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DemandForecastingandMeasurementDemandMeasuringandforecastingmarketdemandisprobablythefirstmajortaskofamarketer.Neededinformationformark

etopportunities:•Size•Growth•ProfitpotentialSalesforecastsarebasedonestimatesofdemand.Demand:MarketsWaysto

classifymarkets:•Potentialmarket:setofconsumerswhopossessasufficientlevelofinterestinaproductorservice.•Availablemarket:setofconsumerswhohaveint

erest,income,andaccesstoaproductorservice.•Targetmarket:partofthequalifiedavailablemarketacompanydeci

destopursue.•Penetratedmarket:setofconsumerswhoarebuyingthecompany’sproductorservice.Demand:MeasurementKeyTerms:Marketdemand:

thetotalvolumethatwouldbeboughtbyadefinedcustomergroupinadefinedgeographicalareainadefinedtimeperiod

inadefinedmarketingenvironmentunderadefinedmarketingprogram.Marketdemandisnotafixednumber,butafunctionofthestatedconditions.Marketf

orecast:marketdemandestimatewhenusingaspecifiedmarketingeffort.Marketpotential:thelimitapproachedbymarketdemandasmarketingeffortsappr

oachinfinityforagivenmarketingenvironment.Demand:MeasurementCompanydemandandSalesforecastsCompanydemandisthecompany’sestimatedshareofmarketdeman

datalternativelevelsofcompanymarketingeffortinagiventimeperiod.Companysalesforecastistheexpectedlevel

ofcompanysalesbasedonachosenmarketingplanandanassumedmarketingenvironment.Companysalespotentialisthesalelimitapproachedbythecompa

nydemandascompanymarketingeffortincreaserelativetocompetitors.Demand:EstimatingCurrentDemandImportantAreasofFocus:TotalMarketPotential(TMP):th

emaximumnumberofsalesthatmightbeavailabletoallfirmsinanindustryduringagivenperiod,underagivenlevelofindustrymarketingeffort,andenvi

ronmentalconditions.AreaMarketPotential(AMP):thedefinitionisthesameas“TotalMarketPotential”,exceptareaorregioni

sconsidered.Demand:EstimatingCurrentDemandMethodsUsedtocreateestimatesTMP:potentialnumberofbuyersxtheaver

agequantitypurchasedbyabuyerxprice(mostcommonmethodused)AMP:•MarketBuild-UpMethod(B2B)•MultipleFacto

rIndexMethod(B2C)•BrandDevelopmentIndexDemand:EstimatingCurrentDemandMarketBuild-UpMethod:identifyallpotentialbuyersandestimatetheirpotentia

lpurchases.MultipleFactorIndexMethod:identifyallpotentialfactorsthatcouldcreatesales,assignaweightmeasu

retoeach,thencreateafunction/model.Oneproblemisthatweightassignmentsduetotheirarbitrarynaturecouldcauseinac

curatetotalestimates.Demand:EstimatingCurrentDemandBrandDevelopmentIndex:index/comparisonofbrandsale

stoproductcategorysalesApplication(twodifferentbeliefs)•LowertheBDI,thegreaterthemarketopportunity(duetolowpenetration)•HighertheBDI

,thegreaterthemarketopportunity(duetoexistingcustomers,achancetoreinforcecustomerloyaltyispresentormoreeasilycaptureagreaterm

arketshare)Lastly,knowingactualindustrysalesisimportant:identifyingcompetitorsandestimatesoftheirsales.T

hisinformationcanindicateactualmarketsize.Demand:EstimatingFutureDemandEstimatingfuturedemandiscalledforecasting,theartofanticipatingwhatbuyersar

elikelytodounderagivensetofconditions.Themoreunstablethedemand,themorecriticalisforecastingaccuracyandthemoreelaboratetheforecasti

ngmethodology.Demand:ForecastingMostcompaniesfollowathreestepprocesswhendevelopingasalesforecast.•Macroeconomicforecast•Indus

tryforecast•CompanysalesforecastDemand:ForecastingMethodsforsalesforecasting:•Surveyofbuyers’intention

s•Compositeofsalesforceopinions•Expertopinions•PastSalesanalysis•MarkettestmethodDemand:MarketEvolut

ionChangeistheonlyconstant.(byunknown)Newneeds,competitors,technology,channels,andotherfactorsalways

affectmarkets.Thissituationinturncausemarketstoevolve.Thefourstepprocessofmarketevolution:•Emergence•Growth•Maturity•Decline