This document discusses major concepts in demand measurement including different levels and methods of estimating demand. It describes market demand as the total volume of a product in a defined customer group, geographical area, time period, and marketing environment. Company demand is estimated based on a company's expected market share at different marketing expenditure levels. Methods of estimating current market demand include calculating total market potential, area market potential, and company market share. Future demand can be estimated through executive judgement, surveys of buyer intentions or expert opinions, market tests, and analysis of past sales data.

1. Major Concepts in Demand
Measurement
Dr. Gopal Thapa
Member Secretary
Marketing Subject Standing Committee
Tribhuvan University

2. Market
 Potential market
 Available market
 Target/ served market
 Penetrated market
08/10/17 Copy right reserved 2

3. Levels of Demand Measurement
 Market Demand
 Company Demand
08/10/17 Copy right reserved 3

4. Market Demand
 Market demand is the total volume of product in
a :
 Defined customer group
 Defined geographical area
 Defined time period
 Defined marketing environment
 Defined marketing programme
08/10/17 Copy right reserved 4

5. Company Demand
 Estimated share of market demand that a company
could expect to achieve at alternative levels of
marketing expenditure in a defined time period
 Effected by marketing mix
 Based on sales forecasting
 Based on chosen marketing expenditure plan

6. Methods of Estimating Current
Market Demand
 Total market potential
 Area market potential
 Company Market Share

7. Total market potential
Total market potential
= Potential buyer × Average quantity per
buyer × price

8. Area Market Potential
 Market Build up method
 Market Factor method

9. Market Build-up Method
 Area Market Potential
= Potential buyers × Potential purchase per buyer

10. Market Factor method
 Suppose, Kathmandu Valley has 10% of Nepal’s
population, 25% of Nepal’s disposable income
and 50% of Nepal’s book sales.
 Weight given to different factors are;
 0.2for population size
 0.5 for disposable income
 0.3 for retail sales
Area market potential = (0.2×10)+(0.5×25)+(0.3×50)
= 2+12.5+15
= 29.5%
Thus, area market potential in Kathmandu is 29.5%
of Nepal’s total book sales

11. Company Market Share
 Company Market Share
= Company sales × 100
Industry sales

12. Methods of Estimating Future
Demand
 Executive Judgement
 Survey
Survey of Buyer’s intention
Composite of sales force opinion
Survey of Expert opinion
Market test method
Past sales analysis: Time series, statistical demand
analysis, econometrics

13. ?????????????????????
??????????????
??????????????
??????????????
08/10/17 Copy right reserved 13