Deck 5: Measuring Market Opportunities: Forecasting and Market Knowledge

Question 1

Which of the following is not a valid reason for the decline in the use of live test markets?

A)They are expensive to conduct.
B)Competitors can buy checkout scanner data without bearing test marketing expenses.
C)Differences exist between what people imagine about a product in a test market and what is actually delivered.
D)Competitors engage in marketing tactics to mislead the company by distorting normal purchasing patterns in a category.

Answer 1

C

Question 2

Diffusion of innovation theory allows:

A)marketers to estimate how rapidly an innovation is likely to be adopted by the target market
B)consumers to gauge the feasibility of product acceptance within their reference groups
C)management to estimate how quickly innovation can seep into an organisational culture
D)marketers to manipulate customer attitudes from the time they first hear about the new product until they adopt it

Answer 2

A

Question 3

Which of the following observations is not applicable to the analogy approach of forecasting sales?

A)It allows for comparison of similar available historical data for any particular product.
B)It uses a behavioural approach to estimate future sales patterns and likely customers.
C)It is an approach often used to forecast the sales or market potential for a new product.
D)It allows managers to look at the sales history of earlier introductions to forecast the sales for the new product.

Answer 3

B

Question 4

Honeydew, a well-known confectionery, plans to introduce a walnut fudge candy.It asks some of its regular customers to sample it and provide their opinion.In this way, the management hopes to estimate the likely number of buyers for the product, if introduced in their store.Honeydew used the _____ method of forecasting.

A)survey
B)judgment
C)statistical
D)analogy

Question 5

'Primary data collected when cheaper and faster secondary data will do.Quantitative data collected without first collecting qualitative data.' These are examples of things that could go wrong in which step of the marketing research process?

A)reporting results to the decision-maker
B)determining data sources and types of data and research approaches required
C)designing research: type of study, data collection approach, sample, etc.
D)identifying managerial problem and establishing research objectives

Question 6

Company A uses loyalty cards to track and analyse customer buying patterns and to offer customers coupons and incentives tailored to their buying behaviour.Which of the market knowledge systems does the company use?

A)marketing databases
B)competitive intelligence systems
C)internal records systems
D)client contact and sales force automation systems

Question 7

What system of information collection best illustrates a marketing database?

A)'cookies' or electronic signatures placed at a customer's personal computer
B)detailed sales and inventory about the fastest-selling items in a particular store
C)companies' annual and other financial reports, and government documents
D)customer information captured from sales persons

Question 8

The speed of the adoption process is based upon all of the following except:

A)relative simplicity of the new product
B)ease with which the central idea of the new product is communicated
C)extent to which its trial can be accomplished on a large-scale basis
D)relative advantage of the new product over other products

Question 9

Company A is a tyre manufacturer and uses factors like the number and age of vehicles currently on the road in the country, predictions of GDP for the region and other relevant factors to forecast market potential.Which of the following methods is the one Company A uses for a more accurate forecast?

A)analogy
B)statistical method
C)observation
D)surveys

Question 10

Sales force automation software helps companies to:

A)gather and analyse information about competitors' activities and related business trends
B)disseminate real-time product information to salespeople to satisfy customer needs
C)record annual reports, other financial reports, online and government databases
D)keep track of information about which goods or services were sold from which region

Question 11

For which category of new products is the observational method of preparing an evidence-based forecast not possible?

A)new product lines
B)improvements in or revisions of existing products
C)new-to-the-world products
D)repositioning

Question 12

What term is used to refer to the size of current users who are already using a particular product at the time of forecast?

A)target market
B)penetrated market
C)market potential
D)test market

Question 13

Statistical methods are not recommended for new product managers charged with forecasting sales for a new product because:

A)here is no history in their venture on which to base a statistical forecast.
B)These methods tend not to base their assumption of the future on the past.
C)It does not include a method to forecast the impact on consumer demand of different combinations of attributes.
D)It is not based on what people actually do.

Question 14

Which of the following statements about competitive intelligence systems is incorrect?

A)It is a systematic and ethical approach for gathering and analysing information about competitors' activities and related business trends.
B)It is based on the idea that more than 80 per cent of all information is public knowledge.
C)It uses online databases, government documents, etc.as its source of information.
D)It allows the effective capture of customer intelligence from salespeople and account transfers.

Question 15

Heavy deregulation in the Australian telecommunications industry has resulted in:

A)a monopoly in which one major player controls the entire industry
B)the growth in substitute products to compete with telecommunications
C)intensified competition and 'price wars' for telecommunications products and services
D)a primary focus on augmented services such as warranties and after-sales support for telecommunications products and services

Question 16

The design, collection, analysis and reporting of research intended to gather data pertinent to a particular marketing challenge or situation is referred to as:

A)data mining
B)marketing research
C)marketing databases
D)project research

Question 17

Which of the below is not a major evidence-based method for estimating market potential and forecasting sales?

A)statistical methods
B)market tests
C)marketing plans
D)focus groups

Question 18

The late majority are individuals who:

A)adopt a new product for economic or social reasons
B)are more likely to be receptive to new ideas
C)are the most 'local' and stubbornly resist change
D)want to be sure that a new product will prove successful before adopting it

Question 19

Which of the following statements is true of the top-down approach in sales forecasting?

A)A central person or persons takes the responsibility to prepare an overall forecast.
B)Once each part of the firm prepares its own sales forecast, the parts are aggregated to create the forecast as a whole.
C)Firms can break their anticipated demand into pieces and sum the components to create the summary forecast.
D)Various combinations of market segments and/or product lines can be combined to build a business plan that looks viable.

Question 20

Nine West Retail Stores is an international operator of shoe specialty stores.Each week, all Nine West retail outlets receive information about the fastest and slowest selling items in terms of style and colour; merchandise category (e.g.dress or casual); store, area or region; and for various time periods.This is an example of the use of:

A)marketing databases
B)competitive intelligence systems
C)internal records systems
D)client contact and sales force automation systems

Question 21

Competitive intelligence is hard to come by because most of it is not available publicly and can only be obtained through the commissioning of specialised market research agencies.

Question 22

Without valid market intelligence or market knowledge to gather meaningful data that is relevant, reliable, valid and timely, market forecasting is just based on guess work.

Question 23

Under the bottom-up approach to sales forecasting, a central person, or persons, takes the responsibility for preparing an overall forecast.

Question 24

As with all forecasting methods, statistical methods have important limitations.Most important of these is that statistical methods generally assume that the future will look very much like the past.This is an example of a limitation of qualitative forecasting.

Question 25

Innovators typically account for approximately what percentage of all individuals who ultimately adopt a new product?

A)the last 10%
B)the middle 50%
C)the first 25%
D)the first 2.5%

Question 26

Every marketer, not just retailers, needs information about 'what's hot and what's not'.Fortunately, accounting systems can generally collect such data.

Question 27

There are two important keys to improving the credibility and accuracy of forecasts of sales and market potential.The first is to make explicit the assumptions on which the forecast is based.The second key to effective forecasting is to use multiple methods.
With the second key when forecasts obtained by different methods converge near a common figure, greater confidence can be placed in that figure

Question 28

The theory that seeks to explain the adoption process of an innovative product or service over time among a group of potential buyers is known as the diffusion of innovations theory which consists of five stages: innovators, early adopters, early majority, late majority and laggards.

Question 29

In Australia, the Australian Consumer and Competition Commission (ACCC) determines the ethical guidelines and legal obligations for market research agencies.

Question 30

Write a short note on the common sources of error in forecasting.

Question 31

The innovation adoption curve model indicates the rate of adoption of a new product using time of adoption as a basis for classifying individuals into five major groups: innovators, early adopters, early majority, late majority and laggards.

Question 32

What is marketing research? How is it conducted?

Question 33

If you are generally the last person amongst your social group to purchase a new product, you would be regarded as a(n) ______?<

A)laggard
B)innovator
C)learner
D)late majority member

Question 34

When estimating market potential using indices, 'BPI' stands for ______:

A)Buying Power Index
B)Best Potential Index
C)Brand Potential Index
D)Beneficial Purchasing Index

Question 35

Chain ratio calculations and indices are both examples of:

A)mathematical approaches in forecasting
B)standards used for cross-market analysis
C)approaches used to assess the generic value chain
D)systems applied in data-mining software to enable informed decision-making