Industrial Marketing

Research
&
Demand Forecasting
Submitted by:
Kirti Saini, Roll No.-11,
Priyanka Sharma, Roll No.- 12
 Industrial Marketing Research
INDUSTRY + MARKETING + RESEARCH.
Industry means a set or aggregate of firms
producing similar products or having similar
business activities.

Marketing is the social and managerial process

by which individuals and groups obtain what they
need and want through creating, offering and
exchanging products of value with others.

Research refers to a systematic, objective and

thorough investigation of a subject in order to
discover relevant information or principles.
Meaning of Industrial Marketing Research

Marketing research is defined as the

objective and systematic process of
obtaining, analyzing and reporting of data
for decision making in marketing.

Industrial marketing research is the

systematic and objective search for and
analysis of information relevant to the
identification and solution of any problem in
the field of industrial marketing.
Scope of Industrial Marketing Research

 Development of market potential

 Market share analysis
 Sales analysis
 Forecasting
 Competitor analysis
 Benchmarking
 New product acceptance and potential
 Sales quota determination
Uses of Industrial Marketing Research

 Studying the Business Trends.

 New product studies.

 Sales quota determination.

 Market potential and market share analysis

Differences b/w Industrial & Consumer Marketing
Research
 Industrial Marketing Research  Consumer Marketing Research

1. Population size is small

and thus a small sample 1. Population size is large
size. and sample size is also
2. Research personnel large.
should be trained and 2. Needs to be trained but
technologically oriented. need not have technical
3. Secondary data forms a orientation.
very important source. 3. Focus only on primary
4. Difficult to define data.
respondents, because 4. Defining respondents
purchasing would involve would be simpler.
lot of people
Industrial Marketing Research
Process:
Identifying the Problem & research objectives

Develop the research Plan

Collect Information

Analyze the information

Presentation of the findings

Demand Forecasting
 Demand: The desire of customers for goods
or services which they wish to buy or use.

 Forecasting: To say in advance what is

expected to happen or to predict for future
with the help of information (prediction or
estimation of a future situation.)

Demand Forecasting:
Predicting the trend of demand of the market
in future.
Factors considered while forecasting:
 Market Capacity: It is total number of products that can
be used in a particular period of time. E.g. The total
number of laptops that can be used in India in 2009.

 Market Potential: It is the highest amount of sales

expected in a certain period.

 Sales Potential: It is the maximum amount of sales that a

company can expect during a particular period of time.

 Sales Forecast: It is expected amount of sales by a

company, during a particular period of time.

 Sales Quota: Industrial targets for the sales person.

Models of Forecasting
(I)Forecasting model by Bales & Peppers

Formulation of the forecasting aim

Identification of external and internal factors

Collection and analysis of information

Selecting of forecasting method

Verification of the forecasting method

Accomplishment of market forecast

(II) Top-Down & Bottom-Up Model
“Top-Down” Forecast of macroeconomic indices & factors

Market demand Forecast

Demand Forecast for the company’s products

Market Demand Forecast

“Bottom- Up”
Demand forecast for the market segments

Separation of market demand according to

segments
Techniques of Forecasting:

Techniques
Techniques

Non-Quantitative
Non-Quantitative Methods
Methods Quantitative
Quantitative Methods
Methods
 Non Quantitative Methods
(a) Executive Opinion
 Simplest way of forecasting
 Opinion is taken from the
executives of the company.
 Top Management is
involved.
APPLICABILITY:
 Unavailability of data
 Limited resources (by SSC’s)
LIMITATIONS
 Difficult to predict without
data
 Single person may dominate
the whole group
(b) Delphi Technique
 In this method, opinion is
taken from the group of
experts regarding demand
forecast.
 These opinion are then
sent to the coordinator.
 Then an average value is
obtained and sent to others
for discussion.
 The process continues till
a final figure is reached.
ADVANTAGE:
Single person can not
dominate the whole group
(c) Sales Force Composite (d) Test Marketing
Sales person are asked  Specifically done for new
to project the next year’s product.
sales for the particular  An area is fixed and sales
region he works. figures for this area are
Advantage: observed.
The sales person would be  These can then be scaled
responsible for their up for the complete
future targets. market.
Disadvantages: Sales Disadvantages:
person are not trained in Competitors often try to
such forecasting jobs distort results and it takes
and they put very little time to complete the
effort in this work & find process.
it monotonous.
(e) Customer Buying Intention
 In this, Customers are often asked about their intentions to buy a
product over a period of time.
 These are then combined together to have a total figure.
 These are then broken down as per as region, customers or
territory for industrial customers.

Advantages:
 Customers are few in numbers.

 The demand can be forecasted with certain degree of accuracy.

 Business customers often decide on, with past buying experience.

 
Disadvantage:
 Customers may not respond.

 The requirement may shift depending on the economic conditions

 Costly method to forecast demand.

Quantitative Method
(a) Moving Average (b) Box Jenkins:
 This method uses
This is based on average of
computer analysis to


various sales figures over a period

of time.
 This average is calculated to
balance the extreme values at
both points.
 For every period, a new average
is calculated. This is called as the
moving average.
 The moving average brings down
seasonal variations in the data
and thus gives very reasonable
forecast.
Drawback: When a strong trend
exists, moving average lag
behind.
predict the demand.
Disadvantage:
 Expensive procedure
 Requires high degree
of expertise
 Requires large number
of historic data
 Results are almost
same as that of other
methods.
(c) Econometric Method (d) Input Output Model
 It is a popular form of
This method uses economic
forecasting industrial


theories to predict the

demand. demand. They are
Advantages: metrics which show the
 Many finer points get amount of input that is
captured in this model required from each
 Uncertainties can be predicted
industry that is for a
to quite a greater extent.
 
specified output of
Disadvantage: another industry.
 Highly Expensive

 Highly Complex  Disadvantage:

 Incapable to measure all the Expensive model to
changes in the economy. build.
(e) Correlation & Regression Analysis
 In this method, various variables are studied
simultaneously to see the interrelation between
the various factors. This is called as correlation.
 The values can range from -1 to +1. The
higher the values, more correlated the variables
are.
 Regression analysis is to find out the cause
and effect relationship between two variables.
How the change of one particular variable will
result into a change of another variable.
THANK YOU