Forecasting & Demand MeasurementDemand Measurement Market 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. . for a given environment.Marketing Potential (definition) • Marketing Potential is the limit approached by Market demand as industry marketing effort (Expenditures) goes to infinity. . The Market Demand corresponding to the expected effort is called the Market Forecast. .Market Forecast (definition) • Only one of the many possible levels of industry marketing effort (expenditure) will actually occur. .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 Each industry Sub Groups And Product Category Furniture = 25 HH = 251 Wood F=2521 . Standard Industrial Classification 2511 2521 Annual Sales (Million) $1 $5 $1 $5 No. 60 100 15 25 Market Potential = 200 .P. of Potential Sales Establishments per Sales (Million) 6 2 3 1 10 10 5 5 M. 04 .• Multiple Factor Index Method Single Index => (say)population %=>Market Potential Buying Power Index (B.20 2.S.) B.P. Population % 2.P.28 Weight 0.30 0.50 0.96 2.I. Disposable Personal Income Retail Sales U.I.00 1. D.85 0. (a/b) * 100 Territory (City) % Brand Sales %Category (a) Sales (b) 114 65 91 120 140 104 1 2 3 4 5 6 3.00 Lower BDI =>Higher Market Opportunity Higher BDI=>Higher Market Opportunity to Share .) B.74 3.81 0.49 0.97 1.41 3.09 6.12 2.13 3.D.81 3.71 10.I.I.• Brand Development Index (B. Industry Trade Association(Elcoma. Own methods/ models . Markets research Audit Report (ORG.Nielsen) 3.IEMA.• Industry Sales and Market Shares 1.FMA) 2. sale.expert) • What people do … (Test Market Response) • What people have done… (Time Series… Statistics) .Estimating Future Demand • What people say … (buyer’s opinion. year.00 100.. no chance certain 0.Consultants.associations ..• What people say Survey of Buyer’s Intentions Do you intend to buy ….00 {Purchase Probability Scale} Composite of Sales Force Opinions Expert opinion : Trade.within next…. • What people do Test Market (New Product) . Guj.• What people have done Post sale analysis Time series Exponential Smoothing Statistical Demand Analysis {Casual Factors} Econometric Analysis {Damo.} .