Demand analysis is the process of examining consumer demand for a product or service. It involves studying various factors that influence purchasing decisions, such as price, income levels, and consumer preferences. By understanding these elements, businesses can forecast future demand and make informed decisions about production and marketing strategies. This analysis often utilizes tools like surveys and market research to gather data. It helps companies identify trends and shifts in consumer behavior, allowing them to adapt their offerings accordingly. Ultimately, effective demand analysis supports better resource allocation and enhances overall business performance.