Estimating Demand Forecasting Sales SWOT Analysis

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Estimating Demand/Forecasting SalesSWOT
Analysis
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Estimating Demand

• Market Demand for a product is the total volume
  (in units or dollars) that would be bought by
• A defined customer group in a
• Defined geographical area in a
• Defined time period in a
• Defined marketing environment under a
• Defined marketing program

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Estimating Demand

• Company Demand is the companys estimated share
  of market demand at alternative levels of company
  marketing effort in a given time period.

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Estimating Demand

• Chain Ratio Method. Multiplying a base number
  (such as total population) by several adjusting
  percentages.
• Estimating Demand for baby monitors in China,
  India
• China India
• Base Number
• Total Population - 1,207.4 921.5 A
• Urbanization Rate 30.3 26.8 B
• Urban Population 365.8 247.0 C A x B
• Birth Rates per 000s 17.8 28.4 D
• Market Potential 6.5 million 7.0 E C x
  D

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Market Buildup Method

• Break a market into its component parts, estimate
  purchases or sales from each part, then sum them
• BASED ON BUYERS
• Identify all potential buyers in each market
• Estimate potential purchases for each buyer
• Sum the potential purchases for each buyer
• BASED ON SELLERS
• Identify all salespeople
• Estimate sales for each salesperson
• Sum the potential sales for each salesperson

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Survey of Buyers Intentions

• Survey a sample of the target market.
• Give the survey respondents a very clear
  description of the product or service you intend
  to sell, including price, etc.
• Ask questions like the following
• Do you intend to buy an automobile within the
  next six months?
• 0.00 0.20 0.40 0.60 0.80
  1.00
• No Slight Fair Good
  High Certain
• Chance possibility possibility
  possibility probability
• Multiply the average probability by the total
  population in the market by the percentage of the
  population that you surveyed.

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Other Methods

• Composite of Sales Force Opinions
• Jury of Expert Opinion
• Simple Trend Analysis (Extrapolating past sales
  into the future) (in IBC company cases, you will
  have to somehow determine past sales of
  competitors, or previous similar IBC companies)
• Test-market method.
• Detailed statistical analysis based on educated
  assumptions on a wide variety of variables.

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Characteristics of Good Forecasts

• A clear statement of purpose.
• Clear assumptions
• A time horizon
• Attention to discontinuities.
• Adequate accounting for social and technological
  forces
• Consider at least three scenarios
• Best conditions scenario
• Worst conditions scenario
• Most probable