4. Some definitions…
Market Demand: Total volume bought by the target market.
Market Forecast: The market demand corresponding to the level of industry
marketing expenditure.
Market Potential: Limit reached by market demand as industry marketing
expenditure reaches infinity.
5. And some more..
Company Demand: Company’s estimated share of market demand.
Company sales forecast: Expected level of company sales based on chosen
marketing plan.
Company sales potential: Sales Limit approached as the company marketing
effort increases relative to that of competitors.
6. Estimating current market demand
Total Market Potential
Total market potential =
potential number
of buyers X
Avg. quantity
purchased X The price
7. Estimating current market demand
Area Market Potential
Area market potential
The Market Build-up method:
=
total number of
buyers X
estimated quantity
purchased by each
buyer
8. Estimating current market demand
Area Market Potential
Multiple factor index method:
“An index may be a function of population,per capita
income ,number of professionals et al. and is determined
using past sales”.
