Question 1

The distance between the market minimum and the market potential shows the overall ________.

Accepted Answer

The distance between the market minimum and the market potential represents the total potential demand in the market, and the marketing sensitivity of demand refers to how responsive consumers are to changes in the marketing mix (product, price, promotion, and place). Therefore, the distance between the market minimum and market potential is an indicator of how sensitive consumers are to the marketing mix and can help a firm forecast demand and adjust their marketing strategies accordingly. The other choices (B-E) do not directly relate to the concept of market potential and sensitivity.

Question 2

The base sales of an organization that takes place even without any demand-stimulating expenditures is called ________.

Accepted Answer

The base sales of an organization that takes place even without any demand-stimulating expenditures is called market minimum. It refers to the minimum level of sales that occurs without any promotional or marketing efforts.

Question 3

________ is the company's estimated share of market demand at alternative levels of company marketing effort in a given time period.

Accepted Answer

The answer of ________ is the company's estimated share of...

Question 4

Which of the following organizations is likely to use the multiple-factor index method to estimate the market potential?

Accepted Answer

The answer of Which of the following organizations is likely...

Question 5

During recession, the market demand curve which is a function of marketing expenditure ________.

Accepted Answer

During a recession, consumers tend to have less disposable income, which leads to a decrease in purchasing power. Therefore, the market demand curve shifts downward, regardless of marketing expenditure.

Question 6

Suppose an individual buyer purchases three pairs of shoes each year at $50 each pair and that there are 50 million such consumers in the economy. Compute the total market potential for shoes.

Accepted Answer

The answer of Suppose an individual buyer purchases three pairs...

Question 7

A ________ is a conservative estimate of the expected volume of sales, primarily for making current purchasing, production, and cash flow decisions.

Accepted Answer

A sales budget is typically created for the upcoming fiscal year and is a projection of sales revenue based on historical data, market trends, and other factors. It is used as a guide for making purchasing, production, and cash flow decisions. A company sales forecast, on the other hand, is a broader projection of expected sales over a longer term and is used for strategic planning purposes. Sales quotas are individual goals set for salespeople to incentivize them to meet targets, while company sales potential refers to the total amount of sales a company could potentially achieve in a given market. Market potential is an estimate of the total sales volume that could be generated by all companies in a particular market.

Question 8

A low market-penetration index indicates ________.

Accepted Answer

A low market-penetration index means there is still a large potential market that has not been reached by any firm. This indicates substantial growth potential for all firms to expand their customer base and increase market share.

Question 9

Which of the following is true of the various elements of the multi-factor index method of estimating area market potentials?

Accepted Answer

The weights in the buying-power index in the multi-factor index method are somewhat arbitrary. The other statements are either wrong or do not pertain to the multi-factor index method.

Question 10

________ is the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.

Accepted Answer

The concept described in the question is known as market potential, which is the maximum level of sales that could be achieved by all firms in a given industry in a specific market environment and time period. As marketing expenditures increase, the demand for the product will increase until it reaches a point where further increases in marketing expenditures will not result in any significant increase in demand, which is the market potential. Therefore, the correct answer is E) Market potential.

Question 11

For which of the following categories of products will demand forecasting be easiest?

Accepted Answer

Demand forecasting for goods produced in an oligopoly market will be easiest because there are only a few dominant firms in the market and they have a greater control over the supply and demand of the product. The competition is limited and the firms can predict the behavior of the other firms, making it easier to forecast demand.

Question 12

An efficient method of estimating area market potentials makes use of the ________, developed by the U.S. Bureau of the Census in conjunction with the Canadian and Mexican governments. It classifies all manufacturing into 20 major industry sectors and further breaks each sector into a six-digit, hierarchical structure.

Accepted Answer

The North American Industry Classification System (NAICS) is the system developed by the U.S. Bureau of the Census in conjunction with the Canadian and Mexican governments. It classifies all manufacturing into 20 major industry sectors and further breaks each sector into a six-digit, hierarchical structure. This makes it an efficient method of estimating area market potentials.

Question 13

The sales goal set for a product line, company division, or sales representative of an organization is called ________.

Accepted Answer

A sales goal set for a product line, company division, or sales representative of an organization is called a sales quota. A sales budget refers to the financial plan for a company's sales function, while a company sales forecast is an estimate of future sales. Company sales potential and market potential refer to the total possible sales for a company or a market, respectively.

Question 14

Only one level of industry marketing expenditure will actually occur. The market demand corresponding to this level is called the ________.

Accepted Answer

The answer of Only one level of industry marketing expenditure...

Question 15

________ is the sales limit approached by company demand as company marketing effort increases relative to that of competitors.

Accepted Answer

Company sales potential is the sales limit that a company can achieve based on its own marketing efforts, regardless of market demand or competition. As the company increases its marketing efforts relative to competitors, it can approach this sales limit.

Question 16

A company can expect to expand its market share to a large extent when ________.

Accepted Answer

The answer of A company can expect to expand its...

Question 17

Suppose Concrete Express, a cement manufacturing firm, finds that its sales have increased by 3 percent this year, while industry sales have increased by 5 percent. This implies that ________.

Accepted Answer

Concrete Express's sales have increased by 3% while the industry sales have increased by 5%. This means that Concrete Express is gaining sales at a slower rate than the industry, indicating that it is losing its relative standing in the cement industry.

Question 18

________ is the maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions.

Accepted Answer

Total market potential is the maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions. Company demand and sales quota refer to specific sales targets set by individual firms, while company sales potential is the maximum sales a particular firm can achieve. Market demand refers to the total quantity of a product that consumers are willing and able to purchase at a given price level, regardless of the number of firms in the industry.

Question 19

The ________ method of determining area market potential calls for identifying all the potential buyers in each market and estimating their potential purchases.

Accepted Answer

The market-buildup method involves identifying all potential buyers in a market and estimating their potential purchases. Group-discussion and market-test methods are not related to determining market potential. Brand development index and multiple-factor index are methods used for measuring brand strength and market potential but do not involve identifying potential buyers and estimating their purchases.

Question 20

A company's sales potential would be equal to market potential if ________.

Accepted Answer

Sales potential refers to the maximum amount of sales a company can achieve in a given market. Market potential, on the other hand, refers to the total size of the market in terms of potential sales. If a company were to capture 100 percent market share, its sales potential would be equal to the market potential. Therefore, option E is the correct choice.

Quiz 3: Gathering Information and Scanning the Environment