Question 1

Companies assume that the lower the product-penetration percentage, the lower will be the market potential.

Accepted Answer

Companies often view a lower product-penetration percentage as an indication of higher market potential, suggesting that there are more customers in the market who could be reached or who have yet to purchase the product.

Question 2

In order to estimate future demand, companies commonly prepare a company sales forecast first, followed by an industry forecast, and finally a macroeconomic forecast.

Accepted Answer

Companies typically start with a macroeconomic forecast to understand the overall economic environment, then an industry forecast to gauge sector-specific trends, and finally, they prepare a company sales forecast to predict their own sales based on broader economic and industry insights.

Question 3

What does total market potential mean? How can it be estimated?

Accepted Answer

The answer of What does total market potential mean? How...

Question 4

How does the marketing environment determine the position of the market demand function?

Accepted Answer

The answer of How does the marketing environment determine the...

Question 5

Suppose Redbus, a player in the small car market, is planning to launch its new range of hybrid cars. It decides to estimate the future demand for its new car before launching it in the market. If interviewing consumers is not practical, what alternative technique might it resort to?

Accepted Answer

The answer of Suppose Redbus, a player in the small...

Question 6

If the ratio between current and potential levels of market demand is close to one, what can you infer about the industry's market-penetration index and the growth potential of the firms in the industry?

Accepted Answer

The answer of If the ratio between current and potential...

Question 7

Suppose the Belgian government prohibits sale of cigarettes to people below 20 years of age. Who are likely to comprise the qualified available market for Dunhill, a manufacturer of herbal cigarettes in Belgium?

Accepted Answer

The answer of Suppose the Belgian government prohibits sale of...

Question 8

Suppose the brand development index of the detergent manufactured by Fasclean in Boston is 90 and in Austin is 48. Compare the marketing opportunity of Fasclean detergent in the two cities.

Accepted Answer

The answer of Suppose the brand development index of the...

Question 9

Forecasting is the art of anticipating what buyers are likely to do under a given set of conditions.

Accepted Answer

Forecasting involves using past data and trend analysis to estimate what buyers are likely to do in the future under certain conditions. It is an important tool in business planning and decision-making.

Question 10

Suppose a cotton-textile company wants to estimate the area market potential for its high quality fabrics in Houston. List the possible steps that the marketers will follow to compute the area market potential.

Accepted Answer

The answer of Suppose a cotton-textile company wants to estimate...

Question 11

Suppose 100 million people consume black tea every year, and an average consumer consumes 8 kgs of tea at an average price of $3 per kg. Compute the total market potential for tea.

Accepted Answer

The answer of Suppose 100 million people consume black tea...

Question 12

Two major methods of computing area market potential are market build-up method and multiple factor-index method. Which of these methods will Nexus Enterprises, a manufacturer of auto parts implement to estimate its market potential?

Accepted Answer

The answer of Two major methods of computing area market...

Question 13

Simpsons, a manufacturer of air conditioners, finds that its sales potential is less than its market potential even when it spends a sufficient amount on advertisements and after sale services. What is the basic reason behind such an observation by the marketers of Simpsons?

Accepted Answer

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Question 14

Briefly describe the methods of forecasting future demand on the basis of past sales.

Accepted Answer

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Question 15

Sales reps might have better insight into developing trends than any other group, and forecasting might give them greater confidence in their sales quotas and more incentive to achieve them.

Accepted Answer

Sales reps are on the front line interacting with customers and potential buyers, so they have the opportunity to gather valuable information about consumer behavior and industry trends. Forecasting based on that information can give them a clearer understanding of what to expect and a target to work towards, increasing their motivation to meet or exceed their goals.

Question 16

Market demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

Accepted Answer

The definition of market demand includes all of these specific factors.

Question 17

The market forecast shows expected market demand, not maximum market demand.

Accepted Answer

The market forecast predicts the expected demand based on various factors such as market trends, customer behavior, economic factors, etc. It does not predict the maximum demand that a market can have.

Question 18

Organix Internationals LLC is planning to introduce its new range of breakfast cereals. List the different product levels that it considers while formulating the demand estimates for the new product.

Accepted Answer

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Quiz 3: Collecting Information and Forecasting Demand