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RITESH ASHISH

SUDHIR
DEEPAK
Profile
We have been in business for the past 50
years manufacturing plastic furniture.

Vision
Every house should have a product of our
company.

Mission
Creating value through convenience.
Swot Analysis
STRENGTH WEAKNESS
• Huge Capital • Problems in future
• Large No. of dealers predictions.
spread all over the
country.
OPPORTUNITIES THREATS
• India’s one of the • Perception that it’s
fastest growing not environmental
market. friendly.
Segmenting &Targeting The
Market

Segmented markets-
3. Households- Low & Middle level
4. Commercial industries
Sales Of Targeted Market
Year Sales (Lower Sales (Middle Sales
Level) in Lakhs level) in Lakhs (Consumer
Industries) in
Lakhs
1999 5 5 12
2000 7 10 20
2001 9 15 28
2002 12 20 33
2003 16 26 39
2004 20 35 44
2005 24 39 48
2006 27 45 52
2007 30 51 54
2008 35 55 60
Forecasting Demand For The
Targeted Markets
• Delhi
• Bangalore
• Chennai
Potential Market Attractiveness Of The
Area
City India Brand India BDI
Sales Category
Sales
Delhi 0.041 0.033 124

Bangalore 0.026 0.025 104

Chennai 0.031 0.037 83


Regional Characteristics of the targeted
market

City Household Avg. Avg. 10+Lakhs 1+ Crore exp / inc


s (000) household household p.a (000)s p.a index
income expenditur- households
(lakhs p.a) e (lakhs
p.a)

Chennai
1,485 174 116 25 433 0.67

Source-Brand equity,08 march 06. Attributed to great Indian middle class


Expenses On Various Sectors

City Food FMCG Dura- Misc. Total


(All figs in Products bles goods/ Market
Rs Cr) servic-
es
Chennai 7,902 823 470 10,102 19,297

Source: Brand Equity, 08 March 06. Attributed to Indicus Analytics.


Potential Market Size of The
Targeted Area
City Potential
Market Size

Chennai 10,88,23,300

Note. In Indian Rs.


ESTIMATED POTENTIAL MARKET SIZE

TOTAL MARKET POTENTIAL = No. Of Potential Buyers * Avg. Quantity Purchased * Avg. Price

Chennai - 4,35,293*1*250= 10,88,23,300

Mumbai - 12,88,365*1*250=
IN CRORES 32,20,91,125
Total Market Potential by Chain
Ratio Method
City Total Market
Potential

Chennai 10,88,25,000

Note. In Indian Rs.


Forecasting Methods
• Time Series : Simple
trend
• Time Series : Moving
& Weighted Avg.
• Regression
Current Trend (Lower Level Income
In Chennai)
In Lakhs (Rs.)
40
35
S 30
A 25
L 20
E 15
S 10
5
0
99

00

01

02

03

04

05

06

07

08
19

20
20

20

20

20

20

20

20

20
No. Of Years
a -11541.6
b 5.776

Year CALCULATIONOFREGRESSIONVALUE INLAKHS(RS.)


1999 Y=-11541.63+5.776(1999) 4.5
2000 Y=-11541.63+5.776(2000) 10.3
2001 Y=-11541.63+5.776(2001) 16.1
2002 Y=-11541.63+5.776(2002) 21.9
2003 Y=-11541.63+5.776(2003) 27.6
2004 Y=-11541.63+5.776(2004) 33.4
2005 Y=-11541.63+5.776(2005) 39.2
2006 Y=-11541.63+5.776(2006) 45
2007 Y=-11541.63+5.776(2007) 50.8
2008 Y=-11541.63+5.776(2008) 56.3

CALCULATION OFREGRESSION LINEANDRESIDUALS(COMMERCIALINDUSTRIE


Y=a+bX
a -11867.8
b 5.94

Year CALCULATIONOFREGRESSIONVALUE INLAKHS(RS.)


1999 Y=-11867.77+5.94(1999) 14.2
2000 Y=-11867.77+5.94(2000) 20.2
2001 Y=-11867.77+5.94(2001) 26.1
2002 Y=-11867.77+5.94(2002) 32.1
2003 Y=-11867.77+5.94(2003) 38.1
2004 Y=-11867.77+5.94(2004) 44
2005 Y=-11867.77+5.94(2005) 49.9
2006 Y=-11867.77+5.94(2006) 53.8
2007 Y=-11867.77+5.94(2007) 53.8
2008 Y=-11867.77+5.94(2008) 59.8
Forecasting Demand for Lower
level in Chennai (09)
In Lakhs (Rs.)
40 Forecasted Demand
35 (09)
S 30
A 25
Regression Line Line 1
L 20
Line 2
E 15
S 10
5
0
No. of Years
01

09
00

02
03
04
05

06
07
08
99

20
20

20
20
20
20

20
20
20
20

Y= a+bx (Sales= -6793.4 + 3.4*x(2009)


(Sales= 37.2 in lakhs for 2009)
RESIDUALS

Year Original Sales Regression Residual


Point
1999 5 3.2 1.8
2000 7 6.6 .4
2001 9 10 -1
2002 12 13.4 -1.4
2003 16 16.8 -.8
2004 20 20.2 -.2
2005 24 23.6 .4
2006 27 27 0
2007 30 30.4 -.4
2008 35 33.8 1.2
Plotting of residuals
2

1.5

0.5

0
Series1
1 2 3 4 5 6 7 8 9 10
-0.5

-1

-1.5

-2
..\..\..\Desktop\low level simple trend
• Open stat result
Current Trend for Medium level in
Chennai
In lakhs (Rs.) 60
50
S
40
East
A
30
L
20
E
10
S
0
99

01

03

07
05
19

20
20

20

20

No. Of Years
Forecasted Demand For Medium
Level Household in Chennai
In Lakhs (Rs.)
70
62.35
60 Forecasted Demand

50
S
A 40 Line 1
L 30 Line 2
E 20
S 10
0
99

01

03

05

07

09
No. Of Years
20

20

20

20
19

20

Y= a+bx (Sales= -11541.63 + 5.776*x(2009)


(Sales= 62.35 in lakhs for 2009)
Residual
Year Original Sales Regression Residual
Value
1999 5 4.5 .5
2000 10 10.3 -.3
2001 15 16.1 -1.1
2002 20 21.9 -1.9
2003 26 27.6 -1.6
2004 35 33.4 1.6
2005 39 39.2 -.2
2006 45 45 0
2007 51 50.8 .2
2008 55 56.5 -1.5
Plotting of residuals
2

1.5
1
0.5

0
1 2 3 4 5 6 7 8 9 10 Series1
-0.5
-1

-1.5
-2
-2.5
..\..\..\Desktop\medium level simple tre
• Open stat result
Current Trend in Commercial
Industries in Chennai
70
In Lakhs (Rs.)
60
S 50
A 40
Line 1
L 30
E 20
S 10
0
2000

2002

2006

2008
1999

2001

2003
2004
2005

2007
No. Of Years
Forecasted Demand For
Commercial Industries in Chennai
In Lakhs (Rs.) 80 73.72 lakhs
70 Forecasted Demand
S 60
A 50 East
L 40 Line 2
30 Line 2
E
20
S
10
0
99

01

03

05

07

09
No. Of Years
20

20

20
19

20

20

Y= a+bx (Sales= -11867.7 + 5.94*x(2009)


(Sales=73 .72 in lakhs for 2009)
Residual

Year Original Sales Regression Residual


Value
1999 12 14.2 -2.2
2000 20 20.2 -.2
2001 28 26.1 1.9
2002 33 32.1 .9
2003 39 38 1
2004 44 44 0
2005 48 49.9 -1.9
2006 52 55.8 -3.8
2007 54 61.8 -7.8
2008 60 67.7 -7.7
Plotting of residuals

0
1 2 3 4 5 6 7 8 9 10
-2
Series1
-4

-6

-8

-10
..\..\..\Desktop\commercial industries si
• Open stat result
Moving Avg. Methods
Formula
Forecasted year = Sum of 3 Previous years
3
MOVINGAVERAGESMETHOD(FOR LOWER INCOMELEVEL)
TIMEPERIOD Y=Y1+Y2+Y3/3
INLAKHS(RS.)

1
1999,2000&2001 5+7+9/3 7
2000,2001&2002 7+9+12/3 9.3
2001,2002&2003 9+12+16/3 12.3
2002,2003&2004 12+16+20/3 16
2003,2004&2005 16+20+24/3 20
2004,2005&2006 20+24+27/3 23.6
2005,2006&2007 24+27+30/3 27
2006,2007&2008 27+30+35/3 30.6
Demand for 2009 30.6

MOVINGAVERAGESMETHOD(FOR MIDDLEINCOMELEVEL)
TIMEPERIOD Y=Y1+Y2+Y3/3
INLAKHS(RS.)
1999,2000&2001 5+10+15/3 10
2000,2001&2002 10+15+20/3 15
2001,2002&2003 15+20+26/3 20.3
2002,2003&2004 20+26+35/3 27
2003,2004&2005 26+35+39/3 33.3
2004,2005&2006 35+39+45/3 39.6
2005,2006&2007 39+45+51/3 45
2006,2007&2008 45+51+55/3 50.3
Demand for 2009 50.3

MOVING AVERAGESMETHOD(FORCOMMERCIALINDUSTRIES)
TIMEPERIOD Y=Y1+Y2+Y3/3
INLAKHS(RS.)
1999,2000&2001 12+20+28/3 20
2000,2001&2002 20+28+33/3 27
2001,2002&2003 28+33+39/3 33.3
2002,2003&2004 33+39+44/3 38.6
2003,2004&2005 39+44+48/3 43.6
2004,2005&2006 44+48+52/3 48
2005,2006&2007 48+52+54/3 51.3
2006,2007&2008 52+54+60/3 55.3
Demand for 2009 55.3
Demand Forecast for lower level
income household
• Forecasting Demand = D(06+07+08)
for 2009 3
• D of 09 = (27+30+35) = 30.6 (lakhs)
3
• D of 09 = 30.6 lakhs

Note: All Amounts in Rs.


Graphical Representation
Sales Graph of previous 8 Periods Sales Graph of 9 Periods
including the forecasted year
In lakhs
In lakhs
35
35
S 30
30 S
25
A 25
A 20 Line 1
20 Line 1
L 15
15 L
10
E 10
E 5
5
S
0 S 0
3 4 5 6 7 8 9 10 11
3 4 5 6 7 8 9 10
No. Of years
No. Of years

Note : 1 Period = Avg. Demand Of 3 years


Household of Medium Level Income

• Forecasting Demand = D(06+07+08)


for 2009 3
• D of 09 = (45+51+55) = Rs. 50.3(lakhs)
3
• D of 09 = 50.3 lakhs

Note : 1 Period = Avg. Demand Of 3 years


Graphical Representation
Sales Graph of previous 8 Periods Sales Graph of 9 Periods including
the forecasted year
In lakhs In lakhs
60 60
S 50 S 50

A 40 40
A Line 1
L 30 Line 1 30
L
20 20
E
10 E 10
S 0 S 0
3 4 5 6 7 8 9 10 3 4 5 6 7 8 9 10 11

No. Of years No. Of years

Note : In Indian Rs.


Commercial Industries
• Forecasting Demand = D(06+07+08)
for 2009 3
• D of 09 = (52+54+60) = Rs.55.3 (lakhs)
3
• D of 09 = 55.3 lakhs

Note: All Amounts in Rs.


Graphical representation
Sales Graph of previous 8 Periods Sales Graph of 9 Periods including
the forecasted year
In lakhs In lakhs
60 60
S
50 S 50
A 40
Line 1
A 40
Line 1
L 30 Line 2 30 Line 2
Line 3
L Line 3
E 20 20

10
E 10
S
0 S 0
3 4 5 6 7 8 9 10 3 4 5 6 7 8 9 10 11

No. Of years No. Of years

Note : In Indian Rs.


Forecasting through Weighted Avg.
Method
• In this we assign different degrees of
importance to the values.
• Highest weight is given to the most recent
data.
• Formula –
f(y)= (y1+2y2+ 3y3)
6
Household (lower level Income)
• F (09) = 06+2(07)+3(08)
6
• F (09) = 27+2(30)+3(35) = Rs.32 lakhs
6
Graphical Representation
Sales Graph of previous 8 Periods Sales Graph of 9 Periods including
the forecasted year
In lakhs In lakhs
35 35
S 30 30
S
A 25 25
20 A 20
L 15
Line 1 Line 1
L 15

E 10 10
5
E 5
S 0 S 0
3 4 5 6 7 8 9 10 3 4 5 6 7 8 9 10 11

No. Of years No. Of years

Note : In Indian Rs.


Household (Middle level Income)
• F (09) = 06+2(07)+3(08)
6
• F (09) = 45+2(51)+3(55) = Rs.52 lakhs
6
Graphical Representation

Sales Graph of previous 8 Periods Sales Graph of 9 Periods including


the forecasted year
In lakhs In lakhs
60 60
S
50 S 50
A 40 A 40

L 30 Line 1 30 Line 1
L
E 20 20

10
E 10
S
0 S 0
3 4 5 6 7 8 9 10 3 4 5 6 7 8 9 10 11

No. Of years No. Of years


Commercial Industries

• F (09) = 06+2(07)+3(08)
6
• F (09) = 52+2(54)+3(60) = Rs.56.6 lakhs
6
WEIGHTEDMOVINGAVERAGEMETHOD(FORLOWERINCOMELEVEL)
TIMEPERIOD Y=Y1+2Y2+IN
3Y3/6
LAKHS(RS.)
1999,2000&2001 5+2*7+3*9/6 7.6
2000,2001&2002 7+2*9+3*12/6 10.1
2001,2002&2003 9+2*12+3*16/6 13.5
2002,2003&2004 12+2*16+3*20/617.3
2003,2004&2005 16+2*20+3*24/621.3
2004,2005&2006 20+2*24+3*27/624.8
2005,2006&2007 24+2*27+3*30/6 28
2006,2007&2008 27+2*30+3*35/6 32
Demand for 2009 32

WEIGHTEDMOVINGAVERAGEMETHOD(FORMIDDLEINCOMELEVEL)
TIMEPERIOD Y=Y1+2Y2+IN
3Y3/6
LAKHS(RS.)
1999,2000&2001 5+2*10+3*15/6 11.6
2000,2001&2002 10+2*15+3*20/616.6
2001,2002&2003 15+2*20+3*26/622.16
2002,2003&2004 20+2*26+3*35/629.5
2003,2004&2005 26+2*35+3*39/635.5
2004,2005&2006 35+2*39+3*45/641.3
2005,2006&2007 39+2*45+3*51/6 47
2006,2007&2008 45+2*51+3*55/6 52
Demand for 2009 52

WEIGHTEDMOVINGAVERAGEMETHOD(FORCOMMERCIALINDUSTRIESLEVEL)
TIMEPERIOD Y=Y1+2Y2+IN
3Y3/6
LAKHS(RS.)
1999,2000&2001 12+2*20+3*28/622.6
2000,2001&2002 20+2*28+3*33/629.1
2001,2002&2003 28+2*33+3*39/635.1
2002,2003&2004 33+2*39+3*44/640.5
2003,2004&2005 39+2*44+3*48/645.1
2004,2005&2006 44+2*48+3*52/649.3
2005,2006&2007 48+2*52+3*54/652.3
2006,2007&2008 52+2*54+3*60/656.6
Demand for 2009 56.6
Graphical Representation
Sales Graph of previous 8 Periods Sales Graph of 9 Periods including
In lakhs the forecasted year
60 In lakhs
70
S 50 60
S
A 40 50
A Line 1
40
L 30 Line 1 Line 2
L 30
Line 3
E 20 E 20
S 10
10 S
0
0
3 4 5 6 7 8 9 10 11
3 4 5 6 7 8 9 10
No. Of years
No. Of years
Forecasting by Regression (lower level
Income)
Sales (Rs.) Income Price (Rs.) Inflation Rate Durability
(000’s) (months)
5 30 100 .04 12

7 40 100 .04 12

9 50 120 .06 14

12 61 140 .05 14

16 70 170 .05 16

20 77 180 .08 16

24 88 200 .06 18

27 97 210 .07 20

30 102 220 .08 24

35 110 250 .12 24

Y= a+b1X1+b2x2..+bnXn
F(09)= (-7.731)+(.080*120)+ (.107*250)+(-7-731*.12)+(.594*24)
f(09)= Rs. 41.9 lakhs
..\..\..\Desktop\lower level multiple regr
• Open stat result
Forecasting by Regression (Middle level
Income)
Sales (Rs. In Income Price (Rs.) Inflation Rate Durability
LAKHS) (In LAKH’s) (months)
5 1 100 .04 12

10 1.2 100 .04 12

15 1.35 120 .06 14

20 1.55 140 .05 14

26 1.75 170 .05 16

35 1.90 180 .08 16

39 2 200 .06 18

45 2.4 210 .07 20

51 2.6 220 .08 24

55 2.8 250 .12 24

Y= a+b1X1+b2x2..+bnXn
F(09)= (-23.964)+(18.823*3)+ (.142*250)+(-15.365*.12)+(-.228`*24)
f(09)= Rs. 60.7 lakhs
..\..\..\Desktop\middle level multiple reg
• Open stat result
Forecasting by Regression (Consumer
industries )
Sales (Rs. In Industry Growth Price (Rs.) Inflation Rate Durability
LAKHS) (In LAKH’s) (months)
12 .03 100 .04 12

20 .05 100 .04 12

28 .08 120 .06 14

33 .05 140 .05 14

39 .06 170 .05 16

44 .10 180 .08 16

48 .11 200 .06 18

52 .16 210 .07 20

54 .18 220 .08 24

60 .20 250 .12 24

Y= a+b1X1+b2x2..+bnXn
F(09)= (-.717)+(76.111*.24)+ (.334*250)+(-55.750*.12)+(-1.225*24)

f(09)= Rs. 64.95 lakhs


..\..\..\Desktop\commercial l multiple re
• Open stat result
Summary of forecasts
Targete Simple Moving Weighte Multiple
d areas trend average d regressi
analysis average on
Lower 37.2 30.6 32 41.9
level

Middle 64.35 50.3 52 60.7


level

Con 73.72 55.3 56.6 64.95


.indus.
Conclusion
• We would like to go with weighted average method as
this gives maximum weight age to the recent trend and
also its results are similar to the moving average method
we can say that the forecasting can be some what
accurate .
• For others method we are not taking in consideration
because in simple trend only one variable defines the
sales and we know that there are many other variables
which define sales .. And for multiple regression the
variables which we have taken consideration does not
reflect the strong relation between the dependent and
independent variables ..