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Demand Analysis

The document discusses market analysis and demand forecasting. It describes estimating market size and demand, understanding the business cycle stage of a market, identifying product niches, and assessing competition. The goals are to help businesses determine if they can enter a market successfully and generate profits. Demand forecasting methods are described along with challenges in forecasting due to data limitations and inability to predict environmental changes.

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Hazel Marie Ignacio Peralta
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52 views15 pages

Demand Analysis

The document discusses market analysis and demand forecasting. It describes estimating market size and demand, understanding the business cycle stage of a market, identifying product niches, and assessing competition. The goals are to help businesses determine if they can enter a market successfully and generate profits. Demand forecasting methods are described along with challenges in forecasting due to data limitations and inability to predict environmental changes.

Uploaded by

Hazel Marie Ignacio Peralta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Wk 2 – April 29

 Estimating the potential size of the market


for the product proposed to be
manufactured and get an idea about the
market share that is likely to be captured
 understanding how much consumer
demand exists for a product or service.
 Helps management determine if they can
successfully enter a market and generate
enough profits to advance their business
operations.
 Situational analysis and specification of
objectives
 Collection of secondary information
 Conduct of market survey
 Characterization of the Market
 Demand Forecasting
 Formulation of the Market Plan
 Market identification
 Business cycle
 Product niche
 Growth Potential
 Competition
 Define and identify the specific market to
target with new products or services.
 Market surveys or consumer feedback to
determine their satisfaction with current
products and services.
 Comments indicating dissatisfaction will
lead businesses to develop new products
or services to meet this consumer demand.
 Current product line vs business expansion
possibilities.
Assessment what stage of the business cycle the
market is in.

 Three stages exist in the business cycle:


 Emerging - indicate higher consumer demand
and low supply of current products or services
 Plateau - the break-even level of the market,
where the supply of goods meets current
market demand
 Declining - indicate lagging consumer demand
for the goods or services supplied by
businesses.
 Development of product that meets a specific
niche in the market.
 Products must be differentiated from others in
the market so they meet a specific need of
consumer demand
 Conducting tests in sample markets to determine
which of their potential product styles is most
preferred by consumers.
 Develop of goods and services so that
competitors cannot easily duplicate their
product.
 Products or goods specialization can create a sense
of usefulness, which will increase demand.
 Examples of specialized products are iPods or
iPhones, which entered the personal electronics
market and increased demand through their
perceived usefulness by consumers.
 Type of demand which quickly increases the
demand for current markets, allowing companies
to increase profits through new consumer demand
 Factor of market analysis which determine the number of
competitors and their current market share.
 Markets in the emerging stage of the business cycle
tend to have fewer competitors, meaning a higher
profit margin may be earned by companies.
 Once a market becomes saturated with competing
companies and products, fewer profits are achieved
and companies will begin to lose money.
 As markets enter the declining business cycle,
companies will conduct a new market analysis to find
more profitable markets
 An attempt made to estimate future
demand.
 Categories of Demand Forecasting
 Qualitative Methods
 Time series projection Methods
 Causal Methods
 Jury of executive opinion Method
 Chain ratio Method
 Consumption level Method
Demand forecasts are subject to error and
uncertainty which from three principal
source:
1. Data about past and present market.

2. Method of forecasting

3. Environmental Change
 The analysis of past and present
markets serves as the springboard for
the projection exercise
 Lack of Standardization

 Few observations

 Influence of abnormal factors


 Methods used for demand forecasting
are characterized by the following
limitations:
 Inability to handle unquantifiable factors
 Unrealistic assumptions
 Exercise data requirement
 Technological Change
 Shift in Government Policy
 Development on the International
Scene
 Discovery of New Sources of Raw
Material
 Predictability of the Weather
THANK YOU

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