C = P + R-E + I + D-M-E0 + I0,
where C – the capacity of this market;
P – domestic production of the commodity in the country;
R-remnant inventory in warehouses in the country;
E – exports of goods;
I – volume of imports of the product;
D – reduction of inventory from the seller;
M – an increase in inventory from the seller;
E0 – indirect exports;
I0 – indirect imports.
However, this method has a large proportion of errors due to the imperfections of the existing statistical reporting system. Especially this applies to those commodity markets where a large amount of wholesale and retail intermediaries operate who often distorts to conceal income, the data on the volume of production, sales and revenue.
Among other approaches to determining the capacity of the market we would like to stay on the normative. It is based on the use of consumption norms of certain goods, the sales data, the number of customers and frequency of purchases etc.
In general, the definition of the current market demand (real capacitance of the market) in monetary terms is as follows:
Q = n * q * p,
where Q – the current market demand in terms of money;
n – number of buyers of this type of product in the market;
q – the number of purchases of goods, accounting for one customer in the monitoring period;
p – the average price of this product.
Naturally market capacity calculation by using this method also has a certain degree of error. In this regard, for a more accurate calculation can be implemented in phases, breaking the totality of consumers buying into smaller segments, having more specific characteristics. For example, conducting research market of meat products, consumers can be divided into several segments according to age, believing that the average rate of consumption of meat products vary depending on the age of the consumer. This specification will provide more accurate indicators of the separate to customer segments that have a positive impact on the results of the determination of the total market volume. Natural disadvantage of this method is the difficulty with the definition of the relevant regulations and partitioning on consumer segments. In addition, all the errors that occur in the calculation of interim standards and indicators are reflected in the final result. To avoid this problem, one must use a few different techniques and then find the average value.
To have a more detailed approach to the problem of the study of market demand, it is necessary to study the impact on sales and consumption of such factors as: price, income, consumption patterns, etc. The above approach can also be used to predict the demand.
THEME 3. CONSUMER BEHAVIOR AND CUSTOMERS
1. The behavior of buyers in the consumer market
Purchasing behavior (concumer buying) is the buying behavior of individuals or families who acquire goods and services for personal consumption.
Every day consumers make a lot of decisions what to buy. Most large companies explore the process of making decisions about the purchase, to find out what, where, how and how much, when and why consumers are purchasing. Marketers are also studying this process, but they are interested in the answers to the questions what, where and how much.
However, to reveal all the secrets of buying behavior is very difficult, because the reasons for decisions are often hidden away deep in the consumers subconscious.
The main issue of marketing is how different buyers react to marketing techniques? The company who really understands how consumers react to the different qualities of the product, its price and advertising, gets a significant advantage over competitors. The starting point is a model of consumer behavior «motivation – reaction». It is clear that marketing and other incentives penetration-cabins in the «black box» of the consumer and generate a response. Marketers need to find out what is hidden in the «black box.»