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Organizational Demand Analysis

Organizational Demand Analysis. Chapter 6. Forecasting. Why is forecasting important?. Organizational Demand Analysis. Market Potential “Maximum possible sales of all sellers of a given product in a defined market during a specific time period.” Sales forecast

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Organizational Demand Analysis

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  1. Organizational Demand Analysis Chapter 6

  2. Forecasting • Why is forecasting important?

  3. Organizational Demand Analysis • Market Potential • “Maximum possible sales of all sellers of a given product in a defined market during a specific time period.” • Sales forecast • “Maximum share of market potential an individual company might expect for a certain product or product line.” • Example

  4. Forecasting • Where to get information? • Internet • Census bureau • Competitors • Customers • Issues

  5. Forecasting • Potential for Planning Strategy • Forecast helps to plan: • Engineering design and implementation • Marketing and commercial development • External stakeholders • Potentials: Planning and Controlling by Segment • Segment market • Allocate expenditures

  6. Forecasting • Life Cycle Potential • Role of the Sales Forecast • What does it do? • Applying Market Potential and Sales Forecast • Market potential • Sales forecast • Supply chain implications

  7. Determining Market & Sales Potentials • Statistical Series Methods • Easy if • Example • Single Series Method • Make sure series is related to demand for product • Determine the relationship • Estimate future values • Independently forecasting • Rely on government or industry forecasts 4. Determining market potential

  8. Market Research • Surveys • Advantages • Disadvantages • Role of Forecasting

  9. Market Research • Forecasting Methods • Qualitative methods (AKA management judgment and subjective techniques) • Executive judgment • Advantages • Disadvantages • Sales force composite • Advantages • Disadvantages • Delphi method • Advantages • Disadvantages

  10. Market Research • Forecasting Methods • Quantitative methods (systematic or objective forecasting) • Time series • Historical data to project future • Components • Trend • Cycle • Seasonal • Irregular

  11. Market Research • Regression or causal techniques • Determine relationship between sales and an outside variable • Requirements • Limitations • Spurious relationships • Historical data • May not work • Several methods= Better accuracy

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