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DemandForecastingandMeasurementDemandMeasuringandforecastingmarketdemandisprobablythefirstmajortaskofamarketer.

Neededinformationformarketopportunities:•Size•Growth•ProfitpotentialSalesforecastsarebasedonestimatesofdema

nd.Demand:MarketsWaystoclassifymarkets:•Potentialmarket:setofconsumerswhopossessasufficientlevelofinterestin

aproductorservice.•Availablemarket:setofconsumerswhohaveinterest,income,andaccesstoaproductorservice.•Targetmarket:p

artofthequalifiedavailablemarketacompanydecidestopursue.•Penetratedmarket:setofconsumerswhoarebuyingthecompany’sproductorservice.Demand:M

easurementKeyTerms:Marketdemand:thetotalvolumethatwouldbeboughtbyadefinedcustomergroupinadefinedgeogra

phicalareainadefinedtimeperiodinadefinedmarketingenvironmentunderadefinedmarketingprogram.Marketdemandisnotafixednumber,butafun

ctionofthestatedconditions.Marketforecast:marketdemandestimatewhenusingaspecifiedmarketingeffort.Marketpotential:thelimitapproachedbym

arketdemandasmarketingeffortsapproachinfinityforagivenmarketingenvironment.Demand:MeasurementCompanydemandandSalesforecastsCompanyde

mandisthecompany’sestimatedshareofmarketdemandatalternativelevelsofcompanymarketingeffortinagiventimeper

iod.Companysalesforecastistheexpectedlevelofcompanysalesbasedonachosenmarketingplanandanassumedmarketingenvironment.Companysalespote

ntialisthesalelimitapproachedbythecompanydemandascompanymarketingeffortincreaserelativetocompetitors.Demand:EstimatingCurrentDemandI

mportantAreasofFocus:TotalMarketPotential(TMP):themaximumnumberofsalesthatmightbeavailabletoallfirmsinanindustryduringagivenperiod,unde

ragivenlevelofindustrymarketingeffort,andenvironmentalconditions.AreaMarketPotential(AMP):thedefinitionist

hesameas“TotalMarketPotential”,exceptareaorregionisconsidered.Demand:EstimatingCurrentDemandMethodsUsedtocreateestimate

sTMP:potentialnumberofbuyersxtheaveragequantitypurchasedbyabuyerxprice(mostcommonmethodused)AMP:•MarketBuild-UpM

ethod(B2B)•MultipleFactorIndexMethod(B2C)•BrandDevelopmentIndexDemand:EstimatingCurrentDemandMarketBuild-UpMethod:identifyal

lpotentialbuyersandestimatetheirpotentialpurchases.MultipleFactorIndexMethod:identifyallpotentialfactorsthatcou

ldcreatesales,assignaweightmeasuretoeach,thencreateafunction/model.Oneproblemisthatweightassignmentsduetotheirarbitrarynaturecouldcauseinac

curatetotalestimates.Demand:EstimatingCurrentDemandBrandDevelopmentIndex:index/comparisonofbrandsalestoproductcategorysalesApplication

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

customers,achancetoreinforcecustomerloyaltyispresentormoreeasilycaptureagreatermarketshare)Lastly,knowingact

ualindustrysalesisimportant:identifyingcompetitorsandestimatesoftheirsales.Thisinformationcanindicateactualmarketsize.Dema

nd:EstimatingFutureDemandEstimatingfuturedemandiscalledforecasting,theartofanticipatingwhatbuyersarelikelytodounderagivensetofconditions.Them

oreunstablethedemand,themorecriticalisforecastingaccuracyandthemoreelaboratetheforecastingmethodology.Demand:Fore

castingMostcompaniesfollowathreestepprocesswhendevelopingasalesforecast.•Macroeconomicforecast•Industryforecas

t•CompanysalesforecastDemand:ForecastingMethodsforsalesforecasting:•Surveyofbuyers’intentions•Compositeofsalesforceopinions•Expertopinions

•PastSalesanalysis•MarkettestmethodDemand:MarketEvolutionChangeistheonlyconstant.(byunknown)Newneeds,competitors,technology,channels,andotherfactors

alwaysaffectmarkets.Thissituationinturncausemarketstoevolve.Thefourstepprocessofmarketevolution:•Emergence•Growth•

Maturity•Decline