct, indirect, and replacement competitors present in the market. It helps you understand their business strategies and product features, which is essential for building unique attributes in your business. Also, you get to learn from their past mistakes, which you can avoid while drafting your strategies.
Here are some of the tips to perform competitor analysis,
- Perform a SWOT analysis to know their strength, weakness, opportunities, and threats.
- Observe their social media presence and how they engage with their customers.
- Scan through the customer reviews to understand what customers want. You can also consider the suggestions made by the customers in their reviews.
- Please consider the pricing policy, offers, etc., provided by them.
Evaluate Market Trends
One of the ways to determine the market demand for your products is to find out if your product is trending currently, how many people are talking about your products on social media or are searching for your product online. You can take the help of the following tools to conduct online analysis of your products,
- Google Trends
- Google Adwords
- Google Analytics
- Google Keyword Planner
The tools make it easy to track the market presence of your product. For example, if you are selling mobile phones, you can use the above tools to know about the search volume for mobile phones, which mobile phone brand people are searching about, and what they are searching for, such as price, offers, features, etc. You can also find out precisely which region and the online platform it is trending in, which you use while creating marketing strategies.
To sum it up, analysing demand is an essential criterion before setting your foot into a target market. Finding and evaluating the market demand will help you get a better idea regarding what your customers demand, and by knowing so, you can grow your business.