Market and demand analysis

1. Situational Analysis

3.  collection of methods that managers use to
analyze an organization's internal and external
environment to understand the organization's
capabilities, customers, and business
environment

4.  It clearly identifies a business's capabilities,
customers, potential customers and business
environment, and their impact on the company. A
situation analysis is an essential part of any
business plan and should be reviewed
periodically to ensure that it is current.

5.  Various techniques utilized in the evaluation of
the micro and macro environments of the firm to
understand all the factors affecting the company
in the two settings.
 These factors include customers and competitors.

6.  Situational analysis can also be defined as
systematic collection and assessment of past and
present data of factors that affect the firm.

7. Methods
 5 C’s
 SWOT
 Porter Five forces model

8. 5 C’s
 Company
 assessment of the vision and mission of the
organization
 Customers
 Competitors
 Collaborators
 Climate/Context

10. Example
 To develop multi grain flour based on a new
principle that appears to offer several advantages
over the ordinary wheat flour. The chief executive
of the firm needs information about where and
how to market the multigrain flour.

11.  Who are the buyers ?
 What is the total current demand for ordinary wheat flour?
 How is the demand distributed temporally (pattern of sales
over the year) and geographically?
 What is the break – up of demand for multigrain flour of
different proportions?
 What price will the customers be willing to pay for the
multigrain flour?
 How can potential customers be convinced about the
superiority of the multigrain flour?
 What price will ensure its acceptance?
 What channels of distribution are most suited for the
multigrain flour? What trade margins will induce
distributors to carry it?
 What are the prospects of immediate sales?

13.  Suppose that a small but technologically
competent firm has developed an improved air
cooler based on a new principle.
 Objectives of market and demand analysis to
answer the following question:-

14.  Who are the buyers of air cooler?
 What is the total current demand for air coolers?
 What price will the customer be willing to pay for
the improved cooler?
 What price and warranty will ensure its
acceptance?
 What are the prospects of immediate sales?

15. Importance of Situational
Analysis
 Enables the firm to know its strengths and
weaknesses.
 Enables the firm to determine how the
stakeholders view it with regards to its operation
 Situational analysis makes it possible for the
business to identify opportunities arising thus
leading to sustainable profitability and competitive
advantage.
 It is a significant step in the planning process to
enable the firm select strategies that will enable it
achieve its objectives.

18. Conduct of Market Survey

20. Characteristics of Market
 Effective demand in the past and present
 Breakdown of demand
 Price
 Methods of distribution and sales promotion
 Consumers
 Supply and competition
 Government Policy

21. Effective Demand in the Past and
Present
 Consumption=Production +Imports-Exports-
Changes in stock level

22. Breakdown of demand
 Nature of Product
 Consumer groups
 Geographical Division

23. Price
 Free on Board price
 CIF price
 Landed price for imported goods
 Average wholesale price
 Average retail price

24. Demand Forecasting
 Methods
 Qualitative methods
 Time series Projection methods
 Causal Methods

25. Qualitative Methods
 Jury of Executive Opinions
 Delphi method