This document discusses forecasting demand and connecting with customers. It covers measuring types of market demand, such as potential, available, target and penetrated markets. It also defines vocabulary like market demand, market forecast, market potential and company demand. The document discusses estimating current demand through total market potential and industry sales. It covers estimating future demand through macroeconomic forecasts, industry forecasts and company sales forecasts. Finally, it provides an introduction to connecting with customers through creating customer value, satisfaction and loyalty, analyzing consumer and business markets, and identifying market segments and targets.

1. Part 2: Capturing Market Insights > Forecasting and Demand Measurement > Review of Part 2 Class Presentation | Session 7 | 30 Aug 2010

2. Forecasting and Demand Measurement One of the major objectives of Marketing research Marketing’s tasks to identify opportunities and also give measured forecasts MG 220 Marketing Management 2

3. Forecasting and Demand MeasurementThe Measures of Market Demand 90 types of Demand MG 220 Marketing Management 3

4. Forecasting and Demand MeasurementThe Measures of Market Demand Different ways of looking at “market” Potential Market Set of consumers who profess a sufficient level of interest in a market offer (able to buy?) Available Market Set of consumers who have interest, income and access to a particular offer. (Qualified Available Market => Eligible or allowed) Target Market Part of Qualified Available market, the company decides to pursue (most attractive segment) Penetrated Market Set of consumers who are buying the company’s products MG 220 Marketing Management 4

5. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Demand: For a product is the total volume that would be bought: - by a defined customer group - in a defined geographical area - in a defined time period - in a defined marketing environment - under a defined marketing program It is not a number but a function (correlation) of stated conditions MG 220 Marketing Management 5

6. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Demand: MG 220 Marketing Management 6

7. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Demand: MG 220 Marketing Management 7

8. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Demand: Market Minimum Market Potential Marketing Sensitivity of Demand (Demand’s reaction to marketing effort) Expansible market (demand reacts highly to marketing) Non-expansible market (demand reacts less to marketing) Market Penetration Index (current level of market demand to potential demand) Share Penetration Index (current level of market to its potential market share) MG 220 Marketing Management 8

9. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Forecast: Only one level of expenditure is possible (or practically done) Market demand corresponding to that level is Market Forecast MG 220 Marketing Management 9

10. Forecasting and Demand MeasurementVocabulary for Demand Measurement Market Potential: Market forecast shows demand at a limited level only Market Potential is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment. Market Demand with maximum possible marketing expenditure MG 220 Marketing Management 10

11. Forecasting and Demand MeasurementVocabulary for Demand Measurement Company Demand: Company’s estimated share of market demand at alternative levels of company marketing effort in a given time period Relating demand to competitors, company’s image etc. MG 220 Marketing Management 11

12. Forecasting and Demand MeasurementVocabulary for Demand Measurement Company Sales Forecast: After understanding company demand, Choose a level of marketing effort Company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment. Based on this: Sales Quota is the sales goal set for a product line, company division. Assigned to: stimulate sales effortsGenerally higher than Sales Forecast 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 MG 220 Marketing Management 12

13. Forecasting and Demand MeasurementVocabulary for Demand Measurement Company Sales Potential: Company sales potential is the sales limit approached by company demand as company marketing effort increases relative to that of competitors MG 220 Marketing Management 13

14. Forecasting and Demand MeasurementEstimating Current Demand Total Market Potential Estimate: Potential number of buyers X average quantity purchase by a buyer X price Area Market Potential Problem of selecting best territories and allocating marketing budgets Industry Sales and Market Shares Identifying industry and competitors’ sales figures MG 220 Marketing Management 14

15. Forecasting and Demand MeasurementEstimating Future Demand Three-stage procedure Macroeconomic forecast Industry forecast (based on Sr. 1) Company sales forecast (based on Sr. 2) How to? And information Bases What People Say Survey Consumers Salesforce opinions Experts’ (distributors, retailers, consultants) opinions What People Have Done Past-Sales Analysis What People Do Test-Marketing MG 220 Marketing Management 15

16. Part 3: Connecting with Customers > Intro to Part 3 Class Presentation | Session 7 | 30 Aug 2010

17. Part 3: Connecting with CustomersAn intro and overview Chap 5: Creating Customer Value, Satisfaction, and Loyalty Chap 6: Analyzing Consumer Markets Chap 7: Analyzing Business Markets Chap 8: Identifying Market Segments and Targets MG 220 Marketing Management 17

18. Part 3: Connecting with Customers > Building Customer Value, Satisfaction and Loyalty > Maximizing Customer Lifetime Value > Cultivating Customer Relationships > Customer Databases and Database Marketing Class Presentation | Session 8 | 1 Sep 2010