Measuring and Forecasting Markets: Demands measurement

Forecasting and demand measurement (in terms of marketing) is a tool

required to forecast the future of product life. This tool is used by firms to
anticipate product life span, how long this product can run in the market.

This tool is used by firms to anticipate product life span, how long this product can
run in the market. In the process of forecasting and demand measurement, a firm
understands the market behaviour, after that, it starts research based on the market
environment to exclude survival opportunities for the product.

Forecasting is about taking an idea about future situations of the market, what will
be the situation of the market, assuming it before the time is called Forecasting.

Demand measurement as its name suggests it is the study of the current market, it
shows the current situation of the market, In this, you can take an idea about the
current expanding market at present.

What do you mean by Forecasting?

Forecasting is about taking an idea about future situations of the market, what will
be the situation of the market, assuming it before the time is called Forecasting.

How demand forecasting is done?

The first approach involves forecasting demand by collecting information
regarding the buying behavior of consumers from experts or through conducting
surveys. On the other hand, the second method is to forecast demand by using past
data through statistical techniques.

Why demand forecasting is important?

It helps an organization to reduce the risks involved in business activities and make
important business decisions.

The types of Forecasting:

 Macro Forecasting
 Micro Forecasting
o Macro Forecasting 
A firm calculates the forecasting at a broad level to the market. It determines the
demand in the market and calculates future needs.

o Micro Forecasting
 It is concerned with detailed unit sales forecasting. This is for product market
share in a specific industry, to guess future product life span.

Forecasting selection depends upon following heads:

a) High accuracy
b) Research and development
c) Market data information availability
d) Product lifecycle

The 3 Stages Of Forecasting:

1. Macroeconomics Forecasting Preparation.

2. Industry sale forecast preparation:-  what will happen to overall sales in a
firm based on the issues that influence the macroeconomic forecast.
3. Company sale forecasting preparation:- it is based on what management
expects to happen to the company market share.

Techniques For Sales Forecasting:

1. What is the customer feedback about the product and its intention to rebuy
the product?
2. What customer is doing in the market?
3. What customer had done in the market.
4. Time series analysis.

EXPERT OPINION:
 A firm can gain future expectation reports from experts, dealers, distributors,
suppliers, marketing consultants, and trade associations. 
 Dealer estimates are subject to the same strengths and weaknesses as sales
force estimates.
 Many industries purchase economic and industry forecasts from well known
economic forecasting firms that have more data available and more
forecasting expertise.
 Sometimes, the firm invites a group of experts to prepare a forecast. The
experts exchange views and produce an estimate as a group or individually.