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Demand Forecasting and Consumer Survey

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Demand Forecasting (Consumer Survey Method) By: AB-9001 AB-9007 AB-9008 AB-9010 AB-9017 AB-9021 AB-9042 AB-9046
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Page 1: Demand Forecasting and Consumer Survey

Demand Forecasting(Consumer Survey Method)

By:AB-9001AB-9007AB-9008AB-9010AB-9017AB-9021AB-9042AB-9046

Page 2: Demand Forecasting and Consumer Survey

Demand : Demand is the want for a commodity backed by purchasing power

Demand is quantity of a commodity a consumer is willing to purchase At a given priceIn a given market andDuring a particular period of time

Forecasting : Estimating the future course of events with a reasonable degree of accuracy.

Page 3: Demand Forecasting and Consumer Survey

Demand ForecastingDemand Forecasting: Estimating future marked demand

magnitude. On the basis of statistical data and empirical measurement of functional relationship between demand and its determinants.

Demand forecasting is also the foundation of a company’s entire logistics process. It supports other planning activities such as capacity planning, inventory planning, and even overall business planning

Page 4: Demand Forecasting and Consumer Survey

Levels of Demand ForecastingMicro level: - It refers to the demand

forecasting by an individual business firm.Industry level: - Refers to the demand

estimate for the product of the industry as a whole. Usually taken by Industrial of Trade Association.

Macro level: - It refers to the aggregate demand for the industrial output as a whole.

Page 5: Demand Forecasting and Consumer Survey

Significance Of Demand ForecastingSales Forecasting.

Production Planning.

Control of business.

Inventory control.

Growth and long-term investment programmes.

Economic planning and policy making.

Page 6: Demand Forecasting and Consumer Survey

Steps of Demand ForecastingDemand forecasting is a scientific exercise. It has to go through

a number of steps. These steps present a systematic way of initiating, designing and implementing a forecasting system.

1. Identification of objective – Depending on the type of forecast i.e. short and long, objective can be identified

2. Nature of the product and market – Whether the product is consumer good or producer good, perishable or durable, analyzing the demand for finished goods, demand for corresponding raw material and intermediate goods should also be analyzed.

Page 7: Demand Forecasting and Consumer Survey

3. Determinants of demand – It depends on economic, demographic and psychological factors.

4. Analysis of factors - demand functions are classified into four factors.

a) Trend factorb) Cyclical factorc) Seasonal factord) Random factor

5. Choice of method – The economist has to choose a particular technique from among the various techniques of demand forecasting depending upon the nature of product and objective of the forecast.

6. Testing accuracy – The testing is needed to avoid the margin of forecasting error and thereby to improve decision making.

Page 8: Demand Forecasting and Consumer Survey

Types of survey ECONOMIC AND NON-ECONOMIC

FORECASTSMICRO AND MACRO-FORECASTSACTIVE AND PASSIVE FORECASTSCONDITIONAL AND NON-CONDITIONAL

FORECASTS SHORT-RUN AND LONG RUN

FORECASTS

Page 9: Demand Forecasting and Consumer Survey

Techniques of Forecasting

Page 10: Demand Forecasting and Consumer Survey

Characteristics of Consumer Survey MethodUser /Consumer/Customer oriented.Short term usage/validity.Its a primary method.By using this method, a firm can ask

consumers what and how much they are planning to buy at various prices of the product for the forthcoming prices usually a year.

Page 11: Demand Forecasting and Consumer Survey

Characteristics of Consumer Survey MethodThe most direct method of estimating demand

in the short- run is to conduct the survey of buyers intentions.

The consumers are directly approached and are asked to give their opinions about the particular product.

A questionnaire may be prepared in this regard, which can be mailed to customers or send through field investigators.

It must be simple and interesting so as to evoke consumers’ response.

Page 12: Demand Forecasting and Consumer Survey

Process of Consumer survey1. Determine the Objective.2. Determine the resources.3. Determine the population.4. Select the sample (if required).5. Use the right technique for survey.6. Collect the data via the survey.7. Analyze the data .8. Project the forecast considering the

objective.9. Test the accuracy.

Page 13: Demand Forecasting and Consumer Survey

Techniques of Consumer Survey MethodThe methods of market survey are as follows: 1. Questionnaire.2. Interview.3. Schedules.4. Personal observation.

Page 14: Demand Forecasting and Consumer Survey

Example( Questionnaire)Following heads come under questionnaire:

1. Personal Information of consumer2. Questions 1. What is the profession of the customer? 2. Do the customer already have the

Lenovo PC? 3. What is the purpose of buying the product? 4. What are the requirements you want in the

PC? 5. What is the price range you are looking for?

Page 15: Demand Forecasting and Consumer Survey

6.Why Lenovo product?7.How do you come to know about Lenovo

product?8.What are the features you like in Lenovo

products?9.What other features you want to introduce in

our product?10.When would you like to purchase our

product?

Page 16: Demand Forecasting and Consumer Survey

MeritsIt is a direct method of assessing information

from the primary sources.It is a simple method as it is not based on past

historical records.Consumer intercepts are usually held to gain a

fast and quick overview.It does not introduce any bias or value

judgment particularly in the census method.

Page 17: Demand Forecasting and Consumer Survey

DemeritsMany a times consumers are not answering to the

questionnaire.Wrongly drafted questionnaire may lead to

distortions in the answer which lead to unreliable information.

It becomes difficult for a firm to ascertain number of consumers that intend to buy from that firm.

Utility of these estimates is limited to a period of about one year.

There may be sampling error if the sample is not properly chosen.

It is time consuming and costly.

Page 18: Demand Forecasting and Consumer Survey

Media of survey


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