Market demand is the total, combined demand of everyone who is willing
and able to buy a good in a market. For example, at price P, the
market is willing to buy quantity Q. This article does a good job of
explaining and illustrating market demand:
http://www.amosweb.com/cgi-bin/wpd.pl?fcd=dsp&key=market+demand
Market potential is the total possible demand for a good. It is based
on the number of potential buyers for a good. This article explains
market potential: http://www.mitretek.org/bristolgroup/pdf/have_you_checked_your_market_potential.pdf
Sales forecasting involves predicting the sales your company will
achieve, given demand in the potential market. To forecast sales, you
must develop a profile of your target market customers, review market
trends, establish the size and location of your trading area, adjust
for competitors? share of the market, then estimate the share your
organization can achieve. You would base your predicted share on past
behaviour, product adoption trends, population and economic growth,
the power of your sales force, and the effect of advertising and
marketing tools. If your company already has a well established sales
history, you can compare past sales growth to past industry growth.
For example, if you company steadily grew at 2% a year while the
industry grew 4%, then you could estimate that your company?s sales
will grow at half the rate of current industry growth. That is, if the
market is growing at 6% now, you could predict 3% annual growth for
your company. However, it may be wise to underestimate growth, in
order to provide for changes in the market. See this article for more
information on how to forecast sales:
http://www.zeromillion.com/business/sales-marketing/sales-forecasts.html |
