What Is a Market Demand Analysis?

Market demand analysis refers to estimating the size of the market and the potential demand for products.

Market demand analysis

Market demand analysis refers to estimating the size of the market and the potential demand for products.
Chinese name
Market demand analysis
Foreign name
market demand analysis
Definition
Market size and potential demand for products
Method
Predictive analysis
other factors
Demographic changes, consumer preferences
The steps of this predictive analysis are as follows:
First, identify the target market
In the total market population, determine the total number of target markets in a segment. This total number is the maximum number of potential customers and can be used to calculate future or potential demand.
Second, determine the target market for the geographic area
Calculate the percentage of the target market in the total population, and then multiply this percentage by the total population of the geographic area to determine the number of target markets in the region.
Third, consider consumption restrictions
Consider whether the product has certain restrictions sufficient to reduce the number of target markets.
Fourth, calculate the average number of purchases per customer per year
From the purchase rate / purchase habits, you can calculate the average purchase per person per year.
Fifth, calculate the total number of similar products purchased each year
Multiply the number of customers in the area by the average number of purchases per person per year to calculate the total purchases.
Sixth, calculate the average price of the product
Calculate the average price of a product. Use a certain pricing method to calculate the average price of the product.
Seventh, calculate the total amount of purchase
Multiply the total purchase amount obtained in the fifth item by the average price obtained in the sixth item to calculate the total purchase amount.
Eighth, calculate the purchase amount of the enterprise
Multiply the market share of the company by the total purchase amount of item 7, and then make appropriate adjustments based on the changes in the market share of the company and competitors in the past 5 years to determine the company's purchase amount.
Ninth, other factors to consider
Other factors related to product demand, such as changes in economic conditions, population changes, consumer preferences, and lifestyle must be analyzed for their impact on product demand. Based on this information, objectively investigating the data obtained in item 8 can reasonably predict the company's potential purchases in terms of total sales and number of customers.

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