Chapter 21 - Marketing Analysis

Question 1

Price Elasticity of Demand ( PED )

Answer 1

A measure of the responsiveness of demand for a product following a change in its price.

Question 2

Zero PED

Answer 2

Perfectly Inelastic

Question 3

Between 0 and 1

Answer 3

Inelastic Demand

Question 4

Unitary 1

Answer 4

Unit Elastic

Question 5

Between 1 and infinitiy

Answer 5

Elastic Demand

Question 6

Infinity

Answer 6

Perfectly Elastic Demand

Question 7

Factors Determining PED

Answer 7

1) Necessity of product
2) Number of close competitors
3) Consumer Loyalty
4) Price of product to consumer income

Question 8

Impact of PED on business decisions

Answer 8

1) Pricing Decisions
2) Wage Decisions

Question 9

Income Elasticity Of Demand

Answer 9

% Change in demand for the product / % Change in consumer income

Question 10

Promotional Elasticity

Answer 10

% Change in demand for the product / % Change in promotional spending

Question 11

Inferior Good

Answer 11

A product that experiences an increase in demand when consumer incomes fall.

Question 12

New Product Development

Answer 12

The design, creation and marketing of new goods and services.

Question 13

Sources of New Ideas

Answer 13

1) Company R & D
2) Adaptation of competitors’ product
3) Market research
4) Employees
5) Sales Employees
6) Brainstorming in groups

Question 14

Process of NPD

Answer 14

1) Generating new ideas
2) Idea Screening
3) Concept Development
4) Business Analysis
5) Product Testing
6) Test Marketing
7) Commercialisation

Question 15

R & D

Answer 15

The scientific research and techincal development of new product and processes.

Question 16

Test Marketing

Answer 16

The launch of the product on a small scale market to test consumer reactions to the product.

Question 17

Factors Influencing R & D Expenditure

Answer 17

1) Nature of industry
2) Level of R & D spending by competitors
3) Business Expectations
4) Risk profile and culture of business
5) Government policies towards grants to businesses and universities for R & D

Question 18

Sales Forecasting

Answer 18

Predicting future sales levels and sales trends.

Question 19

Trend

Answer 19

The underlying movement in a series of data over time

Question 20

Seasonal Fluctuations

Answer 20

The regular and repeated variations that occur in sales data with a period of 12 months

Question 21

Cyclical Fluctuations

Answer 21

Variations in sales over periods of time of much more than a year which are due to the business cycle

Question 22

Random Fluctuations

Answer 22

Variations that occur at any time and cause unusual and unpredictable sales figures, due to events such as exceptionally poor weather or negative public image.

Question 23

Qualitative Sales Forecasting

Answer 23

Predictions about future sales which use expert judgement instead of numerical analysis.

Question 24

Sales forecast Composite

Answer 24

A method of sales forecasting that adds together the individual predictions of future sales from all the sales representatives working for a business.

Question 25

Delphi Method

Answer 25

A long-range qualitative forecasting technique that obtains forecasts from a panel of experts.

Question 26

Jury Of Experts

Answer 26

A method that uses the specialists within a business to make forecasts for the future