Demand Forecasting & Market Potential

Analysis

Research-Meaning
Why people undertake

research?

Definition-Marketing
Research(MR)

MR refers to the systematic gathering,

recording and analysing of data about
problems relating to marketing of goods
& services.

-By A.M.A.

MR is the systematic design,

collection, analysis, and reporting
of data & findings relevant to a
specific marketing situation
facing the company.
- By Philip
Kotler

The most common MR

activities
Determination of mkt. characteristics
Measurement of mkt. potentials
Mkt. share analysis
Sales analysis
Studies of business trends
Competitive product studies
New product acceptance & potential
Pricing studies, etc.

Market ResearchDefinition
It deals with actual &
potential buyers and a
specific market.
e.g. Formulation of mktg. mix
for a urban or rural or metro
market.

ExampleHUL gets the managers to interact directly with

consumers to minimise risk.

It launched a programme called Consumer
Windows in Jan.2000
This focuses upon consumers life in generalwhat matters to him/her, his/her life style, etc.
The inputs are all documented on what the
company calls DOCKETS (Dossier in Consumer
Knowledge, Experiences and Trends)
This data can be referred to at a later date.

Research Process-Steps
involved in research process
1. Define R. problem
-focus manner
2. Review of literature
-Books, websites,etc.
3. Research objectives
-specific, measurable, attainable
4. R.design
-scope,time,entire frame work
5. Sampling design

6.Formulation of hypothesis(if any)

7.Data collection
8.Analysis of data
9.Results & inferences
10.Preparation of report and
presentation/Report writing

MIS - Introduction
Whenever we studyMktg. plans, mktg, strategies,

sales forecasting & mktg.

control, etc.
We realise that every decision
area of mktg. needs the support
of mktg. information.

MIS-Definition
A continuously interacting
structure of people, equipment
& procedure to gather, sort,
analyse, evaluate and
distribute relevant, accurate &
timely information to the
marketing decision makers.

Advantages of MIS to an
Organisation

Helps in mktg. planning by making available the

right information at the right time, place & price.

Helps in effective tapping of mktg. opportunities &
protection from mkt. threats.
Provides information about the changing trends
through mkt. intelligence.
Helps in adaptation of mkt. offerings as per the
changing tastes of customers.
Better quality of mktg. information improves the
quality of mktg. decisions.
Helps in controling the mktg. activities.

What is forecating?
It helps in analysing mkt.

opportunities & developing

& monitoring an effective
mktg. programme.

Demand implies 3 things:

1.Willingness to buy a
product(interest)
2.Ability(money)
3.Willingness to purchase it with
the above means (access)

Demand depends on several

factors
Price of product
Price of substitutes

Income level
Tastes & preferences
Size & composition of

population, etc.

Market demandDefinition
It 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 programme.
It is not a fixed no. but a function of specific
conditions.
It is called mkt. demand function or
mkt.response function
It may be estimated per product, per pdt. line, per
region, per zone, etc. demand depends to a large
extent on the mktg. programme.

What is demand forecasting?

(D.F.)
An activity of estimating the quantity of

a pdt/service that consumers will

purchase.
It is the prediction of what will happen to
your companys existing pdt. sales.
It would be the best to determine D.F.
using multi-functional approach.
The final D.F. is the consensus of all
participating managers.

Marketing forecast
It indicates how much of a product

is likely to be bought by customers

during a specified future period in
a specified mkt. at specified prices.
In context of sales, it is called

-----------

Company sales
forecastIt is the expected volume it
would sell during a future
period with its specified mktg.
plan and tactics in the given
mktg. environment.

Company Potential
It is a quantitative estimate of
the total possible sales of a
product of a company under
the highest mktg. effort made
by the company.

Market potential
It is a quantitative estimate of the total possible sales
by all the firms selling the pdt.in a specified market.
It is an estimate of sales under most favourable
conditions.
It is given by, Q=nqp
Where, Q= Total mkt. potential
n=No. of buyers in a mkt.
q=Quantity purchased by an average buyer
p=Average price per unit

What is Market Potential

Analysis(MPA)
It reveals the potential demand for pdts. &

services in a market.
Got Growth

. Discover demand for your pdts. & s/cs

.Rank & prioritize markets to enter.
.Find unfulfilled potential in existing mkts.

Benefits of MPAUnderstand mkt. potential for a

single store, network of stores or for

new mkts.
Deploy resources effectively by
ranking mkts. in priority order.
Forecast total opportunity in terms of
no. of customers & revenue potential.
Estimate your mkt. share