Market demand analysis helps companies understand consumer demand for products and services. This allows management to determine if they can successfully enter a market and generate profits. The first step is identifying the target market through surveys. Companies also assess what stage the business cycle is in - emerging, plateau, or declining. They develop products that meet specific consumer needs. Competition levels are analyzed to determine potential market share and profits.

1. BY,
MATHEW V JOSEPH
MBA
MARIAN COLLEGE,KUTTIKANAN
KERALA

2. Companies use market demand analysis to
understand how much consumer demand
exists for a product or service. This analysis
helps management determine if they can
successfully enter a market and generate
enough profits to advance their business
operations.

3. • Market identification
• Business cycle
• product needs
• growth potential
• competition

4. The first step of market analysis is to define and
identify the specific market to target with new
products or services. Companies will use market
surveys or consumer feedback to determine their
satisfaction with current products and services.
Comments indicating dissatisfaction will lead
businesses to develop new products or services to
meet this consumer demand.

5. Once a potential market is identified, companies
will assess what stage of the business cycle the
market is in. Three stages exist in the business
cycle: emerging, plateau and declining.
• Markets in the emerging stage indicate higher consumer
demand and low supply of current products or services.
• The plateau stage is the break-even level of the market,
where the supply of goods meets current market
demand.
• Declining stages indicate lagging consumer demand for
the goods or services supplied by businesses.

6. Once markets and business cycles are
reviewed, companies will develop a product
that meets a specific niche in the market.
Products must be differentiated from others
in the market so they meet a specific need
of consumer demand, creating higher
demand for their product or service.

7. While every market has an initial level of consumer
demand, specialized products or goods can create
a sense of usefulness, which will increase
demand.
Examples of specialized products are iPods or
iPhones, which entered the personal electronics
market and increased demand through their
perceived usefulness by consumers.

8. An important factor of market analysis is
determining the number of competitors and
their current market share. Markets in the
emerging stage of the business cycle tend to
have fewer competitors, meaning a higher
profit margin may be earned by companies.

9. • Situational analysis
• Collection of secondary information
• Conduct of market survey
• Characterization of the Market
• Demand forecasting
• Formulation of the Market Plan

10. In order to get a feel of the relationship between the
product and its market, the project analyst may informally
talk to customers’ competitors, middlemen and other in the
industry.
• Who are buyers of the new product/service?
• What is the current demand for the new product/service?
• How is demand distributed geographically?
• What is the breakup of demand for the new
product/service of different sizes?

11. General sources of secondary information:
• National Census
• National sample survey reports
• Plan reports
• statistical abstract of national union
• Statistical year book
• Economic survey
• Guidelines to industries
• Annual survey of industries
• Annual reports of the Department of commerce and
industry.

12. • Demand in different segments of market
• Income and price elasticity’s of demand
• Motives for buying
• Purchasing plans and intentions
• Socioeconomic characteristics of buyers
• Unsatisfied needs
• Attitudes toward various products
• Distributive trade practices and preferences
• Satisfaction with existing products

13. Based on the information gathered from secondary sources
and through the market survey, the market for the product
or service to be offered may be described in terms of the
following:
• Effective demand on the past and present
• Breakdown of demand
• Price
• Methods of distribution and sales promotion
• Consumers
• Supply of competition
• Government Policy

14. After gathering information about various aspects of the
market and demand from primary and secondary sources.
An attempt may be made to estimate future demand. These
may classified in three categories as shown
• Qualitative Methods
• Time series projection Methods
• Causal Methods
• Jury of executive opinion Method
• Chain ratio Method
• Consumption level Method

15. Current marketing situation
• Where is your organisation now?
• Who are your customer groups? What are their needs and
requirements? How large and diverse are they?
• What kinds of products and services do you currently provide?
Opportunity and issue analysis (S.W.O.T. analysis).
This identifies key issues and opportunities for your
organisation and it comprises an analysis of your internal
operations
• Strengths
• Weaknesses
• Opportunities
• Threats

16. Objectives. Having identified the key issues affecting
your organisation These guide the development of
strategies and action plans.
• Objectives should meet certain criteria e.g. financial,
and marketing which will be customer focused.
Marketing strategy. This is the game plan that needs to
be implemented to achieve the objective
• Whom are you now targeting?
• What do you want your position to be in terms of new
product/service delivery?
• Do you want to change your organisation profile and
will you need to rebrand your organisation?

17. Action program. This describes:
• What will be done
• When will it be done?
• Who will do it?
• How much will it cost?
Budget and controls.
• The Budget is essentially a cash flow
statement and profit/loss statement to support
the marketing plan