Market Research&

Sales Forecasting

What is Market Research?

• Simply a matter of finding out as much as you can before committing yourself to an irretrievable step

• When you do not have answers through your own Market Information and Intelligence System

What to find out?

• What does the customer need?

• Who is the target audience and how much can you find out about them?

• What is the competition?

• Are there any gaps in the market?

• Would the product be acceptable in the market?

Do I need Market Research?

• Yes. Provided I know what I want.

The MR Process

• What is the Marketing Problem?• What is the Research Problem?• Developing the Research Plan• Research Approach• Research Instruments• Collecting the Information• Analysing the information• Presentation of findings

Data sources

• Reference Library

• Directories of Products/Companies

• The Bombay Stock Exchange

• Industry/Trade Journals

• Trade fairs and Exhibitions

• Company Annual Reports

• Internet

Testing Product Acceptability

• If your product is a knock - down kit , give it to the factory peon to assemble it.

• Post the item back to yourself and assess the damage the transporter does to it.

• Try various types of packaging and choose a suitable cost effective option.

• Try a number of product names and determine which is more acceptable.

Sales Forecasting - Why is it necessary?

• To raise the necessary cash for investment and operations

• to establish capacity and output levels

• to acquire and stock the right amount of supplies

• to hire the required number of people

Market

• A set of all actual and potential buyers of a product or service

Potential Market

• A set of consumers who profess a sufficient level of interest in a product or service

Available Market

• A set of consumers who have interest , income and access to a particular product or service

Qualified Available Market

• A set of consumers who have interest, income, access and qualifications for the particular product or service

Target Market

• Part of the qualified available market the company decides to pursue

Penetrated Market

• A set of consumers who are buying the company’s product or service

Market Demand

• Total volume that would be bought by a defined

• customer group

• geographical area

• time period

• marketing environment

• marketing programme

Market Potential

• Boom period

• Recession

Market Minimum

• The market potential of the product with minimum marketing effort of the industry

Sensitivity of Demand

• Market Potential - Market Minimum

Market Forecast

• Market demand corresponding to the industry marketing expenditure

• This would be lower than the market potential

Company Demand

• Estimated share of market demand at alternative levels of company marketing effort in a given time period

Company Sales Forecast

• Expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

Sales Target

• Sales goal for a product line,company division or a sales rep.It is a benchmark to evaluate achievements against goals set.

Sales Budget

• Conservative estimate of the expected volume of sales and is used for purchasing.production and cash flow decisions

Estimating Market Potential• Chain - ratio method• Demand for Complan =• Population *• per capita discretionary income *• % discretionary income on food *• % spent on beverages *• % spent on health beverages *• % spent on white health beverages *• % spent on Complan

Other methods

• Market built - up method

• Industry sales and market shares

Estimating Future Demand

• Survey of buyer’s intentions

• Composite of sales force opinions

• Expert opinion

• Past sales analysis

• Market test method