Forecasting and Demand Measurement
The total market demand for a product or service is the total volume that would
be bought by a deﬁned consumer group in a deﬁned geographic area in a deﬁned
time period in a deﬁned marketing environment under a deﬁned level and mix of
industry marketing effort.
Measuring Market Demand
- Total market demand
- Area market demand
- Actual sales and market shares
Q = total market demand
n = number of buyers in the market
q = quantity purchased by an average buyer per year
p = price of an average unit
Market Build-up Method
- Identification of all the potential buyers in every market and estimate the potential purchases.
- Mining instruments that test the actual proportion of gold content in gold-bearing ores.
- Price of instrument $1,000. The company wants to determine the market potential.
- To estimate the market potential the manufacturer can consult the Standard Industrial Classification (SIC).
Market Factor Index Method
- Identifies market factors that correlate with market potential and combines them into weighted index.