DEMAND ANALYSIS--- APPLICATIONS

1999 South-Western College Publishing

DEMAND ANALYSISDEMAND ANALYSIS

• OVERVIEW

• Demand Relationships• Demand Elasticities• Income Elasticities• Cross Elasticities of Demand

MANAGERIAL USES

DEMAND ANALYSIS

FORECASTING

DEMAND

MANIPULATING DEMAND

Serves Two Major Purposes

Ancillary Functions

1. Appraisal of performance of a salesman 2. Fixing sales quota 3. Company’s competitive position

DEMAND ELASTICITY

DEMAND MANIPULATION … Private Airlines

Potential

Effective Demand

Growth in Demand

DESIRE

WILLINGNESS

ABILITY

Marketing Strategy

Created

Loyalty Programmes

On Line Bookings

Other Frills

FEASIBILITY STUDIES

Business Prospects

Payback Period

Revenue Generation

Sales/Expansion/

DiversificationSales volume

Demand

Sales volume

Demand

DEMAND ANALYSIS

SALES MANAGEMENT

Fixation of sales targets

Assigning sales territories

Salesman’s compen-

sation

Deciding on distribution

channel

DEMAND ANALYSIS

WAREHOUSE MANAGEMENT

Location of warehouse

Size of warehouse

Warehouse economics

DEMAND ANALYSIS

INVENTORY MANAGEMENT

CONSUMPTION PATTERN

SUPPLY & DEMAND

LOCATION INVENTORIES

DEMAND

ANALYSIS

SIZE OF INVENTORIES

INDIVIDUAL DEMAND AND INDUSTRY DEMAND

INDIVIDUAL DEMAND DEPENDS UPON

1. THE INCOME OF THE INDIVIDUAL

2. THE PRICE OF THE COMMODITY

3. THE PRICE OF THE SUBSTITUTE

4. THE TASTES AND PREFERENCE OF THE CONSUMER

5. SOCIAL CONVENTIONS

PROMOTION STRATEGY

PRICE EFFECT ON

DEMAND

INCOME EFFECT ON

DEMAND

SUBSTITUTION EFFECT ON

DEMAND Advertising creates an image of the Brand… which will sell

Company’s focus on explaining the advantages of the product more persuasively than the competitors

Positioning products as high end products…. Maruti esteem as the Big car

Value for money…. High prices

Discounts, Add-ons, Better service