Measuring Marketing

Chapter 12 Market Demand

Measurement Need

Chapters 9 and 11 described market share and market growth, which are both key measures in a marketer’s performance assessment “toolbox.” Marketers need to measure total demand since it helps indicate whether there is additional opportunity for growth.

Solution

Market demand describes the total demand for a particular product and/or service. It is the sum of existing/repeat customers plus new customers and can be used to measure company-level and market-level demand.i It is represented by the formula:ii

$M_{dt}=P_{rt}+P_{nt}$

Where

Mdt = market demand during time period t

Prt = repeat or replacement purchases in time period t (in dollars)

Pnt = new purchases in time period t (in dollars)