Marketing

Chapter 5

Aspects
 Introduction
ARSENIA T. FLORENTINO
• Graduated Bachelor of Science in Commerce, Major
in Management at Central Philippine University, Iloilo
• Resides at Brgy. Rizal, Oton, Iloilo

WORK BACKGROUND
• Bookkeeper - Philippine Science High School – MPC
(Iloilo)
• Bookkeeper - Kooperatiba at Samahan sa PPA - Iloilo
• Cashier - Philippine Ports Authority , Iloilo
• Terminal Operations Officer – Philippine Ports
Authority , Iloilo
• Terminal Operations Officer/Special Collecting Officer
– PPA, TMO Antique
• Officer-In-Charge - Philippine Ports Authority (Lipata
& Libertad Port, Antique
•
Outline:
● INTRODUCTION
● MARKETING ASPECTS IN PROJECT MANAGEMENT
● DEFINITION OF MARKET AND GENERAL MARKET DESCRIPTION
● DEMAND ANALYSIS
● PROJECT DEMAND
● SUMMARY
● CONCLUSION
Definition of Market and General
Market Description
● In its usual context, "market" refers to an arena for potential exchanges that may
involve money. Here, the term is used in its broadest sense where demand-and-supply
conditions for goods or services are taken into account, whether or not such goods or
services carry a market selling price. The definition is important because many
necessary goods and services produced by public projects are not sold in the market
and therefore have no market price.
Examples are social and economic services;
1. Primary Health Care.
2. Education.
3. Extension Services.
4. Transport Infrastructure
5. Research.
6. Public services like Peace and
Order.
7. Fire Fighting and Prevention
8. Sanitation.
Demand Analysis
● Demand analysis involves the estimation of market demand for the output/s of the proposed
project. Essentially, it involves: (1) identification and analysis of demand determinants; (2)
estimation of past and present demand; and (3) projection of future demand.

1. identification and analysis of demand determinants;

2. estimation of past and present demand; and
3. projection of future demand.
Demand Analysis
1. Identification and analysis of demand determinants;
• Demand determinants are used to find out the level of demand for a particular good or service. Thus, in
order to derive reasonable approximations of the total demand for the good or service to be generated by the
project, the principal determinants of demand should be identified.

Among the more important demand determinants are:

(a) population
(b) income
(c) prices;
(d) substitution possibilities
(e) changes in users' taste;
(f) rate of investments; and
(g) government policies and budget
Demand Analysis
CONSUMER
DEMAND

PRODUCER
DEMAND

DEMAND FOR SOCIAL SERVICES

2. Estimating Past and Present
• Once the indicators/factors of demand for the project's output have been identified, the past
and present behavior of these determinants are examined to measure the prospective need
for the project's output. Quantitative and qualitative data to be analyzed should be well-
chosen to serve this purpose.

A. SOURCE OF DATA
B. HISTORICAL DATA COVERAGE
C. TECHNIQUES FOR DEMAND ESTIMATION
 Standards or Coefficients
 Chain Ratio Method
 Market – Build-up Method
 3. Project Demand
• Since a project under study becomes operational only at some future date, estimation of its potential benefits
require projections of the current situation into the project's lifetime. Various methods are used for
estimating future demand, among which are the following: survey of people's intentions and needs
assessments; expert's opinion; time-series analysis (trend projection); statistical demand analysis, use of
planning standards (coefficients, international, or interregional data comparisons); and market (pilot
project) testing.

The following section discusses the above techniques, the qualitative considerations, accounting for uncertainty,
and additional demand generated by the project.

Survey of People's Intentions and Needs Assessment.

Experts’ Opinion Time Series Analysis Statistical Demand Analysis

Use of Planning Standard Market Testing Other Demand Consideration

Supply Analysis
● Since a project is meant to bridge the gap between the level of demand and the level of supply for the proposed
project's output, existing supply conditions should be evaluated and an estimate made of past and present levels of
supply conditions during the project's lifetime.

1. Identifying Supply Sources.

● The initial step in supply analysis is the identification of current sources (if any) of the good or service being
considered. Each source of supply is examined with respect to volume of output, capacity distribution, service area,
and other relevant characteristics.
2. Estimating Past and Present Supply.
● As in demand, it is useful to have historical estimates of supply, a knowledge of its historical trends and fluctuations
due to the influence of economic and social policies, and the technological changes on the supply determinants.

3. Projecting Supply.
● As in demand, the methodology and factors used to forecast supply should be cited. Two sets of supply projections
are made one without and the other with the project
Demand Supply Consolidation
● Having projected the levels of demand-and-supply into the project's lifetime, the demand-supply gaps (shortages or
surpluses in supply) are derived by comparing projections of demand-and-supply. It is this consolidation of
demand-and-supply projections that determines if a market exists for the project's output of goods and/or services,
and to what extent.

1. Past and Present Supply-Demand Gap

2. Future Supply-Demand Gap, Without the Project
3. Future Supply-Demand Gap, With Project
Other Major Market Considerations
● The existence of a supply-demand gap which a project proposes to overcome is usually the best
justification for considering a project'. However, there may be cases where the identification of
such gap is not necessary for a project to be feasible from the market standpoint. For instance, in
the case of marketed goods or services, a demand-supply gap may not be necessary to justify a
project as in the two cases below:

■ A good or service may still be considered for exportation despite an adequate supply
in the world market if the exporting country enjoys a comparative advantage
resulting in the product's price competitiveness.
■ A hydroelectric power plant might still be put up despite adequacy of power supply
in the project influence area because the plant offers lower power-generation costs
relative to, say, power generation using oil-fired plants.
Other Major Market Considerations
● Competitiveness of Product.
○ The competitive position of a project producing marketed goods or services can be
analyzed in terms of the price and quality of its outputs. The selling price of the project's
output should be compared with that of competing products in the market in order to
determine the extent of price competitiveness.

● Government Policies.
○ Specific policies directly affecting the industry or sector to which the project belongs
should be analyzed. In the case of marketed goods, these would include existing trade
agreements, tariff rates, quantitative import or export restrictions, and financial tax
incentives, all of which might affect the overall marketability of project's output.

● Marketing Program
○ The marketing program or plan is a basic consideration in a market study, and is often a
critical determinant of the project's success.
Summary:
Conclusion:
 Thanks!
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