Download - Forecasting & demand measurement
Forecasting & Demand Measurement
Demand MeasurementMarket Company
Demand Market Demand Company Demand Function
Potential Market Potential Company Sales Potential
Forecast Market Forecast Company Sales Forecast
Market Demand (definition)
• Market Demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.
Marketing Potential (definition)
• Marketing Potential is the limit approached by Market demand as industry marketing effort (Expenditures) goes to infinity, for a given environment.
Market Forecast (definition)
• Only one of the many possible levels of industry marketing effort (expenditure) will actually occur. The Market Demand corresponding to the expected effort is called the Market Forecast.
Company Demand (definition)
• Company Demand is the Company’s estimated share of market demand at alternative levels of Company’s marketing effort in a given time period.
Company Sales Potential (definition)
• Company Sales Potential is the sales limit approached by the company demand as the company marketing effort increases relative to that of Competitors.
Company Sales Forecast (definition)
• Company Sales Forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.
Market Build Up Method (area market potential)
• Standard Industrial Classification Major Industry Groups Furniture = 25 Each industry Sub Groups HH = 251 And Product Category Wood F=2521
Standard Industrial Classification
Annual Sales (Million)
No. of Establishments
Potential Sales per Sales (Million)
M.P.
2511 $1 6 10 60
$5 2 10 100
2521 $1 3 5 15
$5 1 5 25
Market Potential = 200
• Multiple Factor Index MethodSingle Index => (say)population %=>Market
PotentialBuying Power Index (B.P.I.)B.P.I. % Weight
Disposable Personal Income
2.00 0.50
Retail Sales 1.96 0.30
U.S. Population 2.28 0.20
2.04
• Brand Development Index (B.D.I.)
Lower BDI =>Higher Market OpportunityHigher BDI=>Higher Market Opportunity to Share
B.D.I.(a/b) * 100
Territory(City)
% Brand Sales(a)
%Category Sales (b)
114 1 3.09 2.71
65 2 6.74 10.41
91 3 3.49 3.85
120 4 0.97 0.81
140 5 1.13 0.81
104 6 3.12 3.00
• Industry Sales and Market Shares
1.Industry Trade Association(Elcoma,IEMA,FMA)2.Markets research Audit Report (ORG,Nielsen)3.Own methods/ models
Estimating Future Demand
• What people say … (buyer’s opinion,sale,expert)
• What people do … (Test Market Response)
• What people have done… (Time Series… Statistics)
• What people saySurvey of Buyer’s IntentionsDo you intend to buy …..within next…..year.no chance certain0.00 100.00{Purchase Probability Scale}Composite of Sales Force OpinionsExpert opinion : Trade,Consultants,associations
• What people do
Test Market (New Product)
• What people have done
Post sale analysisTime seriesExponential SmoothingStatistical Demand Analysis {Casual Factors}Econometric Analysis {Damo. Guj.}