Why is it vital to understand the needs, demands and constraints of the target market?

It is foolish to enter into an unknown market; it is more foolish to operate in an unknown market. Needs, demands and constraints of the market are, among others, the demographics of such market and the ones that define it in a business sense. Your endeavor in such market is doomed to fail if you don't acquaint yourself properly with those features that explain how market dynamics work. 

This is the prime requirement for Planning and Scheduling production/Inventory and for the expansion plans.  Without which your profitability or even existence will be under question.

Can you sell headsets to deaf? or paintings to blind?

If you enter a market that you don't know. how can you sell them products that the may not need it, or can't use it or anot allowed to use it.