Adobe Systems Demand 1 Demand The basis for demand ▪ industry and firm demand ▪ demand analysis, demand forecasting… lecture and seminar Adobe Systems Demand – ABEC - Mikus 2 Demand - theoretical Adobe Systems Demand – ABEC - Mikus 3 Change (movement) of demand curve Adobe Systems Demand – ABEC - Mikus 4 Demand and its characteristics (Kotler, Keller) 1.Negative demand — Consumers dislike the product and may even pay to avoid it. 2.Nonexistent demand — Consumers may be unaware of or uninterested in the product. 3.Latent demand — Consumers may share a strong need that cannot be satisfied by an existing product. 4.Declining demand — Consumers begin to buy the product less frequently or not at all. 5.Irregular demand — Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. 6.Full demand — Consumers are adequately buying all products put into the marketplace. 7.Overfull demand — More consumers would like to buy the product than can be satisfied. 8.Unwholesome demand — Consumers may be attracted to products that have undesirable social consequences. 9. Adobe Systems Demand – ABEC - Mikus 5 Demand analysis ̶The knowledge of demand for our products is one of the key success factors for our company and presents the competitive advantage for the firm. The estimation of demand is easy in short-term range… ̶…but very challenging in long-term range (external factors). ̶ Adobe Systems Demand – ABEC - Mikus 6 90 types of demand Kotler, Keller in 2007 Adobe Systems Demand – ABEC - Mikus 7 90 types of demand Kotler, Keller in 2007 Obsah obrázku text, snímek obrazovky, diagram, řada/pruh Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 8 Target market Adobe Systems Demand – ABEC - Mikus 9 Market demand Adobe Systems Demand – ABEC - Mikus 10 Market demand level – level of sales Obsah obrázku text, snímek obrazovky, diagram, Písmo Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 11 Analysis and planning ̶Q1 – market minimum would take place without any demand stimulating expenditures ( for example on marketing) ̶Q2 – market potential– marketing expenditures beyond a certain level would not stimulate much further demand. ̶ ̶The distance between Q1 and Q2 shows the overall marketing sensitivity of demand. ̶If the difference between Q1 and Q2 is large, that means expansible market – good for investing in marketing ̶If the difference between Q1 and Q2 is small, that means non-expansible market – not affected by the level of marketing expenditure. Obsah obrázku text, snímek obrazovky, diagram, Písmo Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 12 ̶Market forecast – There can be only one actual level of industry marketing expenditure. The market demand corresponding to this level of expenditure is called the market forecast . ̶Market potential – limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment. ̶Company demand – is the company´s estimated share of market demand at alternative levels of company marketing effor in a given time period. Obsah obrázku text, snímek obrazovky, diagram, Písmo Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 13 Methods of demand estimation ̶Usually market research. ̶STEPS: Adobe Systems Demand – ABEC - Mikus 14 ̶Basic methods of demand estimation can be divided as (Horáková, Kubát, 2002): ̶1) Subjective and open-minded ̶2) Quantitative and qualitative ̶3) Simple and analytical ̶ ̶Subjective methods – connected with intuition, opinions and knowledge of interested persons (expert opinions) ̶Open – minded methods – based on the raw data collection – statistic methods are used to evaluate the gained data. ̶ ̶Quantitative methods – include surveys, observation or experimentation, regression statistics, statistic analysis ̶Qualitative methods – unstructured or semi-structured interviewing methods designed to encourage respondents to reply freely and express their real feeling, opinion and motivation. ̶ ̶Simple methods – estimation of only one variable. ̶Analytical methods – demand estimation based on the correlation and relations between more variables ̶ Adobe Systems Demand – ABEC - Mikus 15 How to mesure demand practically? ̶History ̶Statistics from the ERP systems, warehousing ̶Advantages – precise internal and external data ̶Dissadvantages – future might not derived from past ̶ ̶Actual and close future – ERP, club cards, crowdfunding, crowdsourcing ̶ ̶Distant future – big trends, demographics, weak signals ̶ ̶ ̶ Adobe Systems Demand – ABEC - Mikus 16 Factors influencing demand – non-price ̶Price is short term ̶The key is long term ̶Economics ̶Social ̶Disponible income. ̶Preferences. ̶Politics ̶Legal factors ̶Consumers expectations. ̶Prices of supplements or complements. ̶Number of consumers. ̶Age. ̶Environmental ̶Technological ̶ Adobe Systems Demand – ABEC - Mikus 17 Factors influencing demand – non-price ̶Price is short term ̶The key is long term ̶Economics ̶Social ̶Disponible income. ̶Preferences. ̶Politics ̶Legal factors ̶Consumers expectations. ̶Prices of supplements or complements. ̶Number of consumers. ̶Age. ̶Environmental ̶Technological PESTLE Adobe Systems Demand – ABEC - Mikus 18 Theoretical aspects ̶Demand increases if: ̶Lower complement price ̶Fashion shows up ̶Income rise (normal goods) ̶Population increase ̶Expected price rise ̶Demand lowers if: ̶Income rise (inferior goods) ̶Lowering substitute price ̶Expected lowering of income ̶ Adobe Systems Demand – ABEC - Mikus 19 Apple iPhone sales Obsah obrázku text, řada/pruh, diagram, Vykreslený graf Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 20 Why all these? ̶Bullwhip effect ̶Estimation of sales and especially cash-flow ̶Investment planning ̶Production/storage/employment planning ̶The answer to the questions - what, how much and for how much... and all this to whom... Adobe Systems Demand – ABEC - Mikus 21 Bull whip? ̶ Obsah obrázku text Popis byl vytvořen automaticky Adobe Systems Demand – ABEC - Mikus 22 EKB Model (Engel, Kollat, Blackwell) ̶Consumer behaviour entails "all activities associated with the purchase, use and disposal of goods and services, including the consumer's emotional, mental and behavioural responses that precede or follow these activities“. ̶(Kardes, F., Cronley, M. and Cline, T., Consumer Behavior, Mason, OH, South-Western Cengage, 2011 p.7 ) Adobe Systems Demand – ABEC - Mikus 23 Adobe Systems Demand – ABEC - Mikus 24 Consumer behaviour ̶Purchasing behavior can also be affected by external influences, such as: ̶Culture and subculture: based on age, geographic, religious, racial, and ethnic differences ̶Social class – very difficult to measure, division in society according educational attainment, income and occupation ̶Reference group – individual makes the decision according to values being used by someone else ( family, friends, sport team, political party etc.). ̶Opinion leader – influence people due to his/her product knowledge, expertise or credibility Adobe Systems Demand – ABEC - Mikus 25 Consumer behaviour ̶https://www.youtube.com/watch?v=zVplgl3-pRM ̶ ̶Types? ̶ ̶Impulsive – MUST have RIGHT NOW!!!!!!!!!! ̶Habitual – common goods same quality and functions ̶Extensive – expensive goods ̶Limited – medium range goods, selecting, browsing but not too much Adobe Systems Demand – ABEC - Mikus 26 Seminar demand Adobe Systems Demand – ABEC - Mikus 27 Task 1 ̶How will the demand for the following products differ in the selected country and how would you determine it? State when the demand for products will be higher, lower, constant and why? ̶Sugar ̶Wood – fuel for heating ̶Construction work ̶Summer clothes ̶Petrol ̶Flour ̶Solar Panels ̶Cell phones ̶ ̶ Adobe Systems Demand – ABEC - Mikus 28 Task 2 ̶There are numerous non-price factors affecting demand… Try to think about what non-price factors are likely to affect world-wide demand on the car market? (list at least 5 factors) Adobe Systems Demand – ABEC - Mikus 29 Task 3 ̶Name at least two products you have been shopping: ̶ ̶Impulsively ̶ ̶Habitualy ̶ ̶Extensively ̶ ̶Limitedly ̶ ̶ Adobe Systems Demand – ABEC - Mikus 30 ̶Thank you…