How can companies accurately measure and forecast demand CHAPTER-3, SCANNING THE MARKETING ENVIRONMENT, FORECASTING DEMAND, AND CONDUCTING MARKETING RESEARCH. KOTLER MARKETING MANAGEMENT

1. HOW CAN
COMPANIES
ACCURATELY
MEASURE AND
FORECAST
DEMAND?

2. 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

3. Potential
market
Available
market
Target market
Penetrated
market
POTENTIAL WAYS TO BREAK DOWN THE MARKET—

4. 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.

6. TOTAL MARKET POTENTIAL
TOTAL MARKET
POTENTIAL
=
POTENTIAL
NO. OF
BUYERS
AVERAGE
QUANTITY
PURCAHSED
THE PRICEX X

7. AREA MARKET POTENTIAL
AREA MARKET
POTENTIAL
= TOTAL NO. OF
BUYERS
ESTIMATED QUANTITY
PURCHASED BY EACH
BUYER
X

9. SURVEY OF BUYER’S INTENTIONS
PURCHASE PROBABILITY
SCALE

10. COMPOSITE OF SALES FORCE
OPINIONS
ASK SALES REPRESENTATIVES TO
ESTIMATE THEIR FUTURE SALES.

11. EXPERT OPINIONS

12. PAST-SALES ANALYSIS

13. MARKET-TEST METHOD

14. These slides were created
by NANDINI GUPTA, AKGEC Ghaziabad,
during a Marketing internship
by Prof. Sameer Mathur, IIM Lucknow