How AI Product Managers Should Approach Demand Analysis Differently

What Is Demand?

Demand is simply A’s need for B. When A is a user, it is a user demand; when A is the market, it is a market demand; when A is a product, it is a product demand; and when A is a company, it is a commercial demand.

Product managers mainly focus on user demand and product demand, while marketers and operations staff tend to care more about market and commercial demands.

Three Characteristics of Demand

1. Demand Is Bounded – Traditional marketing defines demand as the willingness and ability to purchase a specific product at a certain price within a period, which implies a boundary. Unlimited wants are desires, not demands.

2. Demand Changes With Scenarios – Demand originates from scenarios. Different times, spaces, contexts, and interactions lead to different user demands.

3. Demand Has Multiple Levels – From explicit user statements to deeper underlying needs, demands can be layered and mapped to Maslow’s hierarchy.

What Is Demand Analysis?

Demand analysis is the process of researching user demand, applying relevant techniques, and converting the findings into product requirements.

Scenario‑Based Demand Analysis Method

Analyzing demand within real scenarios offers three benefits:

Complete coverage – immersing in the scenario helps uncover all needs.

Higher accuracy – distinguishing true needs from proposed solutions avoids pseudo‑demands.

Priority judgment – frequency and core importance can be assessed.

What Is a Scenario?

In internet products, a scenario is defined as the process by which a user achieves a goal using a product. It consists of “scene” (time & space) and “context” (situation & interaction). Scenarios are divided into user‑demand scenarios and user‑usage scenarios.

User‑Demand Scenario : "User" in a specific environment performs an action to satisfy a need (e.g., choosing a healthy lunch).

User‑Usage Scenario : "User" uses a product to complete a task (e.g., ordering food, paying, using utensils).

Four Steps of Scenario‑Based Demand Analysis

Map the core process.

Traverse scenarios.

Identify user demands.

Refine product requirements.

1. Map the Core Process

Identify all roles (each role forms a swim lane), draw the core flow connecting role activities, and consider branches and exceptions.

Example – a small‑loan product:

Borrower – the person needing funds.

Approver – evaluates repayment ability and issues a decision.

Lender – disburses funds after approval.

Collector – intervenes when the borrower defaults.

Core flow diagram (image) shows the normal loan process; additional diagrams illustrate exception and branch flows such as ineligible borrowers, credit rejections, incorrect bank cards, and repeated collection cycles.

2. Traverse Scenarios

Divide the business into major phases (e.g., pre‑loan, loan, post‑loan) and enumerate scenarios for each phase, considering time, location, and user/device state factors.

Examples of influencing factors:

Time – food‑delivery apps push breakfast, lunch, or night‑snack content based on the hour.

Location – travel apps recommend destinations relevant to the current city.

Status – an iPhone handles incoming calls differently when in “Do Not Disturb” mode.

3. Identify User Demands

After scenario traversal, add a “Demand” column to the scenario table. Consider environmental factors (time, place, culture, market) and user/device states when articulating each demand.

4. Refine Product Requirements

Translate user‑language needs into technical product requirements (functional and non‑functional). Product managers must be fluent in both natural and technical vocabularies.

Common techniques include UML diagrams and use‑case modeling.

Conclusion

Demand can be summarized as A’s need for B; different A‑B pairs produce user, product, market, or commercial demands. Product managers should always clarify which type they are addressing and avoid mistaking a user’s proposed solution for a true requirement.

Scenario‑based demand analysis yields more complete and accurate insights. The four‑step workflow—map process, traverse scenarios, find user demands, and refine product requirements—helps product managers ask critical questions about problem definition, measurement, resources, complexity, risk, innovation, and genuine user voice.