This will help you develop skills in both identifying and measuring markets and follows the adage that "if you cannot measure it, you cannot manage it". In marketing it is essential to be able to identify and measure markets. If the practitioner cannot do this then they will not be able to manage a marketing effort. They will, however, be able to participate in the functions of sales and marketing.
The difference between a market and an industry is defined, as are the methods used to measure both current and future demand. The concepts of Primary Demand and Potential Demand are presented, along with their connection to the Economic Cycle. The influences of environmental factors are substantiated.
Summary of Content.
Measures of current and future market demand are needed to make decisions concerning production and marketing effort.
1. We define the market as the set of actual and potential consumers of a product or service. A market is the group of buyers.
2. An industry is a group of sellers that serve the market.
3. The consumers in the market have varying levels of interest, income, access and qualifications for a particular product.
One key task for marketers is measuring current market demand.
1. Current market demand can be viewed in terms of total market demand or area market demand.
2. Total market demand is not a fixed number, but a function of the marketing environment.
3. Market demand is influenced by the level and mix of industry marketing effort. .
4. Demand may also be measured at various levels, geographically, by product and in terms of time.
5. Demand may also be non-expandable, not affected by promotional activities, or expandable, depending on the nature of the product and the market to which it is offered.
Various methods can be used to estimate demand.
1. Marketers can estimate total market demand using the chain ratio method. This method involves multiplying the number of potential customers by a series of factors.