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Unit 3 - Marketing (continued) - Coggle Diagram
Unit 3 - Marketing (continued)
3.3 Sales Forecasting
Sales Forecasting
process of predicting how a company's future sales will look like
done with the use of quantitative methods to estimate future sales levels and identify trends
reduces uncertainty of the future
higher chances of reaching its goals
done by making an analysis of a time series (line graph)
Sales Fluctuation types
Seasonal
changes in demand because of the varying seasons in the year
repeated and occurred within a year or less
Cyclical
changes are tied to the business cycle and the economy (extended longer than a year)
random
sudden abnormal changes that stand out from the trend (unpredictable and may happen at any moment)
Calculating a three-year moving average
get number of sales in three years, add them and divide them by 3. (do the same step for the other sets of threes)
Calculating a four-year moving average
involves the use of a four-year and an eight-year moving total to establish a mid-point.
Ex: summation of sales of years 1,2,3,4 (US$): 400,000 + 600,000 + 800,000 + 650,000) = 2,450,000
Extrapolation
moving averages, you can extended your line using a "line of best fit"
Calculating variations
variation is calculated by getting the difference between actual sales and the trend values
3.4 Market Research
Why market research?
the process of collecting, analyzing and reporting data related to a particular market
data on consumption of goods and services and on competitor's behavior
Examples
Product
measuring effectiveness of a product or prototype
Needs
identify consumer needs or measure satisfaction levels
strategy
measure effectiveness of current strategy
Forecasting
identify trends that will help in predicting the future
Data Types
Qualitative
goes in-depth on a situation, revealing motives, feelings, reasonings (ex: why do you like to drive to school?)
Quantitative
takes a broad perspective of data and tries to find patterns and trends (Ex: do you drive, bike or walk to school?)
Primary Research
All data is collected firsthand and is 100% tailored to the needs of the research
Types of primary research
surveys
questionnaires sent out to a specific target audience
Focus groups
group discussions on a chosen topic
interviews
one-one-one, individual research, done in-person or over the phone
observations
watching consumers and trying to identify traits or trends
Secondary Research
data that is collected secondhand from someone who has already done the field research
Sampling
is a group of people selected to represent a population or target under research
its important because it can represent an entire population without the need of surveying your actual population to its entirely
Types of secondary research
Quota
divides population into subgroups and establish a quota or minimum
random
a minimum amount of respondents is chosen and every respondent is chosen at random
cluster
similar to stratified, but by geographical location
stratified
divide population into segments by characteristic, and sample sizes will change according to each strata
snowballing
each surveyed individual refers another individual to be surveyed
convenience
chosen by proximity or ease of access to researcher
3.5 The Four P's: Product
Product
any good or services that is offered to the market with the aim of satisfying consumer needs or wants
six stages that product follows:
development
development: product is being designed and developed. Its not presented in the market yet. Follows the following stages:
Generation of ideas: also known as the brainstorming step, which is where all possible ideas are gathered from key stakeholders
Screening ideas: strong ideas, which should be further developed, are weeded out from the weaker ones. This may be due to cost, ability to produce or simple a lack of demand
prototyping: the first physical versions of the product are created, and focus groups are made in order to test out the product behind closed doors.
test marketing: very selected markets are chosen discreetly n order to test out the product in the outside world.
full launch: this when the product finishes he development stage and is ready to move on to the introduction stage, which will involve all of the marketing mix elements.
Introduction
known as the launch stage, this is when the product is officially launched on the market. few strategies during this stage are:
Price skimming: setting a higher price when introducing a new product to the market, which can also be seen as an "early adopter premium".
Penetration Pricing: when a product has a low initial price at its launch with the aim of attracting a large number of customers and quickly gaining market share.
Heavy advertising: this is one of the most advertising-expensive parts of the product life cycle, in which a lot of money is invested in order to increase brand recognition.
restricted access: by restricting the amount of people that have access to a product and by giving it to key influencers, brand recognition
Growth
Once the product has been introduced in the market and has survived its initial periods, it can start to be well-received by the market.
With this, sales volumes start to increase, as well as revenues and rising profits.
Maturity
"optimal" stage for products, since they already have reached or are close to reaching their peak.
Sales increase slowly or maintain a smooth line, since the product is already established in the market and consequently has a significant market share.
Saturation
many competitors have already entered the market with interesting solutions. This leads to more offerings than actual demand for that specific product or service.
Decline
the product has been declared "dead", since sales drop steadily and it will hardly resist.
Extension strategies in a product life cycle
selling the same product to new markets
find new uses for the product, or adapt the product to the market
change the packaging and the layout
target different segments
develop new promotional strategies
rethink price and place
The BCG Matrix (Boston Consulting Group)
is used in product portfolio analysis. It is especially useful for companies that have several products being sold
starts: these are products with high market growth and high market share. They generate a lot of income
cash cows: these are products with low market growth and high market share. They give out a lot of income for the company
Question Marks: these are products with a high market growth but a low market share.
Dogs: these products have a low market share and low growth. They operate in markets that are not growing or that are declining
Strategies derived from BCG matrix
holding: focusing on keeping the star products performing well
Building: an effort to turn problem children into starts
Harvesting: focusing on reaping the benefits of cash cow products
Diversity: phasing out or selling your poor-performing dogs