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Tracking demand isn’t as simple as just tracking consumer demand. In our global economy, in order to track trends in the future marketplace, it takes a lot more than just looking at a particular market niche and consumer demand for the products and services there.

This is especially true on the Internet where customers come from all over; demand can be very tricky to predict. However, the four components of demand usually stem from four different areas of the marketplace: Consumer, business, government, and foreign demand.

Once you understand that, you can try to keep an eye on the bigger forces that can affect your market niche in order to predict future demand for your area.

Consumer Demand

This is the one area businesses can track quite well, just by looking at their own sales, the state of the local or national economy, and how well their competitors are doing. Right now, consumer demand may be down because the United States, the powerhouse of consumer demand, has lost millions of jobs since the start of the recession.

The unemployment level has increased to almost 7% and might end up being in the double digits by mid-year if nothing changes.

The loss of jobs impacts consumer demand as people lose their homes, cars, and other possessions that need to be maintained or replaced at regular intervals.

They simply don’t have the money to do so. But, that doesn’t mean that there is no consumer demand; it just means that demand in the market can shift and may be more influenced by other components for a while.

Business Demand

Businesses create demand because they have to get suppliers for their goods and services.

They employ people who go out and buy things. They sell to each other too in business-to-business transactions. Keeping an eye on which businesses are failing and how that leaves more potential for smaller businesses that want to service the leftover demand is a good way to start getting a bigger picture of demand for your market niche.

Government Demand

In recessionary times, government intervenes to try to put some social safety nets in place. With that action, like a stimulus package, they create demand for goods and services, but they end up footing the bill, which eventually gets passed on to the taxpayer.

Foreign Demand

This is basically the exports to a country minus the imports. If a country like China ends up with a huge middle class, they may be clamoring for goods and services that they do not manufacture in their country, creating a demand in the U.S.

So, depending on how countries relate to each other and the value of the currency exchange between them, demand can rise and fall as things change across national boundaries.

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