Marketing Essentials

Pratibha Gupta IIPM-BBA 8.10.10

Introduction
Meaning and Pervasiveness of Marketing ² Marketing deals with identifying and meeting human and social needs. Marketing is ´Meeting needs profitablyµ

Marketing is an organizational function and a set of process for creating ,communicating an delivering value to customers and for managing customers relationships in ways that benefit the organization and its stake-holders.

Exchange and Transaction What is Marketed ? Who Markets ? .Nature and Scope of marketing Here we cover all the points which are included in complete Marketing Process.

this is the end stage of Exchange. .Exchange an Transaction Exchange is the process of obtaining a desired product from someone by offering something in return Transaction is trade of values between two or more parties.

What is Marketed (1) Goods (2) Services (3) Events (4) Experience (5) Persons (6) Places (7) Properties (8) Organizations (9) Information (10) Ideas .

Who Markets
Marketer Marketer is someone who seeks response( attention, a purchase, a vote, a donation) from another party called Prospect.

Marketer are skilled in stimulating demand for a company·s product They have task ² ´demand managementµ

demand states are possible       

Negative demand ² (A) channels Non existing demand ² Noise absorber Latent demand ² Environment regulator declining demand ² Fashion apparel Irregular demand - medicine Full demand ² FMCG Overfull demand ² Movie ticket for 3 idiots Unwholesome demand - Drugs

Market Marketers use the term ´Marketµ to cover various grouping of customer. As ² Resources market Manufacturer market Intermediary market Consumer market Government market .

Goods are sold to industries as raw materials (c) Global Markets.selling goods out of parental country (d) Nonprofit and Governmental Markets.Key Customer Markets    (a) Consumer Markets.where goods goes to the user (b) Business Markets.Customers have limited purchasing power .

market .Market place ² Physical Place Market space ² digital Space Meta-Market ² different interrelated businesses collectively known as Meta.

How Businesses and Marketing (In India) are changing
Changing Technology Deregulation Privatization Customer Empowerment Customization Heightened competition Industry convergence Retail Transformation Disintermediation

Marketing Philosophies
Production concept Product concept Selling concept Marketing concept

The Holistic Marketing Concept
It takes care of all the dimension which comes in between to the marketing process in any direct or indirect manner. Holistic Marketing recognizes that ´everything mattersµ

Holistic Marketing concept is based on the development. . design. an implementation of marketing programs. processes and activities that recognizes their breadth and interdependencies.

Holistic Marketing Relationship Marketing  Customer/ Channel/ Partners Product/ Price/ Place/ Promotion Marketing department/ Senior Manager/ Other department Ethics/ Environment/ Legal/ Community Integrate Marketing  Internal Marketing  Social Responsible Marketing  .

wants and interests of target markets and to deliver desired satisfaction more effectively and efficiently than competitors in a way that preserve or enhance the consumer·s and society·s well.being .Social marketing concept holds that the organization·s task is to determine the needs.

Lecture

Core concept of marketing
There are 9 core concept or bricks which make the complete structure of marketing.

1, Needs, wants and demand
Needs are the basic human requirement Needs become wants when they are directed to specific objects that might satisfy the need. Demands are wants for specific products backed by an ability to pay. Marketers create needs ??

Stand of offering in target market¶s mind set becomes the positioning.2. . Target markets. positioning and segmentation Segment is group of people share same requirement and profile. ability to serve and getting highest returns. Marketer select segment according to highest opportunity.

Offering and Brands Set of benefit put by marketer to fulfill need of marketer becomes ± offering Brand is an offering from known source .3.

service and price known as ³ customer value triad´. Judgement by customer comparing expectation with the product and service sactual performances.4. value can be seen primarily as combination of quality. Value and Satisfaction Value is perceived tangible and intangible benefits and cost to customer. .

Distribution channel C. Service channel . Communication channel B.5. Marketing channels Source to reach to target market ± A.

6. Supply chain Supply chain describes channel from raw material to component to final product that are carried to final consumer. .

7. Competition Includes all the actual and potential rival offerings and substitutes that a buyer might consider .

Macro environment B.8. Marketing environment Surrounding in which marketer works It is of 2 types ± A. Micro environment .

. Marketing planning Logical process that a company follow to fulfill need of target customers in profitable manner.9.

that surrounds.What is ´Marketing Environmentµ Factors. creates Marketing Environment. and have impact on whole marketing process directly or indirectly. .

Why scan environment .

Marketing Environment .

.

Human Resources Understanding between departments .Internal Environmental Factors ²     Factors present inside the company Affect Individual company Under managerial control E.g.

Competitors  B. Customers  . Public Pressure Group  D.External Environment Factors Micro EnvironmentPresent outside of the company  Affect Individual company  Under Managerial control Includes  A. Suppliers / distributors  C.

Technological  4. Socio-Culture  5. Global  . demographic  3.Macro EnvironmentPresent Outside of company  Out of managerial control  Affect not only individual company but all industry Includes  1. Political / Legal  6. Economic  2.

Decrease purchase power Should be countered by assuring product and services are produced effectively . Economic Forces IncomeAbility to spend Product on which customer will spend vary Dual income families have high demand for life-style and luxury products InflationAn increase in price without corresponding increase in wages.1.

production.Recession ± period of economic activity when income. Interest Rate ± Higher interest rate decrease new business opportunities and vice versa. Lower interest rate is one sure way to spur consumer purchase Exchange Rate ± Export is more profitable when the currency of the export country is weaker than the currency of importing country. . and employment tend to fall.

Technological Factors The economy¶s growth rate is affected by how many major new technologies are discovered.2. Marketers should monitor ±     Accelerating pace of change Unlimited opportunities for innovations Varying R&D budgets Increased regulation of technical change .

Socio-Cultural Factors Values Time-Starved Customers Multiple Lifestyles The changing structures of families .3.

Demographic Factors World wide population growth Population age mix Educational group Household pattern Geographical shift in population .4.

Political/Legal Environment Composed of laws. political agencies an pressure groups E.5. Ban on selected products Recycling law American subsidiaries Singur ± TATA case .g.

6. Nature Environment Shortage of raw material Increase energy cost Anti-pollution pressure Changing role of government .

competitors ± in terms of pricing. Competitor may offer same product to cater customer need or can come with improved or complete new product. So. service offered.Competitive Environment The competitive environment consists the number of competitors a company faces. new product developed. the relative size of competitors. and the like ± represent an environmental force that managers must monitor and to which they must be prepared to respond . and the degree of interdependence within the industry.

Competition may get intense because of (A) Globalization (B) Technology improvement (C) Changed buying behavior / attitude .

Stake Holder .

the more influence manager will have on organizations outcome.  .Stake-Holders ±  Any constituencies in the organization¶s environment that are affected by the organization¶s decision .these groups have a stake in or are significantly influenced by what the organization does. In turn these group can influence organizations The more obvious and secure relationship manament share with stake holders.

. Identify there interest with organization  3. Identify how critical each stake holder is and how uncertain the external environment is.Because relationship with stake holders  Improve predictability of environmental changes  More successful innovations How can these relationships be manage?  1. identify stakeholders  2.

STP S ± Segmentation T ± Target P .Positioning .

S .Segmentation A market segment consists group of customers who share a similar set of needs and wants. .

Levels of market segment Mass marketing Segmentation Niche marketing Local marketing Customization .

Basis for Segmentation Geographic Demographic Psychographic Behavioral .

Geographic Segmentation Call for dividing the market into different geographical units such as nations. or operate in all but pay attention to local variation. The company can operate in one or few areas. . countries. cities or neighborhood. states. regions.

Demographic Segmentation Age and life stage Gender Income Generation Social class .

Buyers are divided on basis of ±    Personality trait Lifestyle Value .Psychographic Segmentation Psychographics is the science of using psychology and demographics to better understanding of customer.

Behavioral Segmentation Decision roles Behavioral variables .

Decision Roles      Initiators Influencers Deciders Buyers Users .

Behavioral Variables        Occasions Benefits User status Usage rate Buyer readiness stage Loyalty status Attitude .

Market segment must be Measurable Substantial Accessible Differentiable Actionable .

Targeting Single segment concentration Selective specialization Product specialization Market specialization Full market coverage .T .

What is CRM CRM is a process of managing detailed information about individual customers and carefully managing all customer ³Touch Points´ to maximize customer loyalty. 61 .

of Loyal Customers = Higher profit and less efforts Why will customer be loyal? When we will provide him a profitable deal. Higher the no. 62 .Why do we require Loyal Customers? Acquiring new customer can cost five times more than the cost involved in retaining a current customer.

63 .Total Customer Satisfaction Satisfaction is a person¶s feeling of pleasure or disappointment resulting from comparing a product¶s perceived performance ( or outcome ) in relation to his or her expectations.

64 . customer is dissatisfied If performance exceeds expectations.If performance falls short. customer is highly satisfied or delighted.

Interact 4.Building customer relationship Relationship building process has 4 stages ± 1. Identify 2. Differentiate 3. Customize 65 .

preferences etc. This includes their names.. habits.Identify This step requires the company to locate and contact a large no of its customers directly and know as much detail about them as possible. addresses. phone no. account details. 66 .

67 .Every interaction with the customer through any channel should be seen as an opportunity to learn about them and this knowledge has to be used to serve them better.

68 . The more valuable customers are.Differentiate Customer can be differentiated on the basis of the value they represent and also on their needs. the more the company should be interested in retaining them.

through formal surveys. telephone interaction or self service channel like web. use service or even when they make complain. Can be done while customer make purchase.Interact The purpose of interaction is to learn more about customers starting with more valuable customers. 69 . call centers or ATM.

Customize Customization is done on the basis of what customer has indicated during his interaction. 70 . it improves the ability to fit the product and service to this customers exact need.

or organizations and the processes they use to select. secure.The study of individuals. use. or ideas to satisfy needs and the impacts that these processes have on the consumer and society . and dispose of products. groups. experiences. services.

studying consumer behavior should make us better consumers.There are four main applications of consumer behavior The most obvious is for marketing strategy²i.. . for making better marketing campaigns A second application is public policy Third application which is Social marketing involves getting ideas across to consumers rather than selling something As a final benefit.e.

Why do people shop? .

1. Physical activity 1f. Sensory stimulation . Role playing 1b. Diversion 1c. Self-Gratification 1d.Personal motives       1a. Learning about new trends 1e.

Peer group attraction 2d.2. Social experience outside home 2b. Status and authority 2e. Pleasure bargaining .Social motives      2a. Communication 2c.

Age 1c. Income . Gender 1b.Factors affecting consumers decision making 1. Occupation 1d.Demographic       1a. Education 1e. Family size 1f.

Perception 2c. Learning 2d. Attitude 2e. Motives 2b.2. Psychological factor      2a. Personality .

Sub-Culture. Social class . Social environment 3c.3. Physical environment 3b. Environmental factors    3a.

Nature of occupation 4c. Activities and interest 4b. Availability of leisure .4. Life-style    4a.

Consumer decision process Need recognition Information search Evaluation of alternatives Purchase decision Post-purchase decision .

Marketing Research is the systematic design. . collection. .Formal studies of specific problems and opportunities. analysis and reporting of data and findings relevant to a specific marketing situation facing the company.Marketing Research .

Informations are gathered from these respondents repeatedly .thus it is possible to track changes within the same set of audience over a period of time .Types of marketing research ±   Ad-hoc research ± focused on specific marketing problem and collect data at one point in time from one sample of respondents Continuous research interview ± The same respondents are interviewed repeatedly.

Marketing Research process .

Developing the research plan Cost Data source   Primary Secondary Observational research Focus-Group research Survey research Experimental research Research approach     .

Research instruments   Questionnaire Mechanical Instruments Sampling Unit ± Who is to be surveyed Sampling Size ± How many ppl shd b surveyed Sampling procedure ± How shd the respondents be chosen Sampling Plan    .

Contact method    Mail questionnaire Telephone interview Personal interview Arranged interview Intercept interview .

Lecture .

Product Life Cycle Introduction ± a period of slow sales growth as the product is introduced in the market. . Profits are non-existent because of heavy expenses on product introduction Growth ± a period of rapid market acceptance and substantial profit improvement.

Profits stabilize or decline because of increased competition. .Maturity ± a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Decline ± sales shows a downward drift and profit erode.

Addition to existing Product line 4. . Cost reductions. New Product Line 3.New product development Categories of New products ± 1. Improvement and revisions of existing product 5. Repositioning 6. New ± to ± the world 2.

Steps for New Product Development Idea generation Idea screening Concept development and testing Marketing strategy development Business analysis Product development Market testing Commercialization .

Product A Product is anything that can be offered to market to satisfy a want or need. .

Product Levels: Core Benefit Basic Product Expected Product Augmented Product Potential Product .

Dark Colour.Core benefit ± Warmth Basic Product ± Sweater Expected Product ± Soft. Sweater Augmented Product ± Free scratch card Potential Product ± Shawl with 50% discount .

Consumer goods classification C. Durability and Tangibility B.Product Classification A. Industrial goods classification .

.A. Soap etc. variable and perishable. Hair cut. Durable Goods ± House. Durability and Tangibility Nondurable Goods ± Beer. Eg. car Service ± Intangible. inseparable. appliance repair.

Consumer Goods Classification. Convenience goods Shopping goods Specialty goods Unsought goods. .

Industrial Goods Classification Material and Parts Capital Item Supplies and business services .

.Product System Group of diverse but related items that function in a compatible manner.

A product mix consist various product line .Product mix Set of all products and items a particular seller offers for sale.

Product width Product length Product depth Consistency .

Branding and Packaging Branding Co-Branding Ingredient Branding .

Packaging All the activities of designing and producing the container for a product Levels    Primary Secondary Shipping .

Benefits Convenience Promotional value Styling Self service Consumer affluence Company and brand image Innovation apportunity .

Labeling Identify the product Grade the product Describe usage and method Describe ingredients Handling process .

Pricing methods Mark up pricing Target-return pricing Perceived value pricing Value pricing Going rate pricing Auction type pricing .

Pricing strategies Geographical pricing Price discount and allowances Promotional pricing Differentiated pricing Product mix pricing .

Geographical pricing Barter Compensation deal Buy back agreement offset .

Price Discount and Allowances Cash discount Quantity discount Functional discount Seasonal discount allowance .

rebates Low interest financing Warranties and service contracts Psychological discount .Promotional Pricing Loss-Leader pricing Special-Event pricing Cash.

Differentiated pricing Customer-segment pricing Product form pricing Image pricing Channel pricing Location pricing Time pricing .

Product mix pricing
Product line pricing Optional feature pricing Captive product pricing Two-Part pricing By-Product pricing Product- bundling pricing

Promotion
Marketing communication are the means by which firms attempt to inform, persuade, and remind consumers ± directly or indirectly ± about the product and brands that they sell. Marketing communication represents the voice of the brand.

Marketing communication mix consist of six major models of communication ± Advertising Sales promotion Events and experiences Public relation and Publicity Direct marketing Personal selling

Advertising Used to build up long term image for a product Effectively reach geographically disperse buyers Pervasive ± can be repeated several times Amplifies expressiveness ± can be dramatized Impersonality monologue .

Sales promotion Give short run effect. Communication Incentive invitation .

Public relations and publicity High credibility Dramatization Ability to catch buyers off guard .

Events and experiences Relevant ± involvement of customers Implicit ± more of an indirect ³soft sell´ .

Direct marketing Customized Up-to ±date interactive .

Personal selling Personal interaction Cultivation ± personal relationship springs up response .

Managing marketing communication Mission Money Message Media Measurement .

Mission Setting marketing communication goal .

Money Stage in PLC Market share and consumer base Competition Product sustainability .

Message Message generation Message evaluation Message execution Social responsibility review .

Media Reach. frequency. impact Major media type Specific media vehicle Media timing Geographical media allocation .

Measurement Communication impact Sales impact .

or event. product. increase name awareness and create longterm buzz around a specific business . place. guerrilla marketing utilizes the power of social interactions to execute non-traditional marketing campaigns that drive sales. guerrilla marketing is a type of promotional marketing that incorporates a series of creative and strategic techniques used to build and maintain public awareness surrounding a person.Guerrilla marketing Also known as attack and ambush marketing.

Guerrilla. public relations and promotional event marketing agencies. marketing became popular in the 1970s . advertising.guerrilla marketing is used by many marketing.

Strategies Attack marketing uses a number of different strategies to create memorable interactions between businesses and consumers. including use of: Promotional Staff to interact with consumers Non-traditional marketing techniques .

mobile and any other form of digital media .Digital Marketing Digital Marketing is the promoting of brands using all forms of digital advertising channels to reach consumers. This now includes Television. Radio. Internet.

Digital Marketing ± Pull vs. Push There are 2 different forms of digital marketing .

In each of these examples. often via web search.Pull Pull digital marketing technologies involve the user having to seek out and directly select (or pull) the content. users have a specific link (URL) to view the content . Web site/blogs and streaming media (audio and video) are good examples of this.

Push Push digital marketing technologies involve both the marketer (creator of the message) as well as the recipients (the user). SMS. content is actually pulled on a periodic basis (polling). In the case of RSS. the marketer has to send (push) the messages to the users (subscribers) in order for the message to be received. In each of these examples. thus simulating a push . Email. RSS are examples of push digital marketing.

Thus green marketing incorporates a broad range of activities. as well as modifying advertising . changes to the production process.Green Marketing According to the American Marketing Association. packaging changes. including product modification. green marketing is the marketing of products that are presumed to be environmentally safe.

was being polluted at a very fast pace until Supreme Court of India forced a change to alternative fuels.Eg . a directive was issued to completely adopt CNG in all public transport systems to curb pollution. capital of India. Nerolac paints. Vediocon New Delhi. . In 2002.

Social Marketing Social marketing is the systematic application of marketing. . Social marketing can be applied to promote merit goods. along with other concepts and techniques. to achieve specific behavioral goals for a social good. or to make a society avoid demerit goods and thus to promote society's well being as a whole.

asking them to use seat belts. this may include asking people not to smoke in public areas.For example. or prompting to make them follow speed limits .

while in "commercial marketing" the aim is primarily "financial".The primary aim of social marketing is "social good". This does not mean that commercial marketers can not contribute to achievement of social good .

with the publication of "Social Marketing: An Approach to Planned Social Change" in the Journal of Marketing by marketing experts Philip Kotler and Gerald Zaltman.History Social marketing began as a formal discipline in 1971. .

. refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes. analogous to the spread of virus or computer viruses. (buzzwords).Viral Marketing Viral marketing and viral advertising.

. brandable software. images. ebooks. advergames.It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clips. or even text messages. interactive Flash games.

." in the viral analogy's terms. The assumption is that if such an advertisement reaches a "susceptible" user. As long as each infected user shares the idea with more than one susceptible user on average .e.History Among the first to write about viral marketing on the Internet was media critic Douglas Rushkoff in his 1994 book . that user will become "infected" (i. accept the idea) and will then go on to share the idea with others "infecting them.

the number of infected users will grow according to a . whose initial segment appears exponential. .

Examples Early in its existence (perhaps between 1988 and 1992). During this period the closing credits included the words "Keep circulating the tapes . the television show Mystery Science Theater 3000 had limited distribution. The producers encouraged viewers to make copies of the show on video tapes and give them to friends in order to expand viewership and increase demand for the fledgling Comedy Central network.

Methods Internet Search Engines & Blogs Target Marketing Web Services Social Media Interconnectivity Industry specific organization contributions Television & Radio .

Interactive marketing Interactive Marketing refers to the evolving trend in marketing whereby marketing has moved from a transactionbased effort to a conversation. .

remember what the customer says and address the customer again in a way that illustrates that we remember what the customer has told us .The definition of interactive marketing comes from John Deighton at Harvard. who says interactive marketing is the ability to address the customer.

although interactive marketing processes are facilitated by internet technology.Interactive marketing is not synonymous with online marketing. The ability to remember what the customer has said is made easier when we can collect customer information online and we can communicate with our customer more easily using the speed of the internet .

Interactive Marketing allows customers to participate in a Brand's process to build its image in a certain market or target group's minds. with or without the Brand Manager's intervention . Thanks to the consumer's ability to "interrupt" a Brand's communications and to complement or modify it's messages to fit his or her own and personal perception. the process of building the Brand itself is crowd sourced among its main target group.

facilitating the sale of their products or services to other companies or organizations that in turn resell them.B2B Marketing Business Marketing is the practice of individuals. governments and institutions. or use them to support their operations . including commercial businesses. or organizations. use them as components in products or services they offer.

Business marketing vs. consumer marketing business marketing generally entails shorter and more direct channels of distribution. . the negotiation process between the buyer and seller is more personal in business marketing A B2B sale is to an organization. And in that simple distinction lies a web of complications that differ because of the organizational structure.

Bottom of the pyramid marketing Making the products available to the poor consumers with incomes less than $2 per day can be a viable and a profitable segment to market for MNCs. Companies have drafted different strategies to penetrate in the bottom of pyramid as ±  Keep your product offer small  Cut the frills  Lift their economy .

Political marketing .

So. product differentiation is the way everyone is looking for Companies are adding services with their products.Morph marketing As because many new products everyday entering into the market survival and that too with generating required profit is becoming a tough matter for companies. . This approach is known as morph marketing.

equipments. A marketing information system is developed from ±    (A) Internal company record (B) Marketing intelligence activities (C) Marketing research . and accurate information to marketing decision makers. and distribute needed.Marketing Information System MIS consist of people. analyze. sort. and procedure to gather. timely. evaluate.

prices. data mining.(A) Internal company record Gives reports on orders. sales. receivables. payables and so on. Types are   Order-to-payment cycle Sales information system Data base. costs. data warehousing . inventory levels.

(B) Marketing intelligence activities Marketing Intelligence system is a set of procedures and sources managers use to obtain everyday information about development in marketing environment. but the marketing intelligence system supplies happening data. . Internal record system supplies resultdata.

A company can network externally A company can set up customer advisory panel . and other intermediaries to pass along important intelligence.Steps to improve marketing intelligence A company can train and motivate the sales force to spot and report new developments A company can motivate distributors. retailers.

A company can take advantage of government data resources A company can purchase information from outside suppliers A company can use online customers feedback systems to collect competitive intelligence .

thus it is possible to track changes within the same set of audience over a period of time . Informations are gathered from these respondents repeatedly .(C) Marketing Research Types of marketing research ±   Ad-hoc research ± focused on specific marketing problem and collect data at one point in time from one sample of respondents Continuous research interview ± The same respondents are interviewed repeatedly.

. analysis and reporting of data and findings relevant to a specific marketing situation facing the company.Marketing Research is the systematic design.Formal studies of specific problems and opportunities. .Marketing Research . collection.

Marketing Research process .

Developing the research plan Cost Data source   Primary Secondary Observational research Focus-Group research Survey research Experimental research Research approach     .

Research instruments   Questionnaire Mechanical Instruments Sampling Unit ± Who is to be surveyed Sampling Size ± How many ppl shd b surveyed Sampling procedure ± How shd the respondents be chosen Sampling Plan    .

Contact method    Mail questionnaire Telephone interview Personal interview Arranged interview Intercept interview .

Sales Forecasting Sales potentials are quantitative estimates of the maximum possible sales opportunities present in particular market segments open to a specified company selling a good or service during a stated future period. .

The estimate for sales potentials indicates how much a company could sell if it had all the necessary resources and desire to use them. Sales forecast is related different estimate ± it indicates how much a company with a given amount of resources can sell if it implement a particular marketing program .

Sales Forecasting method Jury of executive opinion Poll of sales force opinion Project of post sales    Time series analysis Exponential smoothing Evaluation of past sales projection methods Survey of customers¶ buying plans Regression Analysis .

2. Way to pool experience and judgment. High ranking executives estimate probable sales. Used when adequate sales and marketing statistics are missing .Jury of executive opinion Steps ±   1. Quick and easy way 2. Merits ±     1. Average estimate is calculated. Used for young company 4. 3.

Adds to the work load of key executives 3. Based on opinion. factual evidence is sketchy 2. by time intervals. and so on. by customers. difficult to breakdown into estimates of probable sales by products.Demerits    1. .

territories. middleman and sales force. Easy to breakdown according to product. as management thinks is necessary. . Merits   1. then individual forecasts are combined and modified.Poll of sales force opinion Individual sales personnel forecast for their territories. customers. and form company¶s sales forecast. Greater confidence in sales people 2.

Demerits ±    Tend to be overly optimistic or overly pessimistic about sales prospect Unaware of broad change taking place in economy and of trend in business Personnel deliberately underestimate so that quotas are reached more easily. .

Projection of past sales Next year¶s sales = This year¶s sales This year¶s sales X Last year¶s sales .

Time series analysis ± This procedure involves isolating and measuring four chief types of sales variation. Long term trends Cyclical changes Seasonal variations Irregular fluctuation .

Exponential Smoothing Next year¶s sales = (This year¶s sales) + (1)(this year¶s forecast) .

Demerits Sales history is the sole factor influencing future sales No allowance is made for significant changes made by marketing program or by its competitors. Nor is allowance made for sharp and rapid upswing or downturns in business activity .

Survey of customers· buying plans Mainly used in B2B. .

Regression Analysis Determines and measures the association between company sales and other variables. Major steps are ±    Identify variables causally related to company sales Determine or estimate the value of these variables related to sales Derive the sales forecast from these customers .

Sign up to vote on this title
UsefulNot useful