This may seem like simple advice. After all most authors, though eclectic readers, tend toward one or two comfortable genres in their writing. This can be both an advantage and disadvantage for submitting, especially if you are new to sending out your work. If you write exclusively in a category like fantasy or erotica then you may have a strong grasp of the the current offerings in your genre. It is important to know what else is out there for when you submit.
You need to be able to demonstrate a knowledge of the market that your book will be sold in as well show how you stand apart. What makes you different and gives you a fresh angle? How will you stand out on the shelf next to more established authors? Or even more difficult, how will you set your book apart in online locations like Amazon? These are questions that agents and publishers want to know. They not only want to know the answers but they expect to not even have to ask the questions. You are in sales mode and need to sell yourself as much as your work.
Ok you may be saying, I am new and fresh so they will be able to see that as long as they just read my book. My work speaks for itself. Well that may be but you still have to get them to read it to find out how different you are. Maybe you are thinking that your book cannot be defined by the rigid limits of just one genre and you are more of a hybrid. That is fine. Many authors take elements of different genres and combine them to tell a story. However those same agents and publishers are going to want to know what shelf you believe your book would occupy in a store and how you would promote it so there is still a main genre that it would be labeled under. Therefore you still must know what that one would be.
The main point is that you not only have to know the words you wrote or the flow of your story but from a business stand point you must be able to show agents and publishers why you are different and better than the next other to come along or the ones that came before. The ability to label your own work is not one that comes easily for most of us. Perhaps ask your beta readers how they would describe your story and what genre they feel it would be in then use that as a way to help narrow down how you want to classify it.In your description you can mention traits of other genres you incorporated but knowing the overall genre will be a huge help when it comes to finding an agent or publisher and presenting your work to them.