Advice 1: How to determine the demand for the product

Before starting mass production of a product or service, you need to study consumer demand. There are several methods to determine the relevance of the product before launching it in the consumer market.
How to determine the demand for the product
Instruction
1
Guide the initial testing of the product. To do this, hand out prototypes of your dealers, potential customers, or take part in the specialized exhibition. Summarize the data, analyze the pros and cons, it will be useful in the further development of the product before commencing production.
2
If your product is for mass consumption, conduct customer satisfaction surveys. Use questionnaires that distribute to places of possible realization of this kind of goods. Compose the questions so that the responses can be to know whatever the buyer wanted to see this product, what features the product should have, and how much it should cost. The more consumer needs relative to this product you discover, the more opportunities you will have to produce quality and highly consumed product.
3
Analyze market and consumer demand. For that explore similar products of competitors, and then compare data about the demand for their product. It will give you new ideas for improving their product and will help you learn about the General trends in the development of this market. Besides, you will avoid repetitions of already existing and embodied ideas.
4
Define the target market. It should be maximally specialized, i.e., when analyzing the possible demand for your product you should focus on a specific audience. For example, the study of the demand for their goods from the category of spare parts for cars it is pointless to spend in grocery stores, etc. in order to understand the situation "inside", put yourself in the buyer's shoes and look at your product through his eyes. What is the attraction that is brand new and is optimal if the ratio of price and quality.

Advice 2: How to make a questionnaire

Survey sheets and questionnaires can be used for various needs of the enterprise. First, they are included in the plan of marketing research intended to evaluate the opinion of consumers. Secondly, the questionnaire may contain questions that will help the company to articulate the needs and requirements of the customer. In this case, the questionnaire sheets are more like a technical specification.
How to make a questionnaire
Instruction
1
Ask clear questions. The questionnaire should only consist of specific questions designed for this category of persons. Consider the social status of the respondents and their education. The only way you will get a specific answer. The question should not be ambiguous. Each question must relate to one subject.
2
Ask questions that will trigger true answer. It refers to a category of questions on sensitive topics related to personal life and preferences, when people are trying to avoid answering. Mostly in such questions give an answer from personal experience, and according to social norms.
3
Avoid questions that imply or suggest the answer. For example, start the question with "do you Agree", "do you Own", "do you Know how". Some people, wanting to quickly finish the survey, I agree with you, not thinking about the meaning of the question.
4
Specify multiple answers. This will simplify the task as easier for people to choose the proposed option than to write the answer.
5
Combine the compiled questions and answers into a single questionnaire. At the beginning of the questionnaire, place simple questions that will not irritate respondents. The first questions are most important. If the Respondent could not easily reply to them or they cause negative emotions, it can refuse to fill the remainder of the survey. You must first ask General questions, then more specific. This is because if the first Respondent will answer a specific question, then later to the General question on a similar topic will be given a less accurate answer. At the end of the questionnaire you can post questions-detectors. They are rephrasing the questions asked and determine the veracity of the responses received.
Useful advice
Sometimes people are suspicious of filling various questionnaires and surveys, so try gently to get interested in the answers during the conversation, trying to remember the information or quietly outlining the conversation.

Advice 3: How to determine the demand for a product

Entrepreneur engaged in the trade, wants his goods were in demand and sold out quickly. But not always, especially if we are talking about some new product, unfamiliar to a wide range of potential buyers. The product can interest people, and maybe for a long time to stay, bringing a loss instead of profit. Therefore preliminary it is necessary to determine whether he will be in demand.
How to determine the demand for a product
Instruction
1
Conduct market analysis, review the balance of supply and demand for similar products in your area. Determine the average market price, the average speed of the turnover of goods, the approximate rate of return. Based on the study data, it is possible with sufficient confidence to determine whether the point of selling this product or not.
2
Try to identify the target audience, i.e., make a conclusion as to what type of buyers will purchase your product. It depends on many factors, primarily age and financial well-being potential customers, and on the location of your store. For example, if you sell food products, but your store is located in a residential area, where most of the population – people of modest means, it is hardly necessary to offer them delicacies from the category of higher price category. But in the center where live more than wealthy people, where there are many offices established firms, such goods may find demand.
3
Possible survey of potential consumers. Print questionnaires and distribute them among your customers, and also other stores located in your area. May distribute these worksheets among employees of enterprises, institutions with the request to fill and leave at the entrance. Try to keep the list of questions was short (not to bore and not to irritate a potential customer), yet exhaustive. The results of the study answers, you can make more or less objective picture of consumer demand and to make a conclusion: whether to engage in the sale of this group of products, or the probability that they will not find demand.
4
If you have a network of dealer distributors, you can give them small quantities of goods for sale, and see how trade goes. The goods will be sold out quickly – it makes sense to do it on a larger scale. Well, if it stale – hardly worth making a bet on it.

Advice 4: How to determine the elasticity of demand example

Demand is the utility level of a product to consumers. To see how he would react to a price change or the average income level, it is necessary to determine the elasticity of demand. This index is calculated as a ratio and expressed in percentage.
How to determine the elasticity of demand example
Instruction
1
The elasticity of demand makes sense to find each time you change one of the following factors: price of product, income level of consumers. Based on the obtained value the economist can determine, positively or negatively it will affect the enterprise of profit. In accordance with this manual if necessary, adopt a decision on the introduction of corrective measures.
2
To determine the elasticity of demand, you need to have accurate information on prices and volumes of products for the beginning and end of the reporting period:

Kets = (∆q/q)/(δp/p), where KEC – the coefficient of elasticity at the price, q – quantity, p – price per unit of goods.
3
The same principle is calculated the coefficient of elasticity by income:

CED = (∆q/q)/(∆i/i), where I is average consumer income (from the English. income).
4
On the elasticity of demand is largely influenced by the prevalence and easy availability of materials for the manufacture of certain products. Inelastic goods are necessities (food, medicine, clothes, electricity). Also, these include minor budget items, such as pens, pencils, toothbrushes, matches, etc., as well as products that are difficult to replace bread, gasoline, etc.
5
The highest elasticity of demand have goods, which production requires rare, and therefore very expensive materials. Such products include jewelry products, the coefficient of elasticity which is much greater than unity.
6
Example: to determine the elasticity of demand for potatoes, if you know that the average income of consumers per year has increased from 22000 to 26000 rubles, and sales of this product increased from 110000 to 125000 kg.

Solution.
In this example, we calculate the coefficient of elasticity of demand under the income. Use the ready-made formula:

CAD = ((125000 - 110000)/125000)/((26000 - 22000)/26000) = 0,78.
Conclusion: the value of 0.78 is in the range from 0 to 1, therefore, is a product of the first necessity, the demand is inelastic.
7
Another example: find the elasticity of demand for fur coats with the same rate of personal income. Sales of coats increased in comparison with last year from 1000 to 1200 products.

Solution.
CAD = ((1200 - 1000)/1200)/((26000 - 22000)/26000) = 1,08.
Conclusion: QED > 1, this is a luxury item, demand is elastic.
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