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