Great! You have a new product to market. The question is how much demand is there for your product or service. Competition should always be a consideration. Knowing supply and demand gives you an idea of how much of your product or service you can sell in your area, and how much you can charge for that product or service and still make a profit. Demographics are also important. A good analysis of the area you plan on marketing to is very important to get an idea of who your customers may be and who usually buys your type of product or service. Let’s get started on knowing your market.
Run an analysis of the area you plan on marketing to to get the demographics. Know how many people actually live in the area, then know how many of those people may be interested in your product or service. A good analysis of a region will tell you how much competition is in your region and how much your competition charges for a similar product or service.
How much competition is there nationally? If you plan on selling your product or service nationally, then a national analysis will be necessary to understand how your product or service will perform on a national level. The internet is the perfect way to begin selling your product nationally. Creating an online storefront or a web page where your product or service is showcased is not very expensive, and you will create a national presence in any event. Many small companies continue to sell in their local region while expanding online nationally.
Check competitors where you are selling your product and see what the potential price of your product in your region could be. As you brand your product or service, brand recognition gives you the upper hand. You can then begin to charge more for your product or service.
How unique is your product and what is the potential demand? Uniqueness of a product or service can be a two edged sword in that the more exclusive or unique a product is, the more limited your demand could be for that product or service. On the other side of that coin, the more original a product is, the more demand there may be for that product or service. It depends on how similar other products and services are to your unique product, and is it something everyone will want?
What does the economy look like and what demand is there for your product in a good or bad economy? This is important because when an economy descends, then people tend to buy only what is necessary and your business can suffer greatly. If you sell a product or service that is necessary no matter what the conditions of the economy are, then you have little to worry about during an economic downturn. Many companies adjust accordingly during a downturn by making special offers or offering coupons to drive in customers who might not normally spend during an economic downturn. Just be prepared to evaluate and adjust to keep your business moving forward in any situation.
What other factors might impact the demand for your product? Natural disasters or pandemics can affect your business. In the event of a natural disaster or a pandemic, look at what types of relief are offered in order to keep your business going until you can officially reopen. Covid is a perfect example of a pandemic which shut down almost all small businesses. Be prepared for such events with a company nest egg.
Knowing your market will help your business understand what the supply and demand is for the area you are running your business. Understanding competition and what your product or service potential is in your region will allow your company to make good decisions on marketing and advertising that will be beneficial to getting more customers and selling more of your product or service.