Market Analysis Fundamentals

Study Notes

Market Analysis

Available Market: The set of consumers with interest, income, and access to a product or service.
Target Market: The portion of the qualified available market a company aims to reach. This includes consumers who are currently buying the product.
Market Demand: The total amount of a product or service that would be bought by a specific group in a defined area and time.
Market Forecast: A core element of market analysis, projecting future market characteristics and trends within a target market.
Market Potential: The upper limit of market demand when marketing effort approaches infinity in a given market environment.
Company Demand: The estimated portion of total market demand a company expects in a specific period based on how their products are perceived compared to competitors. Factors include pricing, communications, and services.
Company Sales Forecast: The projected sales based on planned marketing and a specific market environment.
Sales Quota: A sales target for a specific product line, division, or salesperson. It often exceeds estimated sales for motivation.
Sales Budget: A conservative sales estimate used for making decisions about purchases, production, and cash flow. It typically falls below the sales forecast to minimize excessive risk.
Company Sales Potential: The upper sales limit a company can reach given its marketing effort in relationship to competitors. The maximum limit of market demand equals the company's potential market sales.

Market Forecasting Methods

Market-Build Up Method: Identifies all potential buyers and estimates individual purchases to determine overall market potential.
Forecasting: Assessing anticipated buyer actions based on known conditions. This encompasses analyzing present and future financial factors.
Surveys: Gather data by inquiring about consumer expectations and financial situations.
Expert Opinion: Gather forecasts from professionals (dealers, consultants, suppliers); useful for obtaining perspectives.
Past-Sales Analysis: Forecasting based on prior sales data.

Sales Analysis Methods

Time-Series Analysis: Separates a series into components (trend, cycle, seasonal, erratic) to project future sales.
Exponential Smoothing: Projects future sales by combining historical and most recent data, weighted towards the more recent.
Statistical Demand Analysis: Studies how factors (like income, expenditures, and price) affect sales figures.
Econometric Analysis: Analyzes a system of equations to statistically determine the different parameters.
Market-Test Method: Directly testing a product/service in a new channel, necessary when extensive data or experts are scarce.

Description

This quiz covers essential concepts of market analysis, including available market, target market, and market demand. It also explores forecasting and the potential of company demand. Test your understanding of these key marketing principles.