Marketing and Pricing - страница 6

Market demand is the total amount of sales in a particular market and particular brand product for a certain period of time.

Market demand can be classified on the basis of the dependence of demand and marketing efforts:

primary or unstimulated demand is the total demand for all brands, under which a particular product is sold in a particular market without use with any marketing efforts;

market potential is the maximum amount seeking by the market demand at the approach of marketing costs in the industry, productivity certain product, to a value at which its further growth does not lead to an increase in demand for the product. The magnitude of this type of demand has significant impact environmental factors marketing organization or company;

current market demand is sales volume of a particular product for a certain period of time under certain environmental conditions, and at a certain level of use of marketing tools.

In determining the amount consumed, sold goods in a particular period of time of production one must consider this situation not only with terms of consumer behavior, but also the point of view of the manufacturer. In the latter case, often use the term «the real size of the market,» or simply «the capacitance of the market», which is defined the potential annual sales of a certain kind of product at a certain price level.

Speaking directly about the method of determining the capacity of the market, you should immediately call attention to the fact that this measure can be carried out on the basis of statistical information on the volume of production and sales in a particular period of time, taking into account the share of imported from abroad and exported abroad goods of this type.

C = P + R-E + I + D-M-E0 + I0,

where C – the capacity of this market;

P – domestic production of the commodity in the country;

R-remnant inventory in warehouses in the country;

E – exports of goods;

I – volume of imports of the product;

D – reduction of inventory from the seller;

M – an increase in inventory from the seller;

E0 – indirect exports;

I0 – indirect imports.

However, this method has a large proportion of errors due to the imperfections of the existing statistical reporting system. Especially this applies to those commodity markets where a large amount of wholesale and retail intermediaries operate who often distorts to conceal income, the data on the volume of production, sales and revenue.

Among other approaches to determining the capacity of the market we would like to stay on the normative. It is based on the use of consumption norms of certain goods, the sales data, the number of customers and frequency of purchases etc.

In general, the definition of the current market demand (real capacitance of the market) in monetary terms is as follows:

Q = n * q * p,

where Q – the current market demand in terms of money;

n – number of buyers of this type of product in the market;

q – the number of purchases of goods, accounting for one customer in the monitoring period;

p – the average price of this product.

Naturally market capacity calculation by using this method also has a certain degree of error. In this regard, for a more accurate calculation can be implemented in phases, breaking the totality of consumers buying into smaller segments, having more specific characteristics. For example, conducting research market of meat products, consumers can be divided into several segments according to age, believing that the average rate of consumption of meat products vary depending on the age of the consumer. This specification will provide more accurate indicators of the separate to customer segments that have a positive impact on the results of the determination of the total market volume. Natural disadvantage of this method is the difficulty with the definition of the relevant regulations and partitioning on consumer segments. In addition, all the errors that occur in the calculation of interim standards and indicators are reflected in the final result. To avoid this problem, one must use a few different techniques and then find the average value.