MARKET AND

DEMAND ANALYSIS

MBA 4TH SEM

MOHIT SING CHAUHAN
HONEYISHWAR
DEEPAK
MARKET & DEMAND ANLAYSIS
It should be carried out in an systematic manner.
Key steps involved
1) Situational analysis and specifications of
objectives
2) Collection of secondary information
3) Conduct of market survey
4) Characteristic of market survey
5) Demand forecasting
6) Uncertainties in demand forecasting
7) Market planning
SITUATIONAL ANALYSIS AND
SPECIFICATIONS OF OBJECTIVES
In order to get a feel of the relationship between
product and its market, the project analyst may
informally talk to customers, competitors ,
middlemen and others in the industry.
It is necessary to spell out its objectives clearly and
comprehensively .
To illustrate, suppose that a small but
technologically competent firm has developed an
improved air cooler based on a new principle that
appears to offer several advantages.
The chief executive of the firm needs information
about where and how to market the new air cooler.
OBJECTIVES IN THIS CASE ARE:
Who are the buyers of air coolers?
What is the total current demand of air coolers?
What is the break-up of demand for air coolers of
different sizes?
What price will the customers be willing to pay
for the improved air coolers?
What price and warranty will ensure its
acceptance?
What are the prospects of immediate sales?
COLLECTION OF SECONDARY
DATA
The important sources of Secondary
information useful for market and demand
analysis are:
1) Census of India
2) National sample survey reports
3) Plan reports
4) Statistical abstract of the Indian Union
5) India year book
6) Statistical year book
CONDUCT OF MARKET SURVEY
The market survey may be census survey,
Census surveys are employed principally for intermediate
goods and investment goods when such goods are used by
small number of firms
Steps in sample survey
Define the target population
Select the sampling scheme and sample size
Develop the questionnaire
Recruit and train the field investigators
Obtain information as per the questionnaire from the sample of
respondents
Scrutinize the information gathered
Analyze and interpret the information
CHARACTERIZATION OF THE
MARKET
Effective demand in the past and present
Breakdown of demand
Price
Methods of distribution and sales promotion
Consumers
Supply and competition
Government policy
DEMAND FORECASTING
Methods
QUALITATIVE METHOD These methods rely
essentially on the judgment of experts to
translate qualitative information into quantitative
information. Important qualitative methods:
1) JURY OF EXECUTIVE METHOD It involves
soliciting the opinions of a group of managers on
expected future sales and combining them into
a sales estimate.
2) DELPHI METHOD It is used for eliciting the
opinions of a group of experts with the help of a
mail survey.
 TIME SERIES PROJECTION METHOD These methods
generate forecasts on the basis of an analysis of the
historical time series. Important time series projection
method
1) TREND PROJECTION METHOD The trend projection
method involves determining the trend of consumption
of analyzing past consumption statistics and projecting
future consumption by extrapolating the trend.
2) EXPONENTIAL SMOOTHING METHOD- In this method,
forecasts are modified in the observed errors.
3) MOVING AVERAGE METHOD As per this method of sales
forecasting , the forecast for the next period is equal to
the average of the sales for several preceding periods.
 CASUAL METHODS These methods seek to develop
forecasts on the basis of cause-effect relationships
specified in an explicit , quantitative manner. Important
casual methods are:
1) CHAIN RATIO METHOD This method use a simple
analytical approach to demand estimation. However, its
reliability is critically dependent on the ratios and rates
of usage used in the process of determining the sales
potential.
2) CONSUMPTION LEVEL METHOD This method estimates
consumption level on the basis of elasticity coefficients,
the important ones being the income elasticity of
demand and the price elasticity of demand.
3) END USE METHOD This method also referred to as the
consumption coefficient method, involves the following steps:
Identify the possible uses of the product.

Define the consumption coefficient of the product of various

uses.
Project the output levels for the consuming industries.

Derive the demand for the product.

4) LEADING INDICATOR METHOD These are variables change

ahead of other variables , the lagging variables. Two basic
steps:
Identify the appropriate leading indicators

Establish the relationship between the leading indicator and the

variable to be forecast.
5) ECONOMETRIC METHOD- This is a
mathematical representation of economic
relationship derived from economic theory.
Two types
SINGLE EQUATITION MODEL This model
assumes that dependent variable is influenced by
one or more independent variables.
SIMULTANEOUS EQUATION MODEL This model
portrays economic relationship in terms of two
or more equations
MARKET PLANNING
COMPONENTS
Current marketing situation- it examines the market
situation, distribution situation and the macro
economic environment,
Opportunity and issue analysis- In this section, SWOT
(strength, weakness, opportunity, threat) is conducted
Objectives- It has to be clear cut, specific and
achievable
Marketing strategy It covers target segment,
positioning, product line, price, distribution , sales
promotion and advertising.
Action programme action programmes operationalize
the strategy.
 THANK
YOU