Market Research Sales Forecasting What is Market Research

Market Research & Sales Forecasting

What is Market Research? • Simply a matter of finding out as much as you can before committing yourself to an irretrievable step • When you do not have answers through your own Market Information and Intelligence System

What to find out? • What does the customer need? • Who is the target audience and how much can you find out about them? • What is the competition? • Are there any gaps in the market? • Would the product be acceptable in the market?

Do I need Market Research? • Yes. Provided I know what I want.

The MR Process • • What is the Marketing Problem? What is the Research Problem? Developing the Research Plan Research Approach Research Instruments Collecting the Information Analysing the information Presentation of findings

Data sources • • Reference Library Directories of Products/Companies The Bombay Stock Exchange Industry/Trade Journals Trade fairs and Exhibitions Company Annual Reports Internet

Testing Product Acceptability • If your product is a knock - down kit , give it to the factory peon to assemble it. • Post the item back to yourself and assess the damage the transporter does to it. • Try various types of packaging and choose a suitable cost effective option. • Try a number of product names and determine which is more acceptable.

Sales Forecasting - Why is it necessary? • To raise the necessary cash for investment and operations • to establish capacity and output levels • to acquire and stock the right amount of supplies • to hire the required number of people

Market • A set of all actual and potential buyers of a product or service

Potential Market • A set of consumers who profess a sufficient level of interest in a product or service

Available Market • A set of consumers who have interest , income and access to a particular product or service

Qualified Available Market • A set of consumers who have interest, income, access and qualifications for the particular product or service

Target Market • Part of the qualified available market the company decides to pursue

Penetrated Market • A set of consumers who are buying the company’s product or service

Market Demand • Total volume that would be bought by a defined • • • customer group geographical area time period marketing environment marketing programme

Market Potential • Boom period • Recession

Market Minimum • The market potential of the product with minimum marketing effort of the industry

Sensitivity of Demand • Market Potential - Market Minimum

Market Forecast • Market demand corresponding to the industry marketing expenditure • This would be lower than the market potential

Company Demand • Estimated share of market demand at alternative levels of company marketing effort in a given time period

Company Sales Forecast • Expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

Sales Target • Sales goal for a product line, company division or a sales rep. It is a benchmark to evaluate achievements against goals set.

Sales Budget • Conservative estimate of the expected volume of sales and is used for purchasing. production and cash flow decisions

Estimating Market Potential • • • Chain - ratio method Demand for Complan = Population * per capita discretionary income * % discretionary income on food * % spent on beverages * % spent on health beverages * % spent on white health beverages * % spent on Complan

Other methods • Market built - up method • Industry sales and market shares

Estimating Future Demand • • • Survey of buyer’s intentions Composite of sales force opinions Expert opinion Past sales analysis Market test method