---
name: demand-analysis
description: Use when asked to run or explain a demand analysis — estimating and understanding customer demand for a product or service (market size, price sensitivity, demand drivers) — as the market-feasibility input to a broader feasibility-analysis or business case.
---

# Demand Analysis

Demand analysis studies and estimates customer demand for a product or
service — how many people want it, how much they'd pay, and what
drives that demand to rise or fall — providing the market-side evidence
a business case or [[feasibility-analysis]] needs.

## Key questions demand analysis answers

- **Market size** — how large is the total addressable demand, and what
  portion is realistically reachable?
- **Price sensitivity** — how does demand change as price changes
  (elasticity), and what price point balances volume against margin?
- **Demand drivers** — what factors (seasonality, economic conditions,
  complementary products, substitutes, demographic trends) push demand
  up or down?
- **Segment variation** — does demand differ meaningfully across
  customer segments, geographies, or use cases?

## Common methods

- **Primary research** — surveys, interviews, and direct customer
  feedback (see [[voice-of-the-customer]]) to gather firsthand demand
  signals.
- **Secondary research** — industry reports, published market sizing,
  and competitor data as a starting estimate.
- **Historical/analogous data** — demand patterns for comparable
  existing products, adjusted for relevant differences.
- **Pilot testing** — small-scale, real-world tests (a limited launch,
  a landing page measuring signups) that generate actual behavioral
  data rather than stated intentions alone.

## Why stated intent isn't enough

Demand analysis works best when it goes beyond simply asking people
whether they'd buy something — stated purchase intent is a notoriously
unreliable predictor of actual behavior. Where possible, favor methods
that observe real behavior (pilot tests, pre-orders, actual
willingness to pay) over surveys asking hypothetical questions alone.

## Common pitfalls

- **Relying solely on stated intent surveys** — "would you buy this?"
  responses systematically overstate actual future purchasing behavior.
- **Ignoring price sensitivity** — estimating demand at one assumed
  price point without testing how demand shifts at different price
  points can produce a misleading market-size estimate.
- **Treating the total addressable market as the realistic near-term
  opportunity** — the theoretical maximum market size is rarely what's
  actually reachable in a given timeframe with realistic resources.

## Learn more

- [[voice-of-the-customer]] for gathering firsthand customer input.
- [[feasibility-analysis]] for the broader assessment demand analysis feeds into.
- [[market-expansion]] for a growth strategy demand analysis often informs.