Market Demand, Share, and Research: A Comprehensive Analysis
Understanding Market Dynamics
Potential demand is the maximum sales achievable in a given period. It may not include consumer preferences or competitor actions. The difference between total and potential demand is that potential demand is theoretical, while total demand is real.
Market Share Explained
Market share is the proportion of total sales a company captures. It’s calculated using a specific formula, showing the percentage of products bought from the company within the market.
What is Market Research?
Consumer needs change with society. Human needs are unlimited. To succeed in selling a product, intuition isn’t enough; market research is essential.
A market survey collects, processes, and analyzes information about the environment, competition, and consumers. This information is crucial for planning and making informed management decisions.
Phases of Market Research
Defining the Research Purpose
Clearly define what you want to know. Without a clear objective, the research may be misdirected, wasting effort and resources. A goal could be to identify consumer needs for a new product or to increase market share.
Designing the Research Model
Determine how the research will be conducted. Key information sources include:
- Internal company information: Reports, executive interviews, and distributor feedback.
- Official statistics: Data from directories and national or international studies.
- External research: Information on competition, customer preferences, and environmental changes.
Data Collection
This is often a costly process. Secondary data can be obtained from official agencies and professional associations. Data types include:
- Primary data: Unstructured information collected specifically for the study, like survey results.
- Secondary data: Structured data previously collected for other purposes, such as census data.
Use secondary data first to reduce costs. If the project is viable, then collect primary data.
Classification and Structuring of Data
Classify data using statistical procedures like graphs and tables.
Data Analysis and Interpretation
Analyze the classified data. This is crucial as market intervention decisions depend on the results.
Report Release
Prepare and submit a final report with the study’s conclusions. This report communicates results and serves as a record for future decisions. The report should be understandable to business managers.