Why Analyze Demand?
Demand for a product is the relationship between its price and quantity, on the one hand, and the level of need, on the other. Demand is influenced by purchasing power, as well as economic and political factors.
Demand analysis is important for any business. At the start of the company, it is necessary to understand how saturated the market for goods or services in a particular niche is, who represents the core of the target audience, and what pricing policy can be chosen.
If the business has been around for several years, demand tracking allows you to catch changes in consumer sentiment, and learn about new trends and competitor tactics. Having information about the dynamics of demand, you can choose the perfect moment to expand, reduce or reorient the company, improve the level of customer service or sell the unprofitable enterprise in time.
The entrepreneur wants to connect his business with children. There are several children’s clothing stores in the city, and baby food is sold in chain supermarkets, which can keep prices low due to large volumes of purchases. The demand for a new store with such goods will be low, which means that you need to look for an adjacent niche.
Based on a survey and a survey in social networks, it turned out that parents have a need to leave their children somewhere under supervision while they go shopping. Conclusion: you can open a children’s entertainment room – rent a room in a local shopping center. The demand is obvious.
Preparing all the necessary documents for creating a new business will help to outsource experts Glavbukh assistants. Experienced accountants and lawyers will also tell you what benefit programs you can count on and how to save on taxes. All services are already included in tariffs – you do not have to pay extra.
What is the demand
Demand can be classified according to several criteria.
Depending on the time, the demand is:
- episodic – tied to a newsbreak or event: the release of a new iPhone model, paraphernalia of a new superhero film, a clothing line dedicated to the Winter Olympic Games;
- seasonal: New Year’s toys, goods for the beach; seasonal demand is also typical for the agricultural business, construction, entertainment (weddings, corporate parties).
- everyday: food, cosmetics, transport services.
In terms of dynamics , demand is divided into:
- excessive, or hype: the consumer buys more than the manufacturer has, for example, because of an over-successful advertising campaign or geopolitical events;
- impulse – based on marketing tricks or an emotional outburst: buying a chocolate bar in the checkout area of a supermarket as a pleasant reward for shopping;
- falling: the product is outdated, the season has changed, relevance has disappeared;
- negative: lack of demand is the end point of falling demand.
- irregular demand: depends on seasonality, social aspects, such as a decrease or increase in the birth rate.
How demand is formed
The level of demand is influenced by external factors and the target audience (CA).
Target audience are the most frequent consumers of goods and services in a specific business niche, those who are not only interested, but also most likely to buy.
Let’s go back to the example of the game room in the hypermarket. The target audience of this business are young families, men and women aged 20-45, who regularly shop in shopping centers. External factors can reduce or increase the dynamics of demand.
We list the most significant external factors.
- Economy. The income level of CA is the main factor that affects the change in demand. Inflation, economic sanctions, the unemployment rate, the cost of goods or services – reduces the level of income.
- Demography. The size and social status of the population affects the number of business customers. This also includes the stratification of the target audience by gender, age, and religion.
- Geography. Climatic conditions also shape demand. For example, in winter without snow, it will not be easy for a ski and snowboard rental shop.
- Politics. Economic sanctions, currency restrictions, the conclusion of trade unions – spur or slow down demand.
Ways to analyze demand
To find out the amount of demand for a product or service, you can apply several methods of analysis. Among them there are both paid and free options. Let’s give some examples.
1. Yandex.Words that is a freeway
A database from Yandex that counts the number of requests from users. You can set up a region and see how many potential customers were interested in a particular product or service in a particular region.
For the accuracy of the analysis, it is necessary to use synonyms, and various forms of words and summarize the results for the most popular options.
For example, one of the modern trends is riding a sapboard, a special board for ponds, on which you need to swim standing up, controlling the oar. The queries “buy a sapboard” and “buy a sap board” give different indicators in the same breakdown by city.
Wordstat also helps to determine the popularity of brands and manufacturers and track the dynamics of demand – for this, you need to click the “query history” button under the search bar. Wordstat will give a visual graph and the number of requests per month.
2. Google Trends is a free way
An analogue of Yandex.Wordstat in another search engine. Here you can also configure the geography of search queries and see their popularity. Google Trends immediately displays both the graph and the quantity, and there is also a statistics button for five years in quick access. You can still use the same query “buy a SUPBOARD” and understand that the interest in the topic arose only two years ago, and the demand is seasonal. This is a very useful tool if you need to know the life cycle of a product – the period of formation, strengthening and decline in demand in the market.
Also in Google Trends, you can compare different types of goods and services, and their graphs will be superimposed on each other. It is useful when you need to highlight the leaders of the assortment.
3. Yandex.Market – free way
Marketplace of the search engine of the same name with a product ranking system depending on demand.
There are cards for popular products in Yandex.Market — you can set up a regional filter and see the level of demand for each product. Another evaluation criterion is reviews. The more of them, the more in demand the position.
At the bottom of the service there are analytical blocks – “may still fit” or “they are looking with this product”. The most popular requests of similar subjects get there. Using this tool allows you to analyze information not only for one product, but also to form an assortment of similar popular offers.
To keep your business in a crisis, it is important to quickly track all changes in the market. Contact the experts outsourcing Chief Accountant Assistant: they are in touch with the Ministry of Finance, the Federal Tax Service and other departments. Certified chief accountants will tell you what state support programs your company can count on.
4. Online advertising – a paid way
To explore the demand for a new product or service, you can create, for example, a group on social networks, a blog in Yandex. Zen, or a one-page site. It’s easy to create a group and a blog yourself, a website can be made using a free constructor. You will have to pay to set up an advertising campaign for a group, blog or website.
For example, this is how the Yandex.Zen advertising campaign cabinet looks like. You can choose the audience, geography, type of content and decide on the type of advertising: short posts, long articles or videos. Next, you need to decide on the budget and strategy – the services of a herpetologist will come in handy here.
Based on the advertising campaign, you can get statistics:
- the number of interested potential buyers;
- the popularity of the product or service, broken down by age groups, geographic area;
- ROMI indicator (assessment of return on advertising costs in the future).
The cost of advertising in Yandex.Zen is from 30 thousand rubles, in social networks – from 15 thousand rubles.
Important! After the introduction of economic sanctions, the creation of an advertising campaign in Google Ads became unavailable. The service also provided access to statistics: the number of visitors to the product page, the number of purchases made. The domestic analogue is the Yandex Advertising Network (YAN).
5. Interviews, surveys, focus groups – paid way
To determine the level of demand for a product, you can conduct interviews with representatives of the target audience or experts in a specific market niche. You can understand what will affect demand: motivation, fears, barriers, accompanying trends.
The survey can be conducted online or face-to-face. A free option is to create a questionnaire in Google Forms and send it to the target audience using an e-mail newsletter. Face-to-face interviews are conducted in crowded places, such as large shopping centers.
Focus group – a simultaneous survey of several people, representatives of the target audience, who differ in gender, age, place of work, income level.
The cost of a face-to-face survey or focus group services is from 40 thousand rubles.
To accurately analyze demand in 2022, you can apply several methods at once. For example, using Yandex.Wordstat to determine the most popular product from the assortment, create a paid advertising campaign based on this product and take into account all the fears and objections of the target audience using the results of an in-person survey.