Presentation On

Market and Demand Analysis

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WHY MARKET & DEMAND ANALYSIS ?

Companies use market demand analysis to understand how much consumer demand exists for a product or service. This analysis helps management determine if they can successfully enter a market and generate enough profits to advance their business operations. While several methods of demand analysis may be used, they usually contain a review of the basic components of an economic market .

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Steps of the market & demand analysis

1. Define the objectives of the study

2. Conduct a situational analysis of market

3. Determine sources of secondary data and collect available data

4. Market survey

5. Process and analyze both secondary and primary data

6. Characterize the present market

7. Forecast future market demand

8. Market planning

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Steps in Market and Demand Analysis Steps in Market and Demand Analysis

 

 

 

 

 

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1.Define the objectives of the study

The initial step in the market component is to set down in writing a preliminary statement of objectives in as much detail as possible. Obviously, the overall objective of the market analysis is to measure and forecast the market to determine the project will produce the right product at right time and at the right place. A good procedure is to structure the objectives in question form. When setting objectives, always keep in mind how the information will be used when it is obtained.

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The objectives of the market analysis are to answer the questions like:-

What is the market area? What size and capacity pump should be

manufactured? What models should be offered and to

what industries? What price will ensure acceptance

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2. Conduct a situational analysis of market

In order to get a “feel” of the relationship between the product and its market, the project analyst may informally talk to customers, competitors, middlemen, and others in the industry. Wherever possible, he may look at the experience of the company to learn about the preferences and purchasing power of customers, actions and strategies of competitors, and practices of the middlemen

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3. Determine sources of secondary data and collect available data Secondary information is information that has

been gathered in some other context and is readily available.

Secondary information provides the base and the starting point for the market and demand analysis. It indicates what is known and often provides leads and cues for gathering primary information required for further analysis.

 

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4. Market survey

Secondary information, though useful, often does not provide a comprehensive basis for market and demand analysis. It needs to be supplemented with primary information gathered through a market survey.

The market survey may be a census survey or a sample survey; typically it is the latter

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Information Sought in a Market Survey

The information sought in a market survey may relate to one or more of the following:

Total demand and rate of growth of demand Demand in different segments of the market Income and price elasticity’s of demand Motives for buying Purchasing plans and intentions Satisfaction with existing products Unsatisfied needs Attitudes toward various products Distributive trade practices and preferences Socio-economic characteristics of buyers

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5. Process and analyze both secondary and primary data

Processing the data involves editing, coding and tabulating. The effort involved in processing the gathered data depends to an extent on whether they are secondary or primary data, in turn, whether the survey instrument used as mail questionnaire, the personal interview, or the telephone interview. Also more effort is required to process data collected during the unstructured interview than structured interview

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6. Characterize the present market

Based on the information gathered from secondary sources and through the market survey, the market for the product/service may be described in terms of the following:

Effective demand in the past and present Breakdown of demand Price Methods of distribution and sales promotion Consumers Supply and competition Government policy

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7. Forecast future market demand

The current market demand for the product, the past market demand growth pattern, and other market characteristics influence the choice of an appropriate forecasting technique. The budget available, the time required to develop the forecast, and the desired accuracy are other factors that influences the selection of a forecasting technique.

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Methods of Demand Forecasting

I Qualitative Methods: These methods rely essentially on the judgment of experts to translate qualitative information into quantitative estimates. The important qualitative methods are:

Jury of executive method Delphi method

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II Time Series Projection Methods: These methods generate forecasts on the basis of an analysis of the historical time series. The important time series projection methods are: Trend projection –methodExponential smoothing method Moving average method

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III Causal Methods: More analytical than the preceding methods, causal methods seek to develop forecasts on the basis of cause-effect relationships specified in an explicit, quantitative manner. The important causal methods are :

Chain ratio method Consumption level method End use method Leading indicator method Econometric

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8. Market PlanningAt this point in the market analysis, the demand forecast for the

project has been developed. This demand forecast is an estimate of the demand expected for the product, given existing economic conditions, competitors, and the level of marketing effort. A marketing plan usually has the following components:-

Current marketing situation Opportunity and issue analysis Objectives Marketing strategy Action program me

 

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THVTHANKU !!!

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