Who wants to read this? It's a question all writers should ask themselves. Identifying your audience is a crucial part of writing a book, getting it published, and marketing it.
For example, if you're writing a chapter book for elementary-age kids, you need to carefully consider your word choice and subject matter. Writing an intense psychological thriller filled with ridiculously long words and mature subject matter will probably not be appropriate for this genre. Each genre has its own peculiarities and conventions, and the best way to discover what they are for the genre you're writing in is to read as many other books in that genre as you can get your hands on. It should go without saying, but authors need to read, and read a lot, as a part of honing their craft.
Considering your audience is also crucial when you're presenting your book to publishers and agents. As I've mentioned before, publishing is a business, and when it comes down to it, a publisher needs to know that it can sell your book before it will offer you a contract. Your job as an author who wants to be published is to show the publisher that there is an audience for the book and who that audience is. For example, if you're writing a memoir about your experiences with your autistic child, who might be a prime audience for your book? My first guess would be other parents with autistic children. Provide the publisher with statistics about how many of these people there are to show what the potential audience could be.
Knowing your audience is also essential for marketing of a book, although this is more of an area that publishers are concerned with than authors. Narrowing the market for a book can help to maximize the dollars spent in advertising and eliminate advertising in markets that are unlikely to be interested in a book.
Finally, sometimes you just need to take a good step back from a project and ask, "Who wants to read this?" for a different reason. It's possible that the book you're writing has a very, very limited audience that probably isn't going to attract many readers and in turn, publishers. Many memoirs and autobiographies fall into this category. This isn't to say you shouldn't write the book if it's important to you. Writing a memoir or autobiography is a great way to preserve family history for future generations. You just need to be realistic and know that people outside your immediate circle of family and friends may not be that interested in buying and reading your book.