Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

Chapter 05 Measuring Market Opportunities: Forecasting and Market Knowledge Multiple Choice Questions 1. In a _____ approach a central person or persons take the responsi!ilit" #or #orecasting and prepare an o$erall sales #orecast. %. top-down &. linear C. nonlinear '. !otto(-up %nswer: a )e$el o# 'i##icult": *as" +age: 11, -. .hich o# the #ollowing approaches is used to prepare a sales #orecast in decentrali/ed #ir(s0 %. % top-down approach &. % linear approach C. % non-linear approach '. % !otto(-up approach %nswer: d )e$el o# 'i##icult": *as" +age: 11,

1. .hich o# the #ollowing is true o# a statistical #orecasting (ethod0 %. It directl" o!ser$es what real consu(ers do in the product-(arket. &. It is a good techni2ue to #orecast sales #or new products. C. It generall" assu(es that the #uture will look $er" (uch like the past. '. It sur$e"s suppliers and consu(ers to esti(ate (arket potential. %nswer: c )e$el o# 'i##icult": Mediu( +age: 113

4. 5o!ust6ires is an esta!lished tire (anu#acturer in 6opeka. *$er" (a7or !rand o# car uses its tires. It plans to open a !ranch in &u##alo Cit" #or which it intends to use ti(e series
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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

anal"sis to #orecast sales and the (arket potential. .hich o# the #ollowing (ethods is e<e(pli#ied !" 5o!ust6ires0 %. %nalog" (ethod &. =tatistical (ethod C. O!ser$ation (ethod '. =ur$e" (ethod %nswer: ! )e$el o# 'i##icult": Mediu( +age: 113

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

5. .hich o# the #ollowing is true o# sur$e"s0 %. % sur$e" o# !u"er>s intention helps in #orecasting sales o# a protot"pe. &. % sur$e" o# sales#orce opinion is conducted #or !u"ers to #orecast sales. C. % sur$e" (ethod is superior to a statistical or o!ser$ational (ethod. '. % sur$e" has the li(itation that whoe$er is sur$e"ed is knowledgea!le. %nswer: a )e$el o# 'i##icult": Mediu( +age: 11?

@. :one"'ew a well-known con#ectioner" plans to introduce a walnut #udge cand". It asks so(e o# its regular custo(ers to sa(ple the cand" and o##er their opinions. 6his wa" the (anage(ent hopes to esti(ate the likel" nu(!er o# !u"ers #or the product i# introduced in its store. .hich o# the #ollowing techni2ues did :one"'ew use to #orecast sales0 %. O!ser$ation &. =tatistical techni2ue C. =ur$e" '. %nalog" %nswer: c )e$el o# 'i##icult": Mediu( +age: 11? ,. .hich o# the #ollowing (ethods is !est suited to #orecast sales o# new products0 %. =tatistical (ethod &. =ur$e" C. O!ser$ation '. %nalog"
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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

%nswer: d )e$el o# 'i##icult": *as" +age: 1-0

3. .hen (a7or tele$ision (anu#acturers introduced high-de#inition tele$isions the" had to account #or characteristics like picture 2ualit" the le$els o# which were unprecedented. 6he" used data collected #ro( the introduction o# color tele$ision when onl" !lack and white tele$ision was pre$alent. .hich o# the #ollowing (ethods o# #orecasting was used here0 %. =ur$e" &. %nalog" C. O!ser$ation '. Audg(ent %nswer: ! )e$el o# 'i##icult": Mediu( +age: 1-0

?. .hich o# the #ollowing is true o# an analog" #orecasting (ethod0 %. It is a use#ul approach #or entrepreneurs to #orecast sales o# a new !usiness. &. It is !est suited to #orecast sales o# esta!lished products than that o# new products.

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

C. It is purel" !ased on o!ser$ations on what people actuall" do. '. It conducts sur$e"s to esti(ate (arket potential or #orecast sales. %nswer: a )e$el o# 'i##icult": Mediu( +age: 1-0B1-1

10. .hich o# the #ollowing is true o# a li$e test (arket0 %. It does not protect a #ir( #ro( co(petitors who use (arketing tactics that (islead the co(pan" conducting the tests. &. It is the cheapest (ethod to #orecast sales. C. It is (ore pre$alent than e<peri(ental test (arkets. '. It does not let a #ir(>s co(petitors to !u" the checkout scanner data without !earing test (arketing e<penses. %nswer: d )e$el o# 'i##icult": :ard +age: 1-1 11. _____ is an e<a(ple o# a (athe(aticall"-dri$en approach to #orecast sales. %. O!ser$ation &. Con7oint anal"sis C. Audg(ent '. Focus group %nswer: ! )e$el o# 'i##icult": *as" +age: 1-1-. .hich o# the #ollowing state(ents is true o# an adoption process0 %. =ocial (edia hardl" in#luences the speed o# the adoption process.

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

&. )egiti(ac" o# the new product is irrele$ant to the adoption process. C. 6he speed o# the adoption process depends on the relati$e si(plicit" o# a new product. '. 6he adoption process alwa"s rese(!les an in$erted C-cur$e when plotted on a cu(ulati$e !asis. %nswer: c )e$el o# 'i##icult": Mediu( +age: 1-1B1-4 11. .hich o# the #ollowing adopters #or(s the s(allest group in the di##usion o# inno$ation cur$e0 %. Inno$ators &. )aggards C. *arl" adopters '. )ate (a7orit" %nswer: a )e$el o# 'i##icult": *as" +age: 1-4-1-5

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

14. .hich o# the #ollowing characteristics is true o# adopter groups0 %. Inno$ators are not recepti$e to new ideas and tend to adopt a product late. &. )aggards are (ore $entureso(e than later adopters. C. )ate (a7orit" adopt a new product #or either econo(ic or social reasons. '. *arl" adopters want to !e sure that a new product will pro$e success#ul !e#ore adoption. %nswer: c )e$el o# 'i##icult": Mediu( +age: 1-5 15. .hich o# the #ollowing state(ents is true o# #orecasting0 %. Forecasts are not i((une to anchoring !iases. &. Capacit" constraints can ne$er !e (isinterpreted as #orecasts. C. % good #orecasting techni2ue encourages i(plicit assu(ptions. '. 6he techni2ue o# sand!agging aids in e##ecti$e #orecasting. %nswer: a )e$el o# 'i##icult": Mediu( +age: 1-@B1-,

1@. &i/.ear Inc. is a retail chain speciali/ing in !usiness wear #or wo(en. % detailed report on the #astest-selling and the slowest-(o$ing ite(s o# the pre$ious week is prepared !" e$er" &i/.ear outlet. It includes sales in#or(ation a!out gar(ents sold in ter(s o# st"le color store location and region and $arious ti(e periods. 6his helps &i/.ear to keep pace with dail" de$elop(ents. .hich o# the #ollowing (arket knowledge s"ste(s is e(plo"ed !" the retail chain0 %. Marketing data!ases &. Co(petiti$e intelligence s"ste(s C. Internal records s"ste(s '. Client contact s"ste(s %nswer: c )e$el o# 'i##icult": :ard +age: 110
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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

1,. .hich o# the #ollowing wa"s o# collecting in#or(ation !est illustrates a (arketing data!ase0 %. DCookiesD or electronic signatures placed at a custo(erEs personal co(puter &. 'etailed sales and in$entor" a!out the #astest-selling ite(s in a particular store C. Co(paniesE annual and #inancial reports and go$ern(ent docu(ents '. Custo(er in#or(ation captured #ro( salespersons %nswer: a )e$el o# 'i##icult": Mediu( +age: 1113. %FnG _____ re#ers to the (argins that a !u"er generates o$er a li#eti(e less the cost o# ser$ing the custo(er.

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

%. product li#eti(e $alue &. in$entor" inde< C. custo(er li#eti(e $alue '. chain ratio %nswer: c )e$el o# 'i##icult": *as" +age: 114 1?. .hich o# the #ollowing is true o# co(petiti$e intelligence s"ste(s0 %. It is an outlawed approach o# anal"/ing in#or(ation a!out co(petitors> acti$ities. &. It in$ol$es anal"/ing the in$entor" and detailed sales reports o# stores. C. It uses online data!ases and go$ern(ent docu(ents as its source o# in#or(ation. '. It allows the e##ecti$e capture o# custo(er intelligence #ro( salespeople. %nswer: c )e$el o# 'i##icult": Mediu( +age: 115 -0. 6he design collection anal"sis and reporting o# stud" intended to gather data pertinent to a particular (arketing challenge or situation is re#erred to as _____. %. !ench(arking &. (arketing research C. (arketing ("opia '. (arketing (i< %nswer: ! )e$el o# 'i##icult": *as" +age: 115 -1. .hat is the #irst step in the (arketing research process0 %. 5eporting results to the decision (aker &. Identi#"ing (anagerial pro!le( and esta!lishing research o!7ecti$es C. Collecting and anal"/ing data '. 'eter(ining data sources t"pes o# data and research approaches re2uired %nswer: ! )e$el o# 'i##icult": Mediu( +age: 11@ Essay Questions --. 'iscuss the li(itations o# statistical (ethods o!ser$ations and sur$e"s. %nswer: 6he (ost i(portant li(itation o# statistical (ethods is that the" generall" assu(e that the #uture will look $er" (uch like the past. =o(eti(es this is not the case. I# product or (arket characteristics change statistical (odels used without ade2uate 7udg(ent (a" not keep pace. For new-to-the-world products howe$er o!ser$ation is t"picall" not possi!le and secondar" data are not a$aila!le since the product o#ten does not "et e<ist e<cept in concept #or(.
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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

=ur$e"s and #ocus groups possess i(portant li(itations howe$er. For one what people sa" is not alwa"s what people do. Consu(er sur$e"s o# !u"er intention are alwa"s hea$il" discounted to allow #or this #act. =econd the persons who are sur$e"ed (a" not !e knowledgea!le !ut i# asked #or their opinion the" will pro!a!l" pro$ide it. 6hird what people i(agine a!out a product concept in a sur$e" (a" not !e what is actuall" deli$ered once the product is launched. )e$el o# 'i##icult": Mediu( +age: 113B1-0 -1. &rie#l" e<plain the adoption process and the rate o# adoption. %nswer: 6he adoption process in$ol$es the attitudinal changes e<perienced !" indi$iduals #ro( the ti(e the" #irst hear a!out a new product ser$ice or idea until the" adopt it. ;ot all indi$iduals respond alikeH so(e tend to adopt earl" so(e late and so(e ne$er. 6he ti(e di(ension is a #unction o# the rate at which people in the target group (o$e through the #i$e stages in the adoption process. 9enerall" the speed o# the adoption process depends hea$il" on the #ollowing #actors: F1G the risk Fcost o# product #ailure or dissatis#actionG F-G the relati$e ad$antage o$er other products F1G the relati$e si(plicit" o# the new product F4G its co(pati!ilit" with pre$iousl" adopted ideas and !eha$ior F5G the e<tent to which its trial can !e acco(plished on a s(all-scale !asis and F@G the ease with which the central idea o# the new product can !e co((unicated. Other #actors while less i(portant are also at work particularl" at the indi$idual le$el including the growing in#luence o# social (edia. 6hought should also !e gi$en to the legiti(ac" o# the new product in the e"es o# its stakeholders. )egiti(ac" (a" co(e #ro( associations with esta!lished #ir(s the success o# historical product launches or hiring a well-known na(e in the #ield. 6he rate at which an inno$ati$e new product categor" passes through the adoption process is also a #unction o# the actions taken !" the product>s (arketers. 6hus the di##usion process (a" !e #aster when there is strong co(petition a(ong co(petitors when the" ha$e #a$ora!le reputations and when the" allocate su!stantial su(s to 5I' Fto i(pro$e per#or(anceG and (arketing Fto !uild awarenessG. )e$el o# 'i##icult": Mediu( +age: 1-1B1-4

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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge

-4. .hat are the (a7or issues to !e considered while designing (arketing data!ases0 %nswer: 'esigning (arketing data!ases that take e##ecti$e ad$antage o# custo(er data that co(panies are in a position to collect re2uires that se$eral (a7or issues !e considered: the cost o# collecting the data the econo(ic !ene#its o# using the data the a!ilit" o# the co(pan" to keep the data current in toda">s (o!ile societ" and the rapid ad$ances in technolog" that per(it the data to !e used to (a<i(u( ad$antage. Collecting in#or(ation then storing and (aintaining it alwa"s costs (one". I# a co(pan" wants to know (ore a!out the de(ographics and li#est"les o# its !est custo(ers in addition to their purchasing histories it (ust o!tain de(ographic and li#est"le data a!out the(. 'oing so is (ore di##icult than it soundsH (an" people are unwilling to spend (uch ti(e #illing out #or(s that ask nos" 2uestions a!out education inco(e whether the" pla" tennis and what kind o# car the" dri$e. 6he cost o# collecting such in#or(ation (ust !e weighed against its $alue. )e$el o# 'i##icult": Mediu( +age: 11-

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