Forecasting and demand measurement (in terms of marketing) is a tool required to forecast the future of product life.
This tool is used by firms to anticipate product life span, how long this product can run in the market. In the process of forecasting and demand measurement, a firm understands the market behavior, after that, it starts research based on the market environment to exclude survival opportunities for the product.
In terms of opportunities, the firm must get the following heads:-
Shape, size, growth, competition, sale strategies, profit potential, marketing, fundraising, etc.
Forecasting is about taking an idea about future situations of the market, what will be the situation of the market, assuming it before the time is called Forecasting.
Demand measurement as its name suggests it is the study of the current market, it shows the current situation of the market, In this, you can take an idea about the current expanding market at present.
Reliance Jio used this strategy and invested 2.5 Lakh crore (25000000000000). Till today it acquired the highest market share of the telecom industry, which we will see in the case study.
What is in it for me
- The 3 different types of Personas
- Reason for Forecasting
- The types of Forecasting
- The 3 Stages of Sale forecast Creation
- The 3 Stages of Forecasting
- Techniques for Sale Forecasting
- Expert Opinion
- Jio Case Study
1) The 3 different types of Personas
Through this tool, the demand for the product is forecasted.
Through this tool, the need for the product is forecasted.
Through this tool, if the market is for the product, it is forecasted.
2) Reason for Forecasting:
The world is full of risk and unreliability, and most of the decisions are taken under risk. A company comes across several risks, both internal or external to the operations such as technologies, employees, recessions, law update by the government, etc.
3) The types of Forecasting:
- Macro Forecasting
- Micro Forecasting
A firm calculates the forecasting at a broad level to the market. It determines the demand in the market and calculates future needs.
It is concerned with detailed unit sales forecasting. This is for product market share in a specific industry, to guess future product life span.
Forecasting selection depends upon following heads:
a) High accuracy
b) Research and development
c) Market data information availability
d) Product lifecycle
4) The 3 stages of Sale forecast creation:
- The total volume of market demand generated through customer groups defined geographical areas, marketing behavior, and time tenure, etc.
- firm demand is a firm share of market demand.
- Sale forecast is expected firm sale based on the marketing plan, environment, and R&D.
Future Demand Expectations:
Future demand expectations for a product is done by risk calculation of the market. Whether an upcoming product can survive or not. It secures from the failure of the product and maintains stability. It makes better sales forecasting and a crucial success factor.
5) The 3 Stages Of Forecasting:
- Macroeconomics Forecasting Preparation.
- Industry sale forecast preparation:- what will happen to overall sales in a firm based on the issues that influence the macroeconomic forecast.
- Company sale forecasting preparation:- it is based on what management expects to happen to the company market share.
6) Techniques For Sales Forecasting:
- What is the customer feedback about the product and its intention to rebuy the product?
- What customer is doing in the market?
- What customer had done in the market.
- Time series analysis.
7) EXPERT OPINION:
A firm can gain future expectation reports from experts, dealers, distributors, suppliers, marketing consultants, and trade associations.
Dealer estimates are subject to the same strengths and weaknesses as sales force estimates.
Many industries purchase economic and industry forecasts from well known economic forecasting firms that have more data available and more forecasting expertise.
Sometimes, the firm invites a group of experts to prepare a forecast. The experts exchange views and produce an estimate as a group or individually.
PAST SALES ANALYSIS:
Firms can develop sales forecasts based on past sales. Exponential smoothing projects the next period’s sales by combining an average of past sales and the most recent sales, giving more weight to the latter. Statistical demand analysis measures the impact of a set of causal factors on the sales level.
MARKET TEST METHOD:
When buyers don’t plan their purchases carefully, or experts
are unavailable, a direct market test can help forecast new product sales or established product sales in a new distribution channel or territory. Read relevant topic to understand how it works
Forecasting makes isolation for businesses. Planning and forecasting are an approach in which companies work together for market share and take responsibility for their actions. The objectives of Forecasting are to supply chain by generating a need demand and, delivering the right product at the right time to the market, and improving customer services.
We can better understand the Forecasting and Demand Measurement through this Jio Case Study:-
8) JIO CASE STUDY
In 2002, after the death of Dhirubhai Ambani, The Ambani brothers wanted to run a business on their own. And it became a big issue in the media. So, to tackle this situation, their mother decided to do a partition of the business. Anil Ambani gets Reliance Communication, Reliance Energy, Reliance Capital, etc. and Mukesh Ambani got Reliance Industries and I.P.L.
So there was put a non-competing low against Mukesh Ambani. In 2010 the clause has ended, so, elder brother Mukesh Ambani buy the 96% share of Infotel broadband, and that converted into Jio in 2016.
Infotel Broadband wanted to set the biggest network tower in India. Now Jio has India’s biggest 4G network, at that time there was not fully working 3G. Jio continuously researches for 5 years and try to set their network in every state. Now, they have to launch themselves.
Mukesh Ambani always made clear that India is the price-sensitive market and if you have to succeed, you have to provide cheaper services. So they started distributing their sims for free of cost, which had unlimited data and voice calling. After the launch, it became a word of mouth and Jio didn’t have to market itself. Media had a very limited role in its advertising, and JIO became the fastest growing mobile network in India gradually.
So, it is the strategy for gaining customers in the initial stage, after building a strong network Jio starts charging for their plans. Jio releases their membership plan for rs.99 And the base plan for rs.149. In their base plan, they provide unlimited data or voice calling so every consumer ready to invest in Jo.
Mukesh Ambani Invested 2.5 Lakh crore in Jio, which is the total value of Airtel, Vodafone and idea combine. Before Jio, every telecom rules the market after arising the Jio all telecom companies have to decrease their prices. It causes competition and ultimately it’s a win-win situation for consumers.
As of now, Jio is India’s largest network provider and recently it launches its Jio Fiber that provides free internet for home.
Demand forecasting contains good planning and utilization of resources for the company. Forecasting is the main part of demand marketing since it provides predictions of future demand and the basis for planning and making decisions. Both quality and quantity methods are available to help organizations. Since forecasts are completely accurate for businesses.
Thank You all.
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