Chapter 5. Gathering Information and Measuring Market Demand. MBA 671. Dr. S. Borna. Objectives. Components of a marketing information system Criteria of good marketing research Decision support systems for marketing management Demand measurement and forecast. What is information?.
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Gathering Information and
Measuring Market Demand
Dr. S. Borna
1. Growth in size & complexity
2. Proliferation of staff groups
3. Improvement of information
4. Shifts from local to national
and international markets
5. Transition from buyer’s
need to buyer’s wants
6. Transition form price to
Important to marketers
A marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
Components of Marketing Information System
(1) Marketing Intelligence system
A marketing intelligence system is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment.
(Internal recording Systems)
Deals with information reported to
people outside of the organization.
Deals with information reported
to people inside organization. What
price to charge for a product?
Whether to expand production facilities
Is the systematic design, collection
analysis, and reporting of data and
findings relevant to a specific
marketing situation facing the
1. Externally: Universities,
Research Firms etc.
informationThe Marketing Research Process
Why to measure “Market”?
Why managers need to
understand market measurement
a) Managers may have to do their
own market measurements;
c) To be aware of the limitations
of market measurement
Which market to target?
What resources to allocate?
Is company’s sale performance
on a segment by segment
Product line sales
Product form sales
Product item sales
Time levelNinety Types of Demand Measurement (6 x 5 x 3)
Market? Potential Market? Available
Market? Qualified Market? Etc.
is the total volume that would
be bought by a defined
customer group in a defined
geographical area in a defined
time period in a defined
marketing environment under
a defined marketing program.
Is an estimate of maximum
possible sales of a product
for an entire industry during
a stated period.
A demand estimate based on
the most likely level of
industry expenditures on the
marketing programs currently
(Plan marketing activities then forecast
(forecast sales then plan marketing
1. Determination of market entry
2. Location and size of new sales
offices, warehouses, and plants
3. Determination of trade channels
4. Determination of sales territories
5. Determination of sales quotas
6. Allocation of advertising efforts.
“LARGE T.V. SCREEN”
36-INCH AND OVER
1. Does not say anything about
competitive nature of the market.
2. Measurement problems
Total market potential
D=total market potential
N=no. of buyers in a given market
BUYING POWER INDEX
B = .5 Y + .3R + .2 P
Note: There are several other methods
available for measuring market potential
3 FORECAST INFORMATION
1. WHAT PEOPLE SAY
2. WHAT PEOPLE DO
3. WHAT PEOPLE HAVE
1. Survey of buyer intentions
is appropriate if:
No. of buyers are few
Cost of reaching them is low
Intentions are well defined
Willing to disclose their
intentions. Buyers implement
3. Expert Opinions
4. Executive Opinions
How Many Markets?
TREND ANALYSIS (T)
ERRATIC (E) EVENTS