how can companies accurately measure and forecast demand
TRANSCRIPT
EXAMPLE:-
SALES FORECAST
USED BY
Finance to raise cash for investment
and operations.
Manufacturing to establish capacity
and output
Human resource to hire the needed
workers
Potential market
Available market
Target market
Penetrated market
POTENTIAL WAYS TO BREAK DOWN THE MARKET—
Market Demand: Total volume bought by the target market.
Market Forecast: The market demand corresponding to the level of industry marketing expenditure. Company Demand: Company’s estimated share of market demand.
Company sales forecast: Expected level of company sales based on chosen marketing plan.
Company sales potential: Sales Limit approached as the company marketing effort increases relative to that of competitors.
VOCABULARY FOR DEMAND MEASUREMENT:
Market Potential: Limit reached by market demand as industry marketing expenditure reaches infinity.
ESTIMATING CURRENT DEMANDS:
TOTAL MARKET POTENTIAL
TOTAL MARKET POTENTIAL =
POTENTIAL NO. OF BUYERS
AVERAGE QUANTITY
PURCAHSEDTHE PRICEX X
ESTIMATING CURRENT DEMANDS:
AREA MARKET POTENTIAL
AREA MARKET POTENTIAL = TOTAL NO. OF
BUYERS
ESTIMATED QUANTITY PURCHASED BY EACH
BUYERX
ESTIMATING FUTURE DEMANDS:
COMPOSITE OF SALES FORCE OPINIONS
ASK SALES REPRESENTATIVES TOESTIMATE THEIR FUTURE SALES.