Essay Preview: 1b Marketing
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1. Provide a definition of market demand.
Consumers buy just enough of any good so that the marginal benefit of the good is equal to its price. Market demand is the total demand for a good or service by everyone in the population, market, or set area.
2. How are market demand, market potential, and sales forecasting related to each other?
Market potential indexes identify, describe and measure the market demand for any particular product. Market potential reports display the number of adults or households expected to consume a product or service. It measures the relative likelihood of the adults or households to exhibit certain consumer behavior compared to the U.S. average.
Before any attempt at marketing can be successful, a marketer must carefully study the potential market, and determine its potential market demand. According to Kotler and Keller (2006), are the three steps necessary to measure demand in a specific area or group involving evaluating marketing opportunities and gathering information. Determining market demand is the first step in evaluating market opportunities. Following the market demand is to produce a sales forecast, which is the amount of sales a company expects to make based on its marketing plan and the environment of the market it expects to encounter. The third step involves determining market potential. Market potential is the maximum amount of sales in an industry in a given period, depending on marketing efforts and the marketing environment. Once the demand is measured, it is possible for marketers to design specifically targeted marketing plans to take advantage of the demand.
3. The fertility rate in Australia is declining and immigration levels are not yet set at levels that might lead to population growth (at the time of writing). Might this influence the revenue and earnings that Qantas could achieve in the future?
Australias population growth rate is slowing due to fertility rates dropping and with immigration not to a level that would show an increase, or even a leveling; the potential for future customers is decreasing. Qantas will have to find a way to support its customer base in the face of this market change. If there are less potential customers in the future, it will be difficult to maintain or increase current levels of sales. This poses a potential threat to the companys revenues, thus leading to trouble allocating funds for marketing.
One option for the company would be to use the multiple-factor index, which measures market potential by comparing factors such as the population of a specific area, versus the total population of the country, along with factors such as disposable income, age, and/or other factors that may be applicable (Kotler & Keller, 2006). These factors are then given weights, and measured in an index. This index will help specifically market to regions where the best potential for growth is located, and better allocate marketing funds. In addition, the company can also use past sales analysis in its forecasting. Past sales analysis is the use of past tends in sales to help determine future sales potential (Kotler & Keller, 2006). At times, by looking at past trends it is possible to see emerging developments