Demand dimensions

We located ourselves in Denia due that is in the midway of three touristic areas in the Mediterranean coast.

Our main markets are located less than 100 km away from where we are and also, the surrounding area of Denia is a very touristic zone.

To estimate the number of potential customers that we can reach in this area we took some data from “Camara de Comercio de Mallorca”, “Observatorio turístico de Islas Baleares”, “Observatorio turistico de la Comunidad Valenciana”.

This data just provided us of the number of restaurants and hotels that are located in each area as well as their category. We have taken the 4 and 5 stars hotels and the 3^rd  to 5^th category restaurants as a base of potential customers for our products. A priory seems that those businesses might have enough interest in our products to constitute a base of potential customers but this doesn’t mean that any of them will buy it. On the other hand   companies that don’t have this category can be interested in our products. It is hard to know without further investigation.

This data also explains which has been the growing trend for companies in this sector during the last 10 or 20 years. This information is valuable because it let us see that the sector still expanding. It shows how the number of businesses has increased even during this long recession in which we are in.

Something very interesting about it is that this area is severely affected not only by the Spanish economic climate but also by the economic situation of those countries that send their visitors over there. This fact comes to our doors because the demand of our product from our consumers will depend on the demand of their consumers. Since their customers come from different countries, the risk for us to lose our entire customers base is theoretically more diversified.

We also observed that the number of visitors that occupy the hotels and that go to these places varies widely from month to month. There is a high seasonality linked to all touristic products and this one doesn’t skips. So, it is natural that the total cost of each order made by our customers can differ significantly depending on the season. Even more, there are many hotels and restaurants that are opened only during the busiest months of the year. For us it will be translated in customers that appear and disappear regularly. Probably the easiest way to measure this phenomenon would be looking at the labor statistics. A good estimation could be seeing when do start and finish the “fijo-discontinuo” contracts.

All this leads to an idea of uncertainty. It is hard to make a more accurate estimation of our customer base without doing a survey or without seeing real data of a company of our characteristics. Probably the best way to operate in this case would be start working only with one area and see what the result is.