Using Technology To Determine Market Demand
An essential part of running a business is carrying out market research. Determining market demand is the process of finding out if there is a demand for a product, and who wants to purchase it. As demand for a product increases, naturally, so does its price, and when demand goes down, the price will follow in order to encourage people to purchase.
Some people opt to follow their gut instincts when figuring out market demand, but there are technologies out there that can help put together a strong, evidenced forecast to help evaluate whether a business venture is feasible or not, we’ll talk about these later.
If you’re in the process of starting a business, or you’re planning to in the near future, we strongly recommend that you carry out a product demand analysis. After all, you don’t want to begin selling a product only to find out there is no market out there to sell it to!
What are the benefits of calculating market demand
On top of figuring out whether a product will sell or not, there are lots of other insightful reasons for calculating product demand that will help you make better-informed business decisions. For example, knowing how high the demand for a product is informs pricing strategies and being aware of the type of people who will be interested in your product helps craft marketing initiatives.
What determines market demand?
There are several factors you need to be aware of when calculating market demand:
- Number of people actively searching for a product like yours
- How many people are willing to pay for a product like yours
- How available your product is for purchase, considering your own company and your competitors selling the same/ similar products
What technology can help determine market demand?
Now that we’ve covered the basics, let’s get on to the good stuff. You are probably wondering what technology is out there that can help you perform your market demand analysis. There’s two great pieces of technology you’ll need to make use of:
– Search engine optimisation (SEO) tools
There are countless free SEO tools out there that you can use to gather insights about your product or service. These tools will tell you search volume, so you know how many times on average people are searching for the product each month, and keyword suggestions, which tells you how often people are searching for related terms. Seo tools can be a great source of inspiration as they will help you determine how frequently users are searching for your product and related terms. You can even filter your searches by location and time period which will give you specific brand insights that can inform your focus and decisions moving forward.
– Social media
Social media platforms can give you a wealth of data that you can use to inform all kinds of decisions you make related to products, marketing strategies and your overall brand identity. By simply searching specific keywords you can see all related posts informing you who’s talking about them, the general sentiment behind, where people are talking about them and what they’re saying.
What other methods can I use to determine market demand?
There are other, more traditional, methods for calculating market demand. For example, you could carry out surveys or questionnaires either on social media or via email. Aim to reach as many people as possible with this method because the greater the scope you create, the more accurate and informative your market research will be.
Another promising method is planning and executing experiments which, although these can be expensive and time-consuming, offer very informative results. An example of this might be offering a new product at a discounted price for a limited time which will encourage a large number of purchases. From this, you can determine who’s interested in your product and gather feedback from those who have bought it.
Thinking up a new business idea can be really exciting, but knowing your idea will work is even better. We hope you’ve found this article useful, and if you have any questions we’d love to hear from you! You can contact us here.