|



 



„
i
 


 

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 .

9
 
 

  

g. 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
9
 
 

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

9
 
 
9
 g







© 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.

9
 
 

 !"#
$
%&'(
© 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

9
 
 

• 
 

© =n order to get a ³feel´ 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

9
 
 

ñ 


 


 



© econdary information is information that has
been gathered in some other context and is
readily available.
© econdary information provides the base
and the starting point for the market and
demand analysis. =t indicates what is known
and often provides leads and cues for
gathering primary information required for
further analysis.

9
 
 

9 
 
 


© econdary information, though useful, often

does not provide a comprehensive basis for
market and demand analysis. =t 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

9
 
 

 = 

 
 

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
© =ncome and price elasticity¶s of demand
© Motives for buying
© Purchasing plans and intentions
© atisfaction with existing products
© Unsatisfied needs
© Attitudes toward various products
© Distributive trade practices and preferences
© ocio-economic characteristics of buyers
9
 
 


~ | 



   
© 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

9
 
 



   





 

© §ased 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
© §reakdown of demand
© Price
© Methods of distribution and sales promotion
© Consumers
© upply and competition
© Government
9
 

policy 


6 

 




© 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.

9
 
 








©=
 
  These
methods rely essentially on the
judgment of experts to translate
qualitative information into quantitative
estimates. The important qualitative
methods are:
© áury of executive method
© Delphi method

9
 
 

9
==


| 


 
)"
"
*
!"'
!"+
,)
#)#)

9
 
 


© ===   
  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

9
 
 


 d
 
|
At 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

9
 
 


THV˜
 

9