Market Research

&
Sales Forecasting
 What is Market Research?
• Simply a matter of finding out as much as
you can before committing yourself to an
irretrievable step
• When you do not have answers through
your own Market Information and
Intelligence System
 What to find out?
• What does the customer need?
• Who is the target audience and how much
can you find out about them?
• What is the competition?
• Are there any gaps in the market?
• Would the product be acceptable in the
market?
 Do I need Market Research?

• Yes. Provided I know what I want.

 The MR Process
• What is the Marketing Problem?
• What is the Research Problem?
• Developing the Research Plan
• Research Approach
• Research Instruments
• Collecting the Information
• Analysing the information
• Presentation of findings
 Data sources
• Reference Library
• Directories of Products/Companies
• The Bombay Stock Exchange
• Industry/Trade Journals
• Trade fairs and Exhibitions
• Company Annual Reports
• Internet
 Testing Product Acceptability
• If your product is a knock - down kit , give
it to the factory peon to assemble it.
• Post the item back to yourself and assess the
damage the transporter does to it.
• Try various types of packaging and choose
a suitable cost effective option.
• Try a number of product names and
determine which is more acceptable.
 Sales Forecasting - Why is it
necessary?
• To raise the necessary cash for investment
and operations
• to establish capacity and output levels
• to acquire and stock the right amount of
supplies
• to hire the required number of people
 Market
• A set of all actual and potential buyers of a
product or service
 Potential Market
• A set of consumers who profess a sufficient
level of interest in a product or service
 Available Market
• A set of consumers who have interest ,
income and access to a particular product or
service
 Qualified Available Market
• A set of consumers who have interest,
income, access and qualifications for the
particular product or service
 Target Market
• Part of the qualified available market the
company decides to pursue
 Penetrated Market
• A set of consumers who are buying the
company’s product or service
 Market Demand
• Total volume that would be bought by a
defined

• customer group
• geographical area
• time period
• marketing environment
• marketing programme
 Market Potential
• Boom period
• Recession
 Market Minimum

• The market potential of the product with

minimum marketing effort of the industry
 Sensitivity of Demand

• Market Potential - Market Minimum

 Market Forecast
• Market demand corresponding to the
industry marketing expenditure

• This would be lower than the market

potential
 Company Demand
• Estimated share of market demand at
alternative levels of company marketing
effort in a given time period
 Company Sales Forecast
• Expected level of company sales based on a
chosen marketing plan and an assumed
marketing environment.
 Sales Target
• Sales goal for a product line,company
division or a sales rep.It is a benchmark to
evaluate achievements against goals set.
 Sales Budget
• Conservative estimate of the expected
volume of sales and is used for
purchasing.production and cash flow
decisions
 Estimating Market Potential
• Chain - ratio method
• Demand for Complan =
• Population *
• per capita discretionary income *
• % discretionary income on food *
• % spent on beverages *
• % spent on health beverages *
• % spent on white health beverages *
• % spent on Complan
 Other methods
• Market built - up method
• Industry sales and market shares
 Estimating Future Demand
• Survey of buyer’s intentions
• Composite of sales force opinions
• Expert opinion
• Past sales analysis
• Market test method