Deck 13: Turning Customer Information Into Sales Knowledge

Question 1

A manufacturer makes drywall.When tax rates are cut,a housing boom begins,and demand for drywall goes up fourfold.This is an example of:

A)derived demand
B)artificial demand
C)line demand
D)a pure economy
E)a free market economy

Answer 1

A

Question 2

The second step in the CDI process,which makes the data useful to others,involves:

A)gathering the data initially
B)analyzing the data with software
C)creating forecasts
D)setting sales goals
E)cleaning and formatting data to company naming and categorizing standards

Answer 2

E

Question 3

Customer knowledge competence is important for companies because inadequate knowledge of customers and what they want can result in:

A)greater sales of products
B)overestimates or underestimates of sales,which can cost the company money and opportunity
C)competitive advantage in certain product categories
D)poor analysis of past sales trends
E)inaccurate market research for the industry

Answer 3

B

Question 4

What can a company do when the data they have about customers is in a format that is not accessible to all the people who need to have access to it?

A)A company can give the data to a third-party vendor who will analyze it.
B)A company can reformat the data and print hard copies of it to distribute to those who need it.
C)A company can designate one person from each department as the CDI liaison,and give that person access to the CDI information for the department.
D)A company can do company-wide trainings on the CRM software system so those who don't know how to use the system can learn.
E)A company can create a data mart especially for their customer data to give access to those who need it.

Question 5

Many consumers will buy more of a product if its price goes down,and less of a product if its price goes up.This is referred to as:

A)macroeconomics
B)elasticity
C)inelasticity
D)reward theory
E)trend analysis

Question 6

In addition to accurate customer data,what do companies need in order to have customer-knowledge competence?

A)accurate salesperson data
B)CDI software
C)a data mart
D)people to analyze the data
E)products to sell

Question 7

Customer data integration (CDI)refers to:

A)a group within the research department that specializes in gathering and analyzing data
B)a software system that gathers and analyzes customer data
C)a set of rules for the process of gathering data on customers and making it useful and available
D)the process of creating sales forecasts
E)a theory of management science

Question 8

Why is it important for manufacturing departments to have accurate customer-knowledge data?

A)Accurate customer-knowledge data gives them ways to set accurate sales goals.
B)Accurate customer-knowledge data helps them develop better products
C)Accurate customer-knowledge data tells them how much to manufacture.
D)Accurate customer-knowledge data allows them to extend the proper amount of credit to customers.
E)Accurate customer-knowledge data prepares them to hire employees when the company needs to grow.

Question 9

All of the following factors can affect demand EXCEPT:

A)inelastic demand
B)laws and regulations
C)social factors
D)demographic trends
E)economic factors

Question 10

Trend analysis predicts future sales by:

A)looking at how well the competitors are doing
B)multiplying past performance by a factor of 1.06
C)averaging the performance over the past few periods and using that to predict the next period's sales
D)using benchmarks to track how far this period's sales will exceed the previous period's sales
E)examining past sales trends and extrapolating that information into the future

Question 11

Sales potential refers to the portion of:

A)the sales forecast dealing with a particular product category
B)the sales forecast that can be determined from external data
C)a company's customer base that will buy a new product
D)the total market potential dealing with one industry
E)the total market potential that an individual company can achieve

Question 12

The knowledge salespeople gain from interacting with customers needs to be shared with other departments in the company so that:

A)the knowledge can be used to develop products,create marketing campaigns,and sell more products to more accounts
B)salespeople can receive credit for performing customer service tasks
C)the CRM system will be populated correctly
D)management can integrate the different departmental computer systems
E)customers can be treated equally well by any employees they come into contact with

Question 13

"Chinese Marketing" refers to the practice of:

A)selling products to a consumer base that is uninterested in the products
B)international marketing efforts that show insensitivity to the people and culture of the country
C)manipulating sales figures to reflect the potential sales in a region or territory instead of the actual sales in a region or territory
D)thinking mistakenly that the number of individuals in a market is the same as the number of possible total sales in a market
E)calculating international sales in the currency of the local region instead of in the currency of the company that is making the sales

Question 14

The first step in the CDI process,gathering data,can be:

A)simple,as all the data should already be in the CRM system
B)simple,as it mostly consists of external market research
C)simple,as the shipping and accounting data does not need to be included
D)difficult,because it needs to come from so many different sources by many different methods
E)difficult,because the salespeople will not want to share the information they've gathered about customers

Question 15

A company that wants to boost company stock prices or prevent stock prices from falling can engage in which unethical activity?

A)insider trading
B)bribery
C)making false sales forecasts
D)racketeering
E)paying phantom employees

Question 16

The sales forecast is a portion of the sales potential which is:

A)larger than the market potential for an industry
B)larger than the market potential for a product category
C)a portion of the market potential for a product category
D)a portion of the market potential for an industry
E)predicted by the industry trends

Question 17

When a marketing department has access to customer data about current products and services,it enables the department to:

A)understand the relationship between the marketing and sales departments
B)create campaigns that tap into the preferences and desires of customers
C)recommend product improvements to the product development department
D)continue the current campaigns they are conducting
E)justify the expenses they department incurs

Question 18

A sales forecast is a function of several different:

A)financial estimates
B)industry trends
C)trend analyses
D)data integration measures
E)market potentials

Question 19

The industry-wide sales expected for a certain product for a certain time period is called:

A)total revenue
B)market potential
C)market push
D)net receipts
E)sales potential

Question 20

In which of the following situations is trend analysis LEAST appropriate?

A)Your company did a major product revision five years ago,and is not expected to do another one for another five years.
B)The research and development team is introducing a new process that manufactures your product much more economically,but the new materials used in the process are more expensive,so the price of manufacturing the product will remain the same as it has been.
C)Your product has been the industry standard for the last 20 years,and you are ahead of your competitors in making improvements that keep the product synced with current technology.
D)A competitor suddenly introduces a product that has twice the capacity of your company's main product at two-thirds of the price.
E)The population of your company's customer area has been increasing by a rate of 4% each year for the previous five years,and is expected to maintain this same rate of growth for the next five years.

Question 21

In order to account for the different levels of importance of different kinds of trends,a company can use:

A)a combination goals sheet to figure the weight of each trend
B)regression analysis to weight different factors differently
C)CRM software to analyze how customers interact with the trends
D)expert opinion to guide the weighting of some figures over others
E)competitors' forecasts to guide their weighting of different data

Question 22

Despite the fact that customer surveys are done on a company's own customers,they are still better at forecasting:

A)revenues,not sales
B)returns,not sales
C)sales from new customers
D)sales for the company's competitors
E)market potential than sales potential

Question 23

Trend analysis looks at the way a company's products have sold,while correlational analysis looks at:

A)the way a company's products will sell in the future
B)the average of the sales trends over the previous few sales periods
C)the effects of exponential smoothing
D)the trends of variables that are related to the product
E)sales forecasts for competing products

Question 24

What are the characteristics of the cities that are the best sites for market tests?

A)They are near a source of water,such as a lake,river,or ocean.
B)They have a population of between 100,000 and 500,000 residents.
C)They have demographics very similar to the demographics of the entire United States.
D)They have taken a census within the previous decade.
E)They have centers set up in which residents can test new products and services.

Question 25

Forecasting sales in some foreign countries is often difficult because of:

A)trade barriers such as tariffs and customs duties
B)short supply chains
C)instability of markets,systems,and governments
D)cultural bias
E)language barriers

Question 26

A sales force composite forecast may be extremely accurate:

A)in the short term and the long term
B)in the short term,but not the long term
C)in the long term,but not the short term
D)only if it is made by sales managers,not salespeople
E)as an internal measure only

Question 27

A moving average is similar to trend analysis,but with the difference that:

A)a trend analysis is a more complicated calculation than a moving average
B)a trend analysis tells what will happen while a moving average tells what has happened
C)a moving average tells what will happen while a trend analysis tells what has happened
D)a moving average relies on exponential smoothing,while a trend analysis looks at the straight numbers
E)a moving average looks at the average of the rate of change for the previous few periods,while a trend analysis looks at the straight numbers for each period

Question 28

One negative effect of using sales forecasts to dictate sales quotas for sales departments is that:

A)salespeople have not seen the forecasts and won't understand how to interpret them without guidance
B)executives do not understand the methods used to calculate the forecasts
C)executives may underestimate the skills of the salespeople and set the quotas too low
D)sales managers may deliberately forecast lower numbers than they actually predict they will achieve
E)sales managers may inflate their sales forecasts to look good to management

Question 29

Measures that predict how much customers and businesses will spend help forecast sales by:

A)forecasting how much total will be spent in different categories,so companies can calculate what percentage of that spending they can capture
B)giving a historical picture of how much those customers and businesses have spent with the company
C)providing points of comparison between business and retail customers that allow companies to predict sales from one based on sales from the other
D)basing predictions on figures that move as soon as market forces move
E)predicting whether the economy will get stronger or weaker in general

Question 30

In cases in which rapid change occurs in a market or with a company,sales forecasts will be more accurate if they are based on:

A)customer spending correlates
B)both executive and expert opinion
C)as many methods as possible
D)the industry as a whole,not just the sector the company is part of
E)similar historical periods

Question 31

Some best practices for making sales forecasts are to use as many different calculation methods as possible,and:

A)calculate the forecasts as quickly as possible
B)run them through at least three different regression analysis calculations
C)come up with one central model and prepare for that
D)limit the information you use so you don't confuse the trends
E)use as much information from segments of your market as possible

Question 32

A variable that predicts what will happen with the sales of another product is referred to as that product's:

A)dependent
B)predecessor
C)leading indicator
D)moving average
E)response model

Question 33

Companies that understand the process of sales forecasting use the figures they calculate with the understanding that these figures are more accurate:

A)over the short-term than over the long-term
B)as correlations than as predictors
C)when combined with other figures,like the consumer price index and measures specific to the company's industry
D)as internal information than as public information
E)when converted into sales goals

Question 34

The relationship between a sales forecast and sales force quotas should be:

A)a direct relationship,with quotas pegged to forecasts
B)a direct relationship,with quotas set 10% above forecasts
C)a direct relationship,with quotas set 5% below forecasts
D)no direct relationship,with forecasts used for informational purposes
E)no direct relationship,with quotas decided by managers who have not seen the forecasts

Question 35

Executive and expert opinions are:

A)inherently useless
B)based on speculation,not expertise or experience
C)a recent trend in forecasting that have not yet been evaluated objectively
D)important parts of a forecasting mix,but not reliable as the only forecasting method
E)more reliable than other methods of forecasting

Question 36

While market tests can give companies valuable information about the way the market will react to a product,a huge downside of market testing is that:

A)there are outside firms that can help companies run their market testing programs
B)competitors will see the product before it is officially released and can take action to compete with it
C)it shows how real people will react to your product
D)it gives developers a chance to correct problems with the product before it is released officially
E)it must be performed before a product is officially released to the public

Question 37

There is no way a sales forecast can be accurate if the information it is based on:

A)goes through a regression analysis
B)is inaccurate,biased,or only partially true
C)was collected over a long period of time
D)is provided by salespeople themselves
E)comes from external sources

Question 38

Response models are a way companies have to look at how customers have responded to various:

A)sales and marketing strategies
B)products and services
C)economic upswings and downturns
D)fiduciary pressures
E)market forces

Question 39

Even if a company has accurate sales forecast information calculated from multiple methods and based on solid data,the company should:

A)rely on expert opinions to dictate company actions
B)stockpile product in case they need to ship a large order
C)inform salespeople that there will be workforce reductions if salespeople do not meet quotas
D)ignore this information and prepare for the worst
E)prepare for multiple possible scenarios so it can react to whatever happens in the market

Question 40

Companies that engage in the process of forecasting sales must commit to:

A)accuracy,even when the forecast is negative
B)neutrality,by excluding any information that might cause deviations from the sales trends for previous years
C)sharing the sales forecasts with competitors in exchange for access to the forecasts of those companies
D)setting sales goals based on these forecasts
E)full disclosure of these forecasts to the SEC

Question 41

A best practice for making sales forecasts is to choose one method and stick with it over the long-term.

Question 42

Customer data integration is a software system that stores and gives access to customer data for an organization.

Question 43

What is the difference between a trend analysis and a moving average?What is exponential smoothing?

Question 44

Explain the concept of elasticity of demand.What is inelastic demand?

Question 45

The human resources department needs access to customer data so it can hire the right number of people as the company expands.

Question 46

What are reasons that a company would lie about a sales forecast and inflate it artificially? What are the consequences when these lies are discovered?

Question 47

Sales and marketing are the only two departments that need to have access to and understand customer data.

Question 48

Sales forecasts should be based on one of many available methods of analysis.

Question 49

After an organization acquires the customer data,it must clean up the data.

Question 50

In addition to good data,a company needs people to analyze that data.

Question 51

Explain what spending correlates are,and how they can be used to help create a sales forecast.

Question 52

What are the two time series analysis techniques? Explain them,and explain what a leading indicator is.

Question 53

Sales potential is a subset of a sales forecast is a subset of market potential.

Question 54

List the five external factors that affect market potential and briefly outline what their influence on the potential is.

Question 55

Which departments in a firm use a sales forecast and customer data?

Question 56

Sales forecasts tend to be less accurate over the long-term than over the short-term.

Question 57

Explain the relationship between market potential,sales potential,and a sales forecast.

Question 58

What are the four steps in the customer data integration process? Explain each one briefly.

Question 59

Companies who inflate sales figures in reporting often do it because they do not want stock prices to drop.

Question 60

What is a benefit of doing market testing? What is a caution about doing market tests,and what are the characteristics of a good location for a market test?

Question 61

What can compromise a sales forecast? In what situations are sales forecasts most likely to be accurate?

Question 62

What role should opinions--executive and expert--play in creating a sales forecast?

Question 63

What are some of the unique challenges of forecasting sales in certain foreign countries?

Question 64

Since sales forecasts are not guaranteed to be accurate over the long-term,how can firms use sales forecasts in a useful way?

Question 65

What should the relationship between sales forecasts and quotas be?