The Market Demand

Dr. Amr Fouad

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The job of analyzing the marketplace

Market segmentation Customer analysis Market demand measurement & forecasting

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The Demand ()

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Demand Effect Negative No Demand Latent Falling Irregular Full Overfull Unwholesome Meaning Against it Indifferent Available is unsatisfactory Such as in HC Vaccination, Psychiatry Blood Donation Screening Programs Cancer, aging, birth control Marketing Task Analysis Positive Promotions Find ways to connect (benefit) with market Measure size of potential market Remarketing (creative) OR Stop service Alter time pattern: pricing - pro. - access Maintenance Demarketing ($access, $ pro#price) [selective] Anti-product campaign [De-marketing]

Any service at any hospital at any time Time Variation Satisfied acc. to capacity Higher than capacity Unpleasant, harmful Emergency (night, WE) Pediatricians (school y.) Any service ERs, OP clinics or PCP in insurance policy Smoking, drugs, alcohol etc

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Defining the markets

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Explanatory Story

The Wedding Party !

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Imagine you're going to a wedding party with the intention of seeking a beautiful woman for marriage using the privilege of your being rich and youre trying to show it in all useful means

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Interpretation
Party The Party Men & Women in the Party Women in the Party The Marriage Being Rich Useful Means Business The Marketplace The Population The Market The Service (Product) Competitive Edge Marketing Mix

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Interpretation (cont)
Party Women in the Party Single women Single women seeking marriage Single beautiful women seeking marriage The 3 women you get introduced to The 1 you will propose to
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Business Market Potential Market Available Market Available Qualified Market Served Market Penetrated Market

Total population

100%

Potential market

100%

40%
Available market Qualified available market Served market

20% 10% 5%

Potential market

10%

Penetrated market

Levels of market Definition

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Potential Market

Available Market Qualified Available Market Served Market

Penetrated market

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The potential market

is the set of consumers who profess some level of interest in a defined market offer.

The available market

is the set of consumers who have interest, income or health insurance coverage, where necessary, and access to a particular market offer.

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The qualified available market

is the set of consumers who have interest, income or health care coverage, where necessary, access and qualification for the particular market offer.

The served market

is the part of the qualified available market the organization puts effort into attracting and serving.

The penetrated market

is the set of consumers who are actually Consuming the product.
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Market demand measurement & forecasting

Total Market Demand Area Market Demand Total Market Sales Forecasting Future Demand

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Area Market Demand

The Market demand for a product may vary geographically. So the organization must decide where to focus its marketing effort
4 METHODS: q Area Analysis of Current Sales q Single-factor and multiple-factor indicators q Supply factor indicators q Distance-adjusted index

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Area Analysis of Current Sales

Study where your current patients (sales volume) are coming from (dot-map) o Very Common o Misleading

Single-factor and multiple-factor indicators

o >55 ICU Social class Annual Income Urban residence (single) Dental services (multiple)

o Inpatient demand vs. Ambulatory demand

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Supply factor indicators

Remember the Golden Rule of supply & demand that exists in every business except HEALTHCARE It could be even TWISTED & REVERSED

Ford More Cars with the same price Demand does not change

Hospital More physicians, Equipments & beds Demand increase

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Distance-adjusted index
Market attractiveness falls off with the square of the distance of the market from the location of the service. Travel much farther to see a specialist.
Market Attractiveness

Square Distance

+ve relationship with market size -ve relationship with market location

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Forecasting Future Demand

The factors affecting demand:

(1) Non-controllable Macro Environment Factors such as the state of the economy, new technologies, and new reimbursement policies (2) Competitive Factors such as competitors new facilities, new services, and promotional expenditures; (3) organizational factors such as the organizations facilities, new services, and promotional expenditures.

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Forecasting Future Demand

A forecast can be based on what people say, what people do, or what people have done. What people say encompasses two methods (1) buyer intention survey (2) middleman estimates. What people do involves (3) market testing. What people have done involves (4) time-series analysis (5) statistical demand analysis.

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