FORECASTING DEMAND AND MEASUREMENT

Forecasting Demand and Measurement

PURPOSEIDENTIFY MARKET OPPURTUNTIES

HOW?

MEASURE AND FORECAST SIZE

GROWTH AND POTENTIAL MARKET OPPURTUNITIES

WHO?

MAJOR CONCEPTS IN DEMAND MEASUREMENT

MARKET DEMAND

COMPANY DEMAND

DEMAND FUNCTIONSALES FORECASTPOTENTIAL

DEMAND MEASUREMENT

WAYS TO MEASURES OF MARKET DEMAND

POTENTIAL MARKET

AVAILABLE MARKET

TARGET MARKET

PENETRATEDMARKET

MARKET FORECAST

MARKET DEMAND CORRESPONDING TO THE LEVEL OF INDUSTRY MARKETING EXPENDITURE

MARKET POTENTIALLIMIT APPROACHED TO MARKETING SKILLS AND GIVEN ENVIRONMENT

Marketing Demand as a function of Marketing Expenditure

• Planned expenditure

Market potential, Q2

Market forecast, QF

Market minimum, Q1

Industry Marketing ExpenditureMar

ket D

eman

d in

the

Spec

ific

Perio

d

Marketing Demand as a function of Marketing Expenditure

• Recession

Market Potential(prosperity)

Market Potential(recession)

Industry Marketing ExpenditureMar

ket D

eman

d in

the

Spec

ific

Perio

d

Prosperity

COMPANY DEMAND

IS THE COMPANY’S ESTIMATED SHARE OF MARKET DEMAND AT ALTERNATIVE LEVELS OF COMPANY MARKETING EFFORT AT A GIVEN TIME PERIOD

MARKETING EXECUTIVES WOULD LIKE TO ESTIMATE..

TOTAL MARKET POTENTIALAREA MARKET POTENTIALTOTAL INDUSTRY SALES AND MARKET SHARE

TOTAL MARKET POTENTIAL

MAXIMUM SALES

AVAILABLE TO ALL CUSTOMER

DURING A GIVEN TIME PERIOD

Area Market PotentialEstimating market potential of different

MAXIMUM AMOUNT OF SALES IN AN AREA DURING GIVEN PERIOD OF TIME

THE 2 MAJOR METHODS OF ASSESSING AREA MARKET POTENTIAL ARE…

MARKET-BUILD-UP METHOD

PURCHASESMULTIPLE-FACTOR INDEX METHOD- 

INDUSTRY SALES AND MARKETING SHARES

–IDENTIFYING COMPETITORS AND ESTIMATING THEIR SALES–DERIVE DATA FROM: INDUSTRY TRADE ASSOCIATION–BUY REPORTS FROM MARKETING RESEARCH (E.G. NIELSEN)–INDUSTRY DATA, COMPETITORS DATA–OVER-ALL OR BRAND BY BRAND

Industry

Macro economiC

Industry

Company Forecast

ALL FORECASTS ARE BUILT ON ONE OF THE THREE INFORMATION BASES:

WHAT PEOPLE SAY(SURVEY)

WHAT PEOPLE DO (TEST MARKET)

WHAT PEOPLE HAVE DONE (BUYING HISTORY)

• SURVEY OF BUYING INTENTIONS• FORECASTING• IS THE ART OF ANTICIPATING WHAT

BUYERS ARE LIKELY TO DO UNDER A GIVEN SET OF CONDITIONS.

• DO YOU INTEND TO BUY A CAR IN THE NEXT 6 MONTHS?• PURCHASE PROBABILITY SCALE•  

Estimating Future Demand

0.00 0.20 0.40 0.60 0.80 1.00No Chance Slight

PossibilityFair Possibility Good

PossibilityHigh Possibility

Certain

Summary:

6.Making the decision

1.Defining the problem

& objectives

2.Developing the research plan

3.Collectinginformation

4.Analyzing the information

5.Presenting the findings

Sample plan, Sources, Contact Methods, Instruments

Customer is happyThe brand is profitableEmployees are satisfied

Market and company Demand

Total and Area Market Potential, industry sales & market share

Sales Force, Experts, History and Market Sales

JEET PAREKH

Created by --

Indian Institute of Technology ,Banaras Hindu University Varanasi

Linkedin :https://in.linkedin.com/pub/jeet-parekh/54/b10/51b

During an Internship by --

Prof. Sameer Mathur

Indian Institute of Management ,Lucknow

(www.IIMintenship.com)