Market Demand is how much consumers want a product for a period of time.  Simply put, when more people want a specific product or type of product, this is an increase in demand.  For example, department stores may see an increase in demand for items such as Christmas ornaments, Christmas trees, decorations, baking goods, etc., during the months of October – December.  Another example was the increase in demand for cleaning products during the Covid-19 pandemic.  Note that market demand fluctuates over time.

The market demand curve is simply a visualization of demand based on pricing.  It looks like the letter L with the y-axis in the north-south position and the x-axis in the east-west position.  The y-axis represents price points, and the x-axis represents the number of times a product is purchased.  The demand curve shows how much of a product will sell at a certain price point.  Typically, the demand curve slopes downward because the higher the product price, the consumer will buy less of the product.  On the flip side, the supply curve slopes upwards because the lower the product price, the consumer will buy more of the product.

There are several ways to test for demand for a product or service.  One way is to test a small market, preferably in your area.  Make a list of a few shops or stores, and visit and coordinate with those stores to sell your product wholesale in their establishments for some time.  This method is effective because it gives the business owner a solid indicator of whether the product is selling and a glimpse into the appropriate price point.  It’s good to exercise this technique locally and then branch out.

Another way to test for demand is using eCommerce channels such as “eBay.”  Testing the sale of goods online is another effective indicator. 

A third way to determine demand is through online applications such as Keyword Surfer by Google.  It is a free Google Chrome add-on from Surfer SEO.  This add-on will provide information directly from search engine result pages, aka SERPs. This is a free add-on, and there is no login required.   This app also offers insight into trends, competition, and the distribution of interest. It can lead you to where you should focus your marketing efforts, or whether or not to move forward.

No matter which method is used, completing this exercise will answer the question, is there a demand for my goods?  It will provide indicators for appropriately pricing the goods and solidifying the targeted audience.  It will also answer the question, do I have enough goods to meet the demand? 

Source: Shopify | What is Market Demand and How to Calculate it | By:  Mark MacDonald | Date: 03/15/2020,your%20company%20and%20your%20competitors