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September 22, 2020
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In the world of economics, market demand is a term used to describe the demand for particular goods as well as who the buyers are who are interested in purchasing the product.
The number of consumers who are interested in the product affects the price of the product or service. The more people want to buy the product, the higher the price will be, and similarly, the fewer people there are to buy, the lower the price is.
The demand for swimming costumes and summer clothes, for example, goes up for the summer, since more people are interested in buying a new swimsuit or a pair of shorts.
It depends on the market, which individual factors are influencing the demand, but broadly speaking there are a couple of main factors affecting market demand:
When all the goods produced for the market are sold to buyers, a market equilibrium has been achieved. That means that the market supply has been met by the market’s demand.
Individual demand refers to an individual consumer or company’s demand for certain goods. When enough people or businesses are needing or demanding the same goods and services, market demand is created.
While market demand usually refers to a particular market (clothing or electronics), aggregate demand is a term used to refer to the demand in all markets. Aggregate demand over a longer time period is used as the basis for the gross domestic product (GDP).
The GDP represents the overall amount of produced goods and services in an economy, aggregate demand, in turn, visualizes the demand for those produced goods and services. This is why both the GDP and aggregate demand grow and decrease together.
There are many tools available for eCommerce business owners to study their business demand:
Keeping an eye on the keywords people are using in search engines can be a great way to find out, whether there is demand in the market you’re interested in selling.
There are both free and paid tools online that let you track the search volumes of keywords, look at similar and related keywords, and analyze your competitors.
Start with surveying your friends and family, or make use of social media and find out what people are interested in buying at the moment.
Understanding what consumer demand is available for your business idea can help you further develop your target audience and build user personas.
Social listening tools track certain keywords across different social media platforms and media outlets, and include filters and targeting options to make the listening process most relevant to your market research.
Similarly to SEO, social listening will help you be on the pulse of what’s happening in your market and what the current consumer desire is at any given moment.