Market and Demand Analysis
MARKET AND DEMAND ANALYSIS |
In most cases, the first step in project analysis is to estimate the potential size of the market for the product proposed to be manufactured and get an idea about the market share that is likely to be captured. To make an idea about these things an in depth study and assessment of various factors like patterns of consumption growth, income and price elasticity of demand, composition of the market, nature of competition, availability of substitutes, reach of distribution channels and so on is required. Market and demand analysis should be carried out in an orderly and systematic manner. The key steps in such analysis are as follows: 1. Situational analysis and specification of objectives 2. Collection of secondary information 3. Conduct of market survey 4. Characterisation of the market 5. Demand forecasting 6. Market planning
A. Situational analysis and specification of objectives
In order to get an idea about the relationship between the product and its market, the project analyst may informally talk to customers, competitors, middlemen, and others in the industry. Wherever possible, he may look at the experience of the company to learn about the preferences and purchasing power of customers, actions and strategies of competitors, and practices of the middlemen. If such a situational analysis generates enough data to measure the market and get a reliable handle over projected demand and revenues, a formal study need not be carried out. A helpful approach to spell out objectives is to structure them in the form of questions. the following questions are to be - * Who are the buyers of our product? * What is the current demand? * How is the demand distributed? * What is the break-up of demand? * What the price customers willing to pay? * How can potential customers be convinced about the superiority of our product? * What channels of distribution most suited?
B.
In most cases, the first step in project analysis is to estimate the potential size of the market for the product proposed to be manufactured and get an idea about the market share that is likely to be captured. To make an idea about these things an in depth study and assessment of various factors like patterns of consumption growth, income and price elasticity of demand, composition of the market, nature of competition, availability of substitutes, reach of distribution channels and so on is required. Market and demand analysis should be carried out in an orderly and systematic manner. The key steps in such analysis are as follows: 1. Situational analysis and specification of objectives 2. Collection of secondary information 3. Conduct of market survey 4. Characterisation of the market 5. Demand forecasting 6. Market planning
A. Situational analysis and specification of objectives
In order to get an idea about the relationship between the product and its market, the project analyst may informally talk to customers, competitors, middlemen, and others in the industry. Wherever possible, he may look at the experience of the company to learn about the preferences and purchasing power of customers, actions and strategies of competitors, and practices of the middlemen. If such a situational analysis generates enough data to measure the market and get a reliable handle over projected demand and revenues, a formal study need not be carried out. A helpful approach to spell out objectives is to structure them in the form of questions. the following questions are to be - * Who are the buyers of our product? * What is the current demand? * How is the demand distributed? * What is the break-up of demand? * What the price customers willing to pay? * How can potential customers be convinced about the superiority of our product? * What channels of distribution most suited?
B.