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Marketing 3000 exam 1 – Mizzou

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Marketing
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is the study of exchange
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requirements of marketing
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-2 or more parties -communication
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Marketing’s first task
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discovering consumers needs (when new product fails, marketing wasn’t practiced)
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Marketing’s second task
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satisfying consumer needs -find the right combination of; Product (most important) Price (important-with similar goods) Promotion (if products & price are same) Place (vending machine)**
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What are the 4 ps
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1. Product, 2. Price, 3. Promotion 4. Place
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Functional definition of marketing
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entails the facilitation of exchanges (suggests that there are techniques that may improve the exchange process, helping businesses and customers make more efficient exchanges)
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communication
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is part of all marketing exchanges
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marketing as business philosophy
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Evolved from “self-centered” firm to an empathetic, customer-based one
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Product orientation
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focus on the efficient production of their products with no input from costumers -“if we build it, they will come”
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Sales orientation
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to sell (persuade people to buy) what is made -“just sell the damn product”
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Marketing orientation
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requires that information about the market (potential customers, trends, competitors) is collected prior to making decisions that involve the selling process (what to sell, where to sell, how much to charge, how to promote the product) -“making what is desired or wanted” rather than “selling what we make”
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marketing orientation is characterized by
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marketing orientation is characterized by
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Relationship marketing concept
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the creation and maintenance of long-term relationships with all participants (customers, suppliers, retailers) in the exchange process
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Strategic planning
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the process of developing and maintaining a strategy fit between the organizations goals and capabilities and its changing marketing opportunities
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1. conducting a situation analysis 2. developing marketing objectives 3. segmentation and selecting target markets 4. determining product position 5. designing a strategic marketing mix
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What are the 5 parts of market analysis
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1. conducting a situation analysis
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Environmental analysis- is an ongoing process of identifying external forces, analyzing them, and predicting their potential impact
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Demographics
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referring to the characteristics of a population (E.g., age, ethnicity, income, gender) (change in size or distribution)
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Economic trends
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____________ such as business cycles – periods of prosperous growth or decline (recessions) – affect almost every marketing program
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Competitive
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a substitute product is one from a different product category that can be substituted or used instead of another product
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Sociocultural
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a change in consumer taste
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Political and legal
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environments of a market are reflected in laws that regulate competition or protect consumers
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Technology
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advances, may have developments that have sweeping effects for businesses (innovations such as internet, tablets, smart phones)
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2. developing marketing objectives
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To be effective objectives need to be specific, measurable, and attainable.
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3. segmentation and selecting target markets
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-selecting target markets requires an assessment of potential demand from potential consumer segments -consumer segment must be large enough to generate enough demand to be profitable
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Market segmentation
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the process of dividing the market up into different groups of potential customers who share a common characteristic that differentiates them from other groups
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4. determining product position
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Every product should have something special about it (differential advantage) that makes a particular group of consumers select it over competing alternatives, the positioning of a product
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positioning
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refers to a product’s image in relation to competing products -based on the differential advantage or unique selling position
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-Product -Place -Pricing -Promotion
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5. Designating a strategic marketing mix
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Marketing mix
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refers to the blend of product, distribution (place), pricing, and promotion strategies, known as the “four P’s” -must be designed for each target market
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Target market
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the intended target of a particular marketing mix
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Marketing research
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the process of defining a marketing problem or opportunity, systematically collecting and analyzing information, and making recommendations based on that analysis
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Purpose of marketing research
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to aid managerial decision making, and it is the function that links the customer and public to the marketer
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Secondary data
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is information that has already been collected
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secondary data internal sources
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such as accounting data, sales reports, or various databases that the company maintains
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Government data (the census) -Magazines and periodicals (Buying Power Index, The Wall Street Journal) -Or Syndicated data services (Marketing Research Corporation of America)
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Secondary Research data includes
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-Using data already collected is almost always more cost effective -Usually has more credibility because it is often available from multiple sources and because its collection is usually independent of the firm or research interest at hand
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When possible use secondary data because
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Primary data
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is information that is collected for a current, specific purpose
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Primary data research
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1. Broad exploratory research which is performed to identify the scope of research issues 2. Descriptive research which determines the magnitude of the issues 3. Experimental research is used to narrow the issues down to a decision
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-focus group -depth interview -projective technique
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Exploritory research includes what three things?
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Focus group
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conduct an open discussion with the group about what they consider when choosing a pizza place (wants to uncover things that might not be an issue at their existing locations)
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Depth interview
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is unstructured, are conducted one-on-one to maximize the depth an individual may be questioned
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projective technique
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is an unstructured, indirect form of questioning that asks respondents to interpret the behavior of others -By answering how others act or think, respondents indirectly project their own motivations, attitudes or feelings into the situation -Useful when discussing situations that might be embarrassing to the respondent
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Descriptive research
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using surveys of students to see how students rate the importance of each issue uncovered in exploratory research
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variety of surveys (most popular)
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-Mall intercept- randomly survey people at a shopping center -Telephone -Internet -And Mail
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Experimental research
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there is a hypothesis used to create a decision rule
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Observational research
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can be personal observation -EX: Fischer Price wants to measure the preference for new toys, they could put children in the room with the toys and record how often/long they played with the toys
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Sampling
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involves selecting representative units (the sample) from a total population
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population
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includes all elements, units, or individuals that are of interest to researchers for a specific study
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Random sampling
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this provides an equal chance for each member of the population to be selected as part of the sample
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Stratified sampling
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in this technique, the population is divided into groups based on a common characteristic, then a random sample is taken from each group
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Area (geographic) sampling
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this is the same as above using geographic areas as the basis for the sample
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Functional, social, personal, experimental
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Describe benefits and costs categories
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Functional benefit
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buy and use it for something EX: learn about marketing- get course credit, Hammer, water filter
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Social benefit
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EX: cell phone, country club membership, social media EX: meet friends, business partners, etc
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fun experiences EX: have fun, joy of learning EX: football games, tailgating, concert
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Example of Experimental Benefit
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Personal benefit
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feeling good about your EX: feeling good about learning or excelling EX: makeup, working out
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Monetary, temporal, psychological, and Behavioral
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Describe each cost
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Monetary cost
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tuition and book fees
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Temporal cost
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time spent in class and studying
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Psychological cost
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stress studying for exams and listening to instructor
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Behavorial cost
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expending energy walking to class or getting sick from lectures
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What is a big part of analyzing the marketing environment
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A big part involves monitoring the external market for better trends. Examples of products that have benefited from these trends are Gyms, and organic/gluten free markets.
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1. Industry competitiveness 2. Availability of substitutes 3. threat of potential entrants 4. Supplier power 5. buyer power
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What are Porter’s Five Forces model?
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1. Industry competitiveness
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intensity of current competitors -low intensity= higher profitability -industry has low intensity when few firms are competing (more intensity=less profit) EX: only two commercial aircraft
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2. Availability of substitutes
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customers can choose different product as a substitute -few or no substitutes=higher profitability -EX: fresh veggies -> vitamins**
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3. Threat of potential entrants
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high barriers to entry= higher profitability High barriers to entry exist when… – high capital requirements – large scale to make money – high product differentiation – network externalities (technology) EX: word software, tesla
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4. Supplier power
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fewer suppliers hurt profitability because they can charge higher EX: tires Lower bargaining power when… -high number -low information
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5. Buyer power
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information effects this lower buyer power EX: medical services (low info)
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sustainable competitive advantage
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an advantage vs. competition that can be maintained consistently over time EX: McDonalds-operations, service efficiency with variety of items
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1. Market penetration- promotion, lower prices – existing products and existing markets 2. Market development- same product, new group of people 3. Product development- same market, new product 4. Diversification- new market, new product
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Intensive Growth Strategies (Ansoff’s product/market expansion grid)
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market penetration
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What type of growth strategy is it when in one particular market firm
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-syndicated research services -marketing information systems -marketing intelligence systems -non-recurring research projects
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Marketing research includes
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syndicated research services
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collecting data from consumers from some other company
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marketing information systems
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consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers -own data collecting sells people (weekly reports, recurring) (can be automatic- Mcdonalds)
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marketing intelligence systems
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-or decision support systems
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non-recurring research projects
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e.g. study of consumers perceptions toward hospital strategic alliance (not something you do every year) -study pregnant people to switch hospitals- mothers didn’t want to move to other hospital
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1. defining the problem and research objectives 2. developing the research plan 3. collect the information 4. analyze the information 5. present the findings
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What are the 5 steps of the Marketing research process?
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Good marketing research
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1. is scientific (objective) 2. is creative (# of lights on in hotel) 3. uses multiple methods (more accurate) 4. realizes the interdependence of models and data 5. acknowledges the cost and value of info 6.maintains “healthy” skepticism 7. is ethical (Important-don’t deceive the participants) not ethical- call during dinner
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market share= (individual product sales)/(total industry sales)
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% of 1 company’s or brand has in the total industry sales -add everything (including the one out)
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Demand forecasting
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estimating sales of product during future time period
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sales forecast
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a _______ is based on a specific marketing plan -expressed in dollars or product units -typically covers a 1-yr period
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estimating future demand
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-market factor analysis -survey of buyers’ intentions -past sales analysis -composite of sales force opinion -expert opinion -market test method
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market-factor analysis
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demand for a product is assumed to be related to the behavior of certain sales activity
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survey of buyer intentions
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a sample of current or potential customers are asked how much of a particular product they would buy at a given price during a specified future time period
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past sales and trend analysis***
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flat % increase applied to past volume or past volume average -economically stable -trend analysis related to progression analysis, angle is used to predict future sales
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sales- force composite
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a bottom-up method consisting of collecting estimates of sales for the future period from all salespeople
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executive judgment
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obtaining opinions regarding future sales volume from one or more executives
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test marketing
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a firm markets its product in a limited geographic area, measures sales, and then projects the company’s sales over a larger area (goes to a city to try out new product)