Market demand is the total demand for a product from all consumers in the market at a given time. It is calculated by summing the individual demands from each consumer. Individual demand refers to the quantity demanded by a single consumer at different price levels. A demand curve can graphically show the relationship between price and quantity demanded in the market. Forecasting market demand involves determining the factors that influence demand, collecting relevant historical sales data, and using statistical techniques to predict future demand levels over different time periods. The objective, time horizon, data collection methods, and demand forecasting techniques should all be considered when developing a market demand forecast.

1. Market Demand
Submitted By: Nitish
Sadotra

2. Contents
• Demand
• Individual Demand
• Market Demand
• Demand Curve
• Forecasting Market Demand

3. Demand
 Demands are wants for specific products backed by an ability to pay.
 Demand is the quantity of a good or service that consumers and businesses are
willing and able to buy at a given price in a given time period.
 It is important to measure not only how many people want our product, but also
how many are willing and able to buy it.

4. Individual Demand
 Individual demand refers to the quantity of a
commodity demanded by an individual per unit
of time, at a given price.
 The individual demand is the demand of one
individual or firm. It represents the quantity of
a good that a single consumer would buy at a
specific price at a specific point of time.

5. Market demand
 Market demand is the sum of the individual demand for a product
from buyers in the market.
 If more buyers enter the market and they have the ability to pay
for items on sale, then market demand at each price level will
rise.

6. Demand Curve Or Demand Data
 Practically, the level of market demand at a range of prices can be shown
graphically as a demand curve.
 Demand Curve is certainly useful for a business to be able to forecast what
happens to potential demand from a change in price.
 Demand data is a chart or group table which gives out the total demand in the
market at a certain period of time.

7. Suppose, there are three consumers (P,
Q, R) of commodity A, and their
monthly demand schedules are :
The table shows individual demands of the three consumers at different prices of
commodity A. The last column shows the market demand (sum of individual demands).
Price of A
(Rs.)
Quantity
Demanded by P
Quantity
Demanded by Q
Quantity
Demanded by R
Market
Demand
30 0 0 0 0
25 5 0 0 5
20 10 5 0 15
15 15 10 5 30
10 20 15 10 45
5 25 20 15 60

8. Forecasting Market Demand
 A demand forecast is the prediction of what will happen to your company's existing
product sales. It would be best to determine the demand forecast using a multi-
functional approach. The inputs from sales and marketing, finance, and production
should be considered.
 Demand forecasting is the art and science of forecasting customer demand to drive
holistic execution of such demand by business management.
 Demand forecasting involves techniques including both informal methods, such as
educated guesses, and quantitative methods, such as the use of historical sales data
and statistical techniques.

9. Steps in any total-market forecast
 Specifying the Objective: The objective for which the demand
forecasting is to be done must be clearly specified. The objective may be
defined in terms of; long-term or short-term demand, the whole or only the
segment of a market for a firm’s product.
 Determining the Time Perspective: On the basis of the objective set, the
demand forecast can either be for a short-period, say for the next 2-3 year or
a long period. While forecasting demand for a short period (2-3 years), many
determinants of demand can be assumed to remain constant or do not change
significantly. While in the long run, the determinants of demand may change
significantly

10.  Making a Choice of Method for Demand Forecasting: Once the objective is
set and the time perspective has been specified the method for performing the
forecast is selected. There are several methods of demand forecasting falling
under two categories; survey methods and statistical methods.
 Collection of Data and Data Adjustment: Once the method is decided upon,
the next step is to collect the required data either primary or secondary or both.
The primary data are the first-hand data which has never been collected before.
While the secondary data are the data already available.
 Estimation and Interpretation of Results: Once the required data are collected
and the demand forecasting method is finalized, the final step is to estimate the
demand for the predefined years of the period. Usually, the estimates appear in
the form of equations, and the result is interpreted and presented in the easy and
usable form.