Session 7 MG 220 BBA - 30 Aug 10

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Session 7
MG 220 Marketing Management
BBA Section C

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Session 7 MG 220 BBA - 30 Aug 10

  1. 1. Part 2: Capturing Market Insights<br />> Forecasting and Demand Measurement<br />> Review of Part 2<br />Class Presentation | Session 7 | 30 Aug 2010<br />
  2. 2. Forecasting and Demand Measurement<br />One of the major objectives of Marketing research<br />Marketing’s tasks to identify opportunities and also give measured forecasts<br />MG 220 Marketing Management<br />2<br />
  3. 3. Forecasting and Demand MeasurementThe Measures of Market Demand<br />90 types of Demand<br />MG 220 Marketing Management<br />3<br />
  4. 4. Forecasting and Demand MeasurementThe Measures of Market Demand<br />Different ways of looking at “market”<br />Potential Market<br />Set of consumers who profess a sufficient level of interest in a market offer (able to buy?)<br />Available Market<br />Set of consumers who have interest, income and access to a particular offer. (Qualified Available Market => Eligible or allowed)<br />Target Market<br />Part of Qualified Available market, the company decides to pursue (most attractive segment)<br />Penetrated Market<br />Set of consumers who are buying the company’s products<br />MG 220 Marketing Management<br />4<br />
  5. 5. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />For a product is the total volume that would be bought:<br /> - by a defined customer group<br /> - in a defined geographical area<br /> - in a defined time period<br /> - in a defined marketing environment<br /> - under a defined marketing program<br />It is not a number but a function (correlation) of stated conditions<br />MG 220 Marketing Management<br />5<br />
  6. 6. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<br />6<br />
  7. 7. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />MG 220 Marketing Management<br />7<br />
  8. 8. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Demand:<br />Market Minimum<br />Market Potential<br />Marketing Sensitivity of Demand (Demand’s reaction to marketing effort)<br />Expansible market (demand reacts highly to marketing)<br />Non-expansible market (demand reacts less to marketing)<br />Market Penetration Index (current level of market demand to potential demand)<br />Share Penetration Index (current level of market to its potential market share)<br />MG 220 Marketing Management<br />8<br />
  9. 9. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Forecast:<br />Only one level of expenditure is possible (or practically done)<br />Market demand corresponding to that level is Market Forecast<br />MG 220 Marketing Management<br />9<br />
  10. 10. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Market Potential:<br />Market forecast shows demand at a limited level only<br />Market Potential is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.<br />Market Demand with maximum possible marketing expenditure<br />MG 220 Marketing Management<br />10<br />
  11. 11. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Demand:<br />Company’s estimated share of market demand at alternative levels of company marketing effort in a given time period<br />Relating demand to competitors, company’s image etc.<br />MG 220 Marketing Management<br />11<br />
  12. 12. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Forecast:<br />After understanding company demand,<br />Choose a level of marketing effort<br />Company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.<br />Based on this:<br />Sales Quota is the sales goal set for a product line, company division. Assigned to: stimulate sales effortsGenerally higher than Sales Forecast<br />Sales Budget is conservative estimate of expected volume of sales and is used for internal decisions like purchasing, cash flow etc.Generally lower than Sales Forecast<br />MG 220 Marketing Management<br />12<br />
  13. 13. Forecasting and Demand MeasurementVocabulary for Demand Measurement<br />Company Sales Potential:<br />Company sales potential is the sales limit approached by company demand as company marketing effort increases relative to that of competitors<br />MG 220 Marketing Management<br />13<br />
  14. 14. Forecasting and Demand MeasurementEstimating Current Demand<br />Total Market Potential<br />Estimate: Potential number of buyers X average quantity purchase by a buyer X price<br />Area Market Potential<br />Problem of selecting best territories and allocating marketing budgets<br />Industry Sales and Market Shares<br />Identifying industry and competitors’ sales figures<br />MG 220 Marketing Management<br />14<br />
  15. 15. Forecasting and Demand MeasurementEstimating Future Demand<br />Three-stage procedure<br />Macroeconomic forecast<br />Industry forecast (based on Sr. 1)<br />Company sales forecast (based on Sr. 2)<br />How to? And information Bases<br />What People Say<br />Survey Consumers<br />Salesforce opinions<br />Experts’ (distributors, retailers, consultants) opinions<br />What People Have Done<br />Past-Sales Analysis<br />What People Do<br />Test-Marketing<br />MG 220 Marketing Management<br />15<br />
  16. 16. Part 3: Connecting with Customers<br />> Intro to Part 3<br />Class Presentation | Session 7 | 30 Aug 2010<br />
  17. 17. Part 3: Connecting with CustomersAn intro and overview<br />Chap 5: Creating Customer Value, Satisfaction, and Loyalty<br />Chap 6: Analyzing Consumer Markets<br />Chap 7: Analyzing Business Markets<br />Chap 8: Identifying Market Segments and Targets<br />MG 220 Marketing Management<br />17<br />
  18. 18. Part 3: Connecting with Customers<br />> Building Customer Value, Satisfaction and Loyalty<br />> Maximizing Customer Lifetime Value<br />> Cultivating Customer Relationships<br />> Customer Databases and Database Marketing<br />Class Presentation | Session 8 | 1 Sep 2010<br />

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