Demand analysis plays a central part in the process of product planning. In principle, a firm should be continuously reviewing the demand situation not just for its existing products but also for products it might want to produce. In practice of course the cost of collecting and processing information (a major component of which is the managerial time required to digest it) limits the search for information to those market areas in which the firm is currently involved. Even where research is as limited as this, it often consists of simply obtaining market research information on the current state of the market (especially in terms of market shares) without any attempt at forecasting likely developments in the market on different assumptions about consumer behaviour, income, technical developments and so on.
KeywordsProduct Planning Market Area Investment Good Choice Situation Cash Balance
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