How to Estimate Demand for Your Project in the Omani Market

Many project owners say "the market is big and the demand is there", only to discover after opening that customers are far fewer than they imagined. Demand estimation is the cornerstone of the entire feasibility study: revenue, production capacity, investment size and headcount are all derived from it. If this number is inflated, no polished financial model or elegant design will save the project. In this article we present practical methods for estimating demand realistically in the Omani market.

Why do most people get demand estimates wrong?

Certain mistakes recur in almost every weak study:

• Confusing market size with demand for your project: a large market does not mean a meaningful share of it will come to you.
• The "small share of a big market" fallacy: assuming you will capture a modest percentage of the total population without any justification of how you will reach them.
• Ignoring competitors and substitutes: customers do not choose between you and nothing; they choose between you and existing options they already know.
• Relying on personal impressions: "everyone around me wishes this service existed" is not data.
• Assuming full demand from day one instead of a gradual growth curve that reflects the time needed to build a reputation.

Understand the market layers first

Before the numbers, distinguish between three layers:

A project in the Wilayat of Sohar, for example, does not serve the entire population of the Sultanate; a fine-dining restaurant does not target every household; and a small factory cannot meet all demand even if it exists. Each layer narrows the number, and this narrowing is the essence of a realistic estimate.

Three methods for estimating demand

Do not rely on a single approach. Each method has strengths and weaknesses, and its real value emerges when its results are compared with the others.

Method one: top-down

You start with the total figure and narrow it through a series of logical filters:

1. The number of residents, households or establishments in the target area.
2. The percentage who need or use the product.
3. The average purchase or consumption rate.
4. The percentage who fall within your price segment.
5. The share you can reach given the competition.

Its advantage is speed and a useful overall framework; its drawback is that every percentage is an assumption, and compounding assumptions can magnify the error. That is why the source of every filter must be documented, whether it comes from the bulletins of the National Centre for Statistics and Information, sector data, or a field survey.

Method two: bottom-up

You start from your project's actual capacity to sell:

• How many customers could pass by your location each day, and how many of them convert into buyers?
• How many contracts can the sales team close with companies each month?
• What is the project's actual capacity during peak and off-peak hours?
• How many customers does a comparable competitor serve in a similar location?

This method is closer to operational reality and exposes the limits of capacity and sales channels. The strongest studies combine both methods: if the two figures converge, confidence rises; if they diverge, that signals an assumption that needs review.

Method three: benchmarking against comparable projects

Studying competitors is not just about knowing their names; it is a rich source of demand data:

• Field visits at different times to gauge customer traffic approximately.
• Tracking prices and offers and how they change through the season.
• Reviewing public ratings to learn what pleases and what frustrates customers.
• Interviews with suppliers who know the volumes they supply to the sector.

Pay attention to indirect substitutes as well. A restaurant competes not only with other restaurants but with delivery services and home cooking, and a training centre's competitor may be online courses. Ignoring these substitutes makes the market look less crowded than it really is.

Primary data: field surveys and interviews

When published data is limited, which is common in many specialised activities, collecting primary data becomes essential.

Tips for a useful field survey

• Ask about actual behaviour, not intentions: "How many times did you buy this last month?" is more accurate than "Would you buy?".
• Choose a sample that genuinely represents your target segment, not your acquaintances and friends.
• Beware the intention-behaviour gap: many who say they will buy do not, which is why stated intention rates are discounted when converted into expected demand.
• Ask about acceptable prices indirectly, for example by presenting comparative price ranges.
• In institutional (B2B) markets, in-depth interviews with a limited number of decision-makers are more valuable than a broad questionnaire.

A hypothetical example for illustration

A women's fitness centre project in a hypothetical wilayat. All of the following figures are entirely hypothetical:

Top-down: we assume 20,000 women in the target age group within a 15-minute radius of the site, of whom 15% exercise at paid centres, i.e. 3,000. We assume 40% of them fall within the proposed price segment, giving a target market of 1,200 members. With three competitors, a 20% share in year two looks ambitious but achievable, i.e. about 240 members.

Bottom-up: the centre's comfortable capacity is about 300 members. Based on the launch campaign and the team's ability to sell, we estimate 120 members by the end of year one and 220 in year two.

The two figures converge in year two (240 and 220), so we adopt the more conservative figure of 220. At a hypothetical monthly membership fee of OMR 25, expected monthly revenue in year two is about OMR 5,500, the figure on which the rest of the financial study will be built. Note that choosing the lower figure was not pessimism but methodological discipline: the gap between the two estimates is left as a margin for surprises and tested later in the sensitivity analysis, rather than having the investment built on it from the outset.

From demand to revenue: do not forget time

A demand estimate is not a single number but a path over the years that should reflect:

• The learning and adoption curve: a new project rarely reaches its target capacity in its first year.
• Seasonality: in Oman, the summer and holiday seasons, the month of Ramadan and the tourist seasons affect demand patterns in many sectors, with effects that vary by activity and location.
• Competitor reactions: competitors may cut their prices when you enter.
• Structural changes: such as new urban developments or shifts in consumption patterns.

Once the demand path is built, you need to test how a decline would affect the project's feasibility, which we explain in our article on sensitivity and scenario analysis. You can also see where market research fits within the full set of stages in our guide to economic feasibility studies in the Sultanate of Oman.

Checklist before adopting a demand figure

• Did you use at least two methods and compare them?
• Does every assumption have a documented source or a clear justification?
• Did you analyse competitors and indirect substitutes?
• Does the expected demand stay within the project's capacity?
• Does demand ramp up over the years rather than jump straight to the peak?
• Have you taken seasonality into account?
• Would the figure seem reasonable to someone who has worked in the sector for years?
• Have you determined what would happen if only half of the expected demand materialised in year one?

Conclusion

Demand estimation is not optimistic guesswork but a methodical construction that combines published and field data, compares more than one method, and narrows the total market down to what you can actually achieve given competition and your capacity. The figure you adopt here will determine everything that follows, so it is better for it to be conservative and well documented than impressive and fragile. If you want a field market study that estimates demand for your project using a transparent methodology, we are ready to help: request your study.