Forecasting Total Market Demand – Part 2 Essay
- Drivers of Demand
- Forecast the drivers of demand in the market segments that were identified in Part 1. Note: These segments may differ from the market segments that are used to develop a marketing strategy.
2 Macroeconomic Factors
- Make predictions about how the drivers of demand could change. What macroeconomic factors could cause the drivers to change?
3 Sensitivity Analysis
- Conduct sensitivity analyses to understand the most critical assumptions and to gauge risks to the baseline forecasts.
- What assumptions about your industry must be true for an accurate demand forecast?
- What items or events could cause your forecasts to change? Forecasting Total Market Demand – Part 2 Essay.
4.Cite all sources in APA format – 5 sources one being the Holy Bible
5. 5 pages title and reference
Forecasting Total Market Demand-Healthcare Industry (Medical Devices & Equipment)
Many companies and industries have made numerous grave strategic mistakes due to imprecise and inappropriate industrywide demand forecasts. The erroneous suppositions might not emanate from a dearth of forecasting techniques, including ancient trend pressing, regressions analysis, and other methods accessible to all business players. Such industries fail to predict fluctuations in end-user behavior or apprehend their markets’ saturation level. It is essential to know that a prediction of total-market demand might not warranty an effective strategy. However, without such a technique, marketing support, investment decisions, among other pertinent resource allocations, would be founded on concealed, unconscious conventions regarding industrywide prerequisites, and they might habitually be erroneous. Notably, going through the course has merit for the management personnel. This will enable the team to develop the planning strategies by all means rather than merely coming out with pat solutions, targets, and numbers. The paper will critically analyze total market demand. It will specifically provide a demand forecast for the healthcare industry. This will entail defining the market, creating market segments, and analyzing market potential.
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Defining the Market
Indeed, if an industry gauges total-market demand explicitly, it will have a superior and precise chance of regulating its firm’s destiny. Ideally, total-market forecasting is merely the initial phase in strategy creation. This means that finishing the forecast does not end the planning process. Various steps are involved in all total-market demand forecasts. They include;
At the start, there is a need to be overly comprehensive when defining the entire market. In actuality, one must define it widely to incorporate all prospective end-users to effectively pinpoint the suitable demand drivers and minimize the risks aligned with surprise product substitution. The healthcare product is majorly called the service. One of the primary services in healthcare is medical devices, equipment, and hospice supplies manufacturers. The company will offer a wide array of medical devices and equipment to the hospitals (Lien et al., 2014). The hospitals, among other medical entities, will buy various supplies from the company. Forecasting Total Market Demand – Part 2 Essay. This will either be through a group purchasing organization or even negotiate directly with wholesalers or distributors. The medical device and supplies industry is an innovative, dynamic and heterogeneous sector. This is because the international marketplace for medical devices and supplies is vast and will continue depicting considerate growth and progress in the future.
This type of industry has different regulatory systems and needs documents for registration within other countries. In fact, only around 65 countries have implemented regulations for medical supplies and devices or plan to implement the rules. Accordingly, the manufacturer should critically clarify its target markets and comply with the relevant laws. For instance, it is essential to note that medical devices and supplies that have been certified by the USFDA might not enter the Chinese market without the CFDA’s certification. This is even though it has taken the most stringent procedures or processes globally mandated by the USFDA (Lien et al., 2014). Again, there is always a need for international harmonization of medical devices and equipment. This is because it will reduce regulatory barriers by facilitating trade or transactions between different nations and reducing the cost of implementing government and industry laws. The medical device and equipment manufacturer is an emerging sector and will ensure users’ safety (patients) by testing them.
Potential End-Users
End-users are typically individuals that consume the products or services. Based on the industry type, end-users will entail companies and healthcare facilities that will need the medical devices, equipment, and supplies from the industry. For instance, the industry will serve different end-users such as Davita Inc., Quest Diagnostic Corp, Tenet Healthcare Corp, Cvs Health Corporation, Hi crush Inc, and Fresenius Medical Care Ag and Co Kgaa. Such corporations and medical entities will depend entirely on the healthcare industry to supply quality and precise medical products.
Product Substitution
A substitute product or service serves a similar purpose as another existing product or service in the market. Based on the law of demand, if a substitute product is brought into the market, the current product’s need will decline. Forecasting Total Market Demand – Part 2 Essay. This means that an upsurge in the price of one product will shift the consumers to the other product. A substitution effect cites that if a product’s price decreases, customers (users) will substitute away from the comparatively expensive products to the cheaper ones (Dolnicar et al., 2018). For the healthcare industry, if it increases the prices of its medical equipment, devices, and supplies, the customers will shift away to other manufacturers providing similar services. This will lead to a decline in its supplies and sales revenues.
Creating Market Segments
| Type of Segmentation | Quantity of Consumption (in “000”). | Sales Revenues in ($)
(“000”) |
| Behavioral Segmentation | 250 Units
The healthcare industry will examine its clients’ actions. It will thus choose to target consumers who have bought high-end medical devices in the past two years. This might include Hi crush Inc. and Fresenius Medical Care Ag. |
750 |
| Psychographic Segmentation | 300 Units
The healthcare sector will focus on healthcare entities that value quality and status. Such organizational managers are motivated to increase efficacy and depict value to their executive personnel, including Cvs Health Corporation and Hi crush Inc. |
500 |
| Geographic Segmentation | 50 units
The industry will focus on the emergency medical entities located in busy towns and cities. This means they will choose to target customers who operate in dynamic cities, including Co Kgaa and Davita Inc.
|
150 |
| Demographic Segmentation | 500 units
The industry will target marketing managers at extensive healthcare facilities such as Quest Diagnostic Corp and Tenet Healthcare Corp. |
1000 |
This is the second stage in forecasting which entails dividing total demand (based on the end-users) into its key constituents (segments) for distinct analysis. It involves breaking down our audience into discrete groups grounded on standard features. This creates marketing campaigns that are suitable and interesting to the end-users. Although the segmentation is adequate for projecting total market demand, it might not generate sets beneficial to develop a marketing approach (McDonald, & Dunbar, 2013). For instance, consumer industry categories might provide an excellent foundation to project total-market demand but give merely minimal aid in framing a policy founded on consumer preferences. When creating market segments, managers should decide whether to develop their market-demand forecast centered on the accessible historical statistics or carry out their marketplace research strategies. Nevertheless, it is advisable to rely on available historical data since undertaking market research is time-consuming and expensive. Forecasting Total Market Demand – Part 2 Essay.
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Consequently, for market segments, there is a lot of information available from secondary sources. For instance, consistent public data on ancient market-demand levels by segments is readily available and accessible for numerous vast healthcare sectors, especially from the federal government, healthcare industry associations, ongoing marketplace statistic services, or off-the-shelf studies by healthcare sector specialists. This will be a good source for segmentation information. While it is a good information source, such readily accessible statistics might not be classified into the ideal categories to support an insightful scrutiny. Therefore, market segmentation will be based on the general population, area operation, status, and past customer purchasing history.
Analysis of Potential Market
There is a need to be considerate of the demand forecasts when analyzing markets. Relying on single-point market-demand forecasts has been related to dangerous risks. This is because several macroeconomic variables aligned with the estimates might be erroneous (del Rio-Chanona et al., 2020). Again, other demand drivers’ assumptions might be incorrect, especially when discontinuities emerge on the limit. Examining the factors that might make the forecast change intensely gives the optimal estimates. This is because they will have a higher probability of identifying potential risks and gaps.
The demand in this healthcare industry is sturdy enough to guarantee a considerate investment. The sector manufactures high-quality medical equipment and devices that will be highly demanded. Based on contemporary market research and studies, medical devices are highly required in hospitals, among other medical facilities (Mathur et al., 2018). The diagnostic equipment and appliances are urgently needed items that will constantly be supplied to emergency-related healthcare facilities. The industry will deliver more than 1000,000 medical devices, equipment, and supplies within a given period due to their increased demand. Considering the above table, demographic segmentation is the market segment with the most incredible opportunities. The segmentation has recorded 500 units of medical devices and supplies within a stipulated period. This means the industry will focus on customers with a higher income and demand more of its products. Such information is realistic and statistical; hence, it is comparatively easy to reveal utilizing innumerable market research sites.
References
del Rio-Chanona, R. M., Mealy, P., Pichler, A., Lafond, F., & Farmer, J. D. (2020). Supply and demand shocks in the COVID-19 pandemic: An industry and occupation perspective. Oxford Review of Economic Policy, 36(Supplement_1), S94-S137.
Dolnicar, S., Grün, B., & Leisch, F. (2018). Market segmentation analysis: Understanding it, doing it, and making it useful (p. 324). Springer Nature.
Lien, C. H., Wu, J. J., Chen, Y. H., & Wang, C. J. (2014). Trust transfer and the effect of service quality on trust in the healthcare industry. Managing Service Quality.
Mathur, B., Gupta, S., Meena, M. L., & Dangayach, G. S. (2018). Healthcare supply chain management: literature review and some issues. Journal of Advances in Management Research.
McDonald, M., & Dunbar, I. (2013). Market segmentation. Chichester: John Wiley & Sons. Forecasting Total Market Demand – Part 2 Essay.
