The main question for any business is whether potential customers will buy? It arises both at the stage of searching for an idea and before changes in the business model. To find the answers, you need to analyze demand. Here’s what tools will give you accurate figures and where else you can look for information on demand in your industry.
Demand for Goods: What Kind of Demand There Is and What It Depends on
In economics, when analyzing demand, two types of factors are considered — price and non-price characteristics. The second group is broad.
Let’s consider some such factors:
- Personal consumer preferences. Buyers have habits, brands they trust, and their favorite stores.
- Availability of similar offers and available substitute products.
- Modern realities. For example, changes in laws and living standards in the country.
Demand in the market depends on objective factors as well: sometimes it cannot be increased. Therefore, a distinction is made between elastic and inelastic demand. In the first case, if you run advertising or reduce the price, buyers are likely to become more. In the second, nothing will change significantly. For example, everyone needs summer shoes, many are ready to buy an extra pair specially for a new dress. And the demand for strollers for twins isn’t so elastic: rare families need them only once in a lifetime. Therefore, even if you offer a huge discount, the demand will grow little, only due to the few buyers who managed to pull away from competitors.
In analyzing the demand, consider different criteria. One of the main criteria for the entrepreneur is periodicity:
- Episodic — arising occasionally and on a specific occasion. For example, a new TV series has come out and everyone is interested in the related merchandise.
- Seasonal — tied to the time of year. For example, at the beginning of winter people buy warm clothes, by summer — sandals and swimsuits.
- Everyday — regular, not related to the time of year.
When Analyze Demand for Goods
Demand is a dynamic thing: today a product is in demand, and tomorrow there is a crisis or a strong competitor appears and sales drop. Therefore, you need to analyze the situation regularly.
But there are times when it’s vital:
- Before launching a business. It’s impossible to plan a strategy if you don’t know how many people are interested in a similar product or service.
- Changes in the business. For example, you decided to expand your product range or open a branch in a neighboring city. You need to find out how users will meet such updates: whether there are potential customers in the new location.
- A sharp increase or decrease in sales. You need to understand what such changes are associated with. Perhaps the demand for products has fallen throughout the industry? Or is it a matter of seasonality? Or is there still demand overall, but people are leaving for a new, stronger competitor? Using the tools we’ll talk about below, you’ll be able to understand the reasons for these changes and respond appropriately.
A Test Advertising Campaign and a Slogan for Analyzing Demand
A test advertising campaign will help you check whether you are the one who will be in demand. Allocate a small budget and evaluate the situation in practice.
You will learn:
- What kind of traffic you can get.
- How many users who came to the advertisement are really ready to buy.
- How much it costs to attract one potential client.
If you do not have a website, you can create a lending site on a constructor to launch such a campaign. This is easier and cheaper than developing a full-fledged site.
The advertising campaign is launched instantly. You will quickly check demand, find out how customers react to the product, and can easily correct the strategy.
