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nc. All rights reserved.

 Organizational Demand Analysis

Composed of:
Sales forecasting.
Market potential analysis.

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 Organizational Demand
Perspectives
First, what is the highest possible level of
market demand that may accrue to all
producers in this industry in a particular time
period?

Second, what level of sales can be reasonably

expect to be achieved, given a particular level
and type of marketing effort?

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 Before Using Internet Information

Assess its quality:

how it was gathered,
the size of the sample,
who provided the information,
the purpose for which the information was
collected.

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 Internet Limitations

There are no standards for the information.

The owner has no requirement to provide an
evaluation of the sites accuracy.
No review process.
People can publish whatever they want.

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 Navigating

1. Learn and evaluate the Web sites author.

2. Evaluate the sites credibility.
3. Determine how often the site is updated.
4. Validate the information found on the site with
other sites or from hardcopy sources.
5. Evaluate the accuracy.
6. Use many Internet sources.

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 The Relationship Between Potential and the Forecast

The sales forecast answers the question:

What level of sales do we expect next year, given a

particular level and type of marketing effort?

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 Estimates of Absolute Market Potential

1. Select a statistical series that appears to be related to

demand for the product.
2. For each target NAICS industry, determine the
relationship of the series to the demand for the
product whose potential is being estimated.
3. Forecast the statistical series and its relationship to
demand for the desired time frame.
4. Determine market potential by relating demand to
future values of the statistical series.

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 Important Criteria in Selecting a
Statistical Series

1. Data on the series must be available.

2. Future estimates of the series should be
easier to predict than product demand
would be.

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 Estimating Market Potential
Depends On:
How well the demand or usage factor represents
underlying demand?

The quality of the data used.

The ability to estimate future values of the series and

usage factors.

The extent of distortion caused by using averages and

gross estimates.

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 A Complete Census of the Market
is Warranted When:
1. The markets are very concentrated.
2. There is direct sales contact.
3. Orders have a relatively high value.
4. The unit volume is low.

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 Providing Value From Customer Visits

Should be conducted by a cross-functional team

and,
1.Include well-define objectives,
2.A careful selection of customers,
3.A discussion guide to structure the visit
4.A plan for reporting the results.

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 Two Primary Approaches
to Sales Forecasting
1. Qualitative techniques
Rely on informed judgment and rating schemes.
Include the executive judgment method, the sales force composite
method, and the Delphi method.
Effectiveness of qualitative approaches depends on the close
relationships between customers and suppliers.
2. Executive Judgment
Enjoys a high level of usage.
Collective expertise, experience, and opinions are used.
Primary limitation does not systematically analyze cause-and-
effect relationships.
There is no established formula for deriving estimates.
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 Delphi Application

Usually applied to long-range forecasting.

Well suited to:
New product forecasts.
Estimation of future events for which
historical data are limited.
Situations that are not suited to quantitative
analysis.

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 Summary of Qualitative Forecasting Techniques

Typically, qualitative estimates will be merged with those

developed quantitatively.

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 Quantitative Forecasting Offers Two
Primary Methodoligists

Time series techniques use historical data ordered in time to

project the trend and growth rate of sales.
Regression or casual analysis, uses factors that have affected
sales in the past and implements them in a mathematical
model.

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