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									Forecast & Demand Measurement
Forecast: To predict or work out something that is likely to happen. The major concepts in demand measurement are market demand and company demand.  Market demand: It is the total volume that would be bought by a customer group in a geographical area in a time period in a marketing environment under a marketing program.  Company demand: It is the company’s estimation share of market demand at alternative levels of company marketing effort in a given time period.

Two types of forecasting
Demand forecasting :It refers to forecasting of the product that is, whether the manufactured product is having demand or not. sales forecasting :it refers to the estimation of sales, where we can know that sales has been made according to demand . Demand forecasting and sales forecasting important for marketing planning and control. are

The measures of market demand
Demand can be measured for different product levels,different space levels & different time levels.each demand measures serves a specific purpose. * Different product levels such as industry sales,company sales,product line sales. * Different space levels such as world,USA,region. *Different time levels such as short run, medium run & long run.

Productive ways to break down the market
1. The Potential market is set of consumers who profess a sufficient level of interest in a market offer.
2. The available market is the set of consumers who have interest, income & access to a particular offer.

3. The target market is the qualified available market the company decides to pursue.
4. The penetrated market is the set of consumer who are buying the company product at present.

Concept of demand measurement

Market demand Company demand



Company sales forecast
Company sales potential


Market forecast and market potential

The market forecast shows expected market demand, not maximum demand


Market potential is the limit approached by market demand

Market potential during prosperity and in recession
Mkt potential in Prosperity

Mkt Demand In The Specific Period

Mkt potential in recession

Industry marketing expenditure

Estimating Current Demand
Total Market potential Area Market Potential Industry sales and market shares

Total Market potential

Total market potential is the maximum amount of sales that might be available to all the firms in an industry. Total market potential = Potential number of buyers x Average quantity purchased by a buyer x the price per unit

Chain ratio method
A company producing cold beverages can estimate the demand of cold-non-alcoholic beverages in the following manner through this method: Demand for cold beverages= Population x per capita personal discretionary income x average percentage of pdi spent on beverages x per capita amount spent on cold beverages as a percentage of amount spent on beverages x per capita of amount spent on cold beverages spent on non alcoholic beverages.

Area Market Potential
This method is useful in selecting the best territories for the companies and allocating their marketing budget optimally among these territories.
 

Market-buildup method: Primarily used by business marketers. Multiple factor index method: Primarily used by consumer marketers.

Market-buildup method
This method calls for identifying all the potential buyers in each market and estimate and estimating their potential purchases. Business buyers also pay attention to current and expected economic factor such as level of productions, investment, consumer spending and interest rate.

Multiple-Factor Index Method
Most commonly used method in consumer markets is the straight forward index method

Industry Sales and Market Shares
Identifying competitors and estimating sales.

Thank you

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