DR MEENAKSHI SHARMA

Market and demand analysis

* Situational Analysis & Specifications of Objective
* Collection of Secondary Information.
* Conduct of Market Survey.
* Characterization of the Market.
* Demand Forecasting.
* Uncertainties in Demand Forecasting.
* Market planning.
Key steps of market and demand
analysis
Characterstics of Market
 Effective Demand in the Past and Present Production
 Imports – Exports

 Nature of Product
 Consumer Groups
 Geographical Division
 Price
 Methods of Distribution and Sales Promotion
 Consumers
 Supply and Competition
 Government Policy
Conduct of market survey
The market survey may be a census survey or a sample survey.
Census survey are employed principally for intermediate goods &
investment goods when such goods are used by a small number of
firms.
• Steps in a 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
– Scrutinizes the Information Gathered
– Analyze and interpret the Information

Situational analysis
 Analysis the relationship between the product and it’s market, the
project analyst may informally talk to customers, competitors,
middlemen and other in the industry.
 Look at the experience of the company to learn about the purchasing
power of customer, action & strategies of competitors.
 The objectives of market & Demand analysis, to answer the following
question : (for air coolers)
1. Who are the buyers of air cooler?
2. What is the total current demand for air coolers?
3. What price will the customer be willing to pay for the improved
air cooler.
4. What price & warranty will ensure its acceptance?
5. What are the prospects of immediate sales? etc.

Methods of Demand Forecasting
1. Qualitative Method
 Jury of Executive Method
 Delphi Method

2. Projection Method
* Time series projection Method
* Exponential smoothing Method
* Moving Average Method
3
3 Causal Methods
Causal methods seek to develop forecasts on the
basis of cause-effects relationships specified in an
explicit, quantitative manner.
1. Chain Ratio Method
2. Consumption Level Method
3. End Use Method
4. Leading Indicator Method
Demand Forecasting
 Qualitative Methods –
 These methods rely essentially on the judgment of
experts to translate qualitative information into
quantitative estimates – Used to generate forecasts if
historical data are not available (e.g., introduction of
new product)
 The important qualitative methods are:
 Jury of Executive Method
 Delphi Method
Time series Projection Methods
 These methods generate forecasts on the basis of an
analysis of the historical time series.
 Assume that what has occurred in the past will
continue to occur in the future
 Relate the forecast to only one factor - timeThe
important time series projection methods are: –
 Trend Projection Method
 Exponential Smoothing Method
 Moving Average Method
Casual Methods
 Causal methods seek to develop forecasts on the basis
of cause-effects relationships specified in an explicit,
quantitative manner.
 Chain Ratio Method
 Consumption Level Method
 End Use Method
 Leading Indicator Method
Uncertainties in Demand
Forecasting
 Data about past and present markets.
 Lack of standardization:- product, price, quantity, cost,
income….
 Few observations – Influence of abnormal factors:- war,
natural calamity
 Methods of forecasting
 Inability to handle unquantifiable factors
 Unrealistic assumptions
 Excessive data requirement
Uncertainties in Demand
Forecasting
 Environmental changes
 Technological changes
 Shift in government policy

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