Marketing Research Bangor Transfer Abroad Programme Sales forecasts Can be based on three types of information: (1) What customers say about their intentions.

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Presentation transcript:

Marketing Research Bangor Transfer Abroad Programme Sales forecasts Can be based on three types of information: (1) What customers say about their intentions to continue buying products in the industry (2) What customers are actually doing in the market (3) What customers have done in the past in the market

Marketing Research Bangor Transfer Abroad Programme Two Types of Forecast Macro forecasting: concerned with forecasting markets in total. About determining the existing level of Market Demand and considering what will happen to market demand in the future. Micro forecasting: concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future

Marketing Research Bangor Transfer Abroad Programme Stages in Sales Forecasting First stage : Estimate Market Demand. “Market Demand for a product is the total volume that would be bought by a defined customer group, in a defined geographical area, in a defined time period, in a given marketing environment. This is sometimes referred to as the Market Demand Curve.” (Baker MJ, 1991)

Marketing Research Bangor Transfer Abroad Programme Existing market demand As a starting point for estimating market demand, a company needs to know the actual industry sales taking place in the market. This involves identifying its competitors and estimating their sales.

Marketing Research Bangor Transfer Abroad Programme Stage Two Estimate Company Demand Company demand is the company’s share of market demand. This can be expressed as a formula: Company Demand = Market Demand x Company’s Market Share

Marketing Research Bangor Transfer Abroad Programme Obtaining information on existing market demand As a starting point for estimating market demand, a company needs to know the actual industry sales taking place in the market. This involves identifying its competitors and estimating their sales.

Marketing Research Bangor Transfer Abroad Programme Example For example, consider the UK Overseas Mass Market Package Holiday Industry. What is Market Demand? Market demand can be defined as:

Marketing Research Bangor Transfer Abroad Programme Example Defined Customer Group: Customers Who Buy an Air-Inclusive Package Holiday Defined Geographical Area: Customers in the UK Defined Time Period: A calendar year Defined Marketing Environment: Strong consumer spending in the UK but overseas holidays affected by concerns over international terrorism

Marketing Research Bangor Transfer Abroad Programme Example Recent data for the UK Overseas Mass Market Package Holiday market suggests that market demand can be calculated as follows: Number of Customers in the UK: 17.5 million per calendar year Average Selling Price per Holiday: £450 Estimate of market demand: £7.9 billion (customers x average price)

Marketing Research Bangor Transfer Abroad Programme Example The company demand for First Choice Holidays in this market can be calculated as follows: First Choice Holidays Demand = £7.9 billion x 15% Market Share = £1.2 billion

Marketing Research Bangor Transfer Abroad Programme This is an important piece of analysis. For example, Company A has sales that are rising at 10% per year. However, it finds out that overall industry sales are rising by 15% per year. This must mean that Company A is losing market share – its relative standing in the industry

Marketing Research Bangor Transfer Abroad Programme Stage Three Develop the Sales Forecast The Sales Forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.