Market and demand analysis is concerned with two broad issues:
1) What is the likely aggregate demand for the product/service?
2) What share of the market will the proposed project enjoy?
Market and demand analysis is a critical process in project management, as it provides important insights into the potential demand for a product or service in a particular market. The purpose of market and demand analysis is to understand the current and future market conditions, identify potential customers, and estimate the potential demand for a product or service.
Market analysis typically involves examining the overall market size, competition, market trends, and potential customers. This includes gathering and analyzing data on the current and future state of the market, such as demographics, economic conditions, industry trends, and other factors that may influence demand for the product or service.
Demand analysis is focused specifically on the potential customers for the product or service, and seeks to understand their needs, preferences, and willingness to pay. This involves gathering data on the target customer demographic, such as age, income, education, and other factors that may influence their buying behavior. It also involves gathering data on customer preferences, such as product features, design, and pricing.
The analysis of market and demand information is important for several reasons. First, it helps project managers to determine the potential market size and demand for a product or service, which can inform decisions about product development, pricing, and marketing strategies. Second, it helps project managers to identify potential barriers to entry, such as competition or regulatory constraints, which can inform decisions about the feasibility of the project. Finally, it helps project managers to understand the key drivers of demand for the product or service, which can inform decisions about future product development and marketing strategies.
Overall, market and demand analysis is an important step in the project management process, as it provides critical insights into the potential success of a project and informs decisions about project development and execution.
The goal of any market study is to find the point where supply and demand intersect to supply the right quantity of a good at the right price. Since the world is complex and dynamic, no one can ever identify that exact point. A market analyst accumulates information on as many factors as possible to make an educated guess.
Market analysis has six basic components:
1) Situational analysis and specification of objectives,
2) Collection of secondary information,
3) Conduct of market survey,
4) Characterization of the market,
5) Demand forecasting,
6) Market planning.
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Project Planning and Management Study notes for M. plan Sem-II
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