Chapter 3 Flashcards
It refers to the systematic collection, analysis, interpretation, storage and dissemination of the market information, from both the internal and external sources, to the marketers on a regular, continuous basis.
Marketing Information System
(4) Components of Marketing Information System
- Internal Records
- Marketing Intelligence System
- Marketing Research
- Marketing Decision Support System
(I3Ms)
Marketing managers rely on internal reports related to customer orders, sales, price levels, cost, inventory levels, receivable and payables.
Internal Records
It’s a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making.
Marketing Intelligence System
Mainly focuses on:
-Order-to-payment Cycle
-Sales information System
Internal Records
The systematic collection, organization, analysis and interpretation of the primary or the secondary data to find out the solutions to the marketing problems.
Marketing Research
Marketing Information came from:
-Publications
-Networking
-Personal Interactions
-Observations and internet
Marketing Intelligence System
It is a system supported by software and hardware to gather information from business and environment.
Marketing Decision Support System
It is based on the analysis of past demand for that product or service in the present market condition.
Demand forecasting
It is a technique for estimation of probable demand for a product or services in the future.
Demand forecasting
It should be done on a scientific basis and facts and events related to forecasting should be considered.
Demand forecasting
Factors Influencing Demand Forecasting
Seasonality
Competition
Geography
Economy
Types of Goods
(SCGET)
(6) Types of Demand Forecasting
-Passive Demand Forecasting
-Active Demand Forecasting
-Short-term Demand Forecasting
-Medium to Long-term Demand Forecasting
-External Macro Level Demand Forecasting
-Internal Business Level Demand Forecasting
(PASMEI)
It is carried out for stable businesses with very conservative growth plans. Simple extrapolations of historical data are carried out with minimal assumptions. This is a rare type of forecasting limited to small and local businesses.
Passive Demand Forecasting
It is carried out for scaling and diversifying businesses with aggressive growth plans in terms of marketing activities, product portfolio expansion and consideration of competitor activities and external economic environment.
Active Demand Forecasting
It is carried out for a shorter term period of 3 months to 12 months.
Short-term Demand Forecasting
It is typically carried out for more than 12 months to 24 months in advance (36-48 months in certain businesses).
Medium to Long-term Demand Forecasting
This type of forecasting deals with the broader market movements which depend on the macroeconomic environment.
External Macro Level Demand Forecasting
This forecasting is carried out for evaluating the strategic objectives of a business like product portfolio expansion, entering new customer segments, technological disruptions, a paradigm shift in consumer behavior and risk mitigation strategies.
External Macro Level Demand Forecasting
One of the most important steps of the Demand Forecasting process is the ____________________ for Demand Forecasting.
Selection of the appropriate demand forecasting
This type of Forecasting deals with internal operations of the business such as product category, sales division, financial division, and manufacturing group.
Internal Business Level Demand Forecasting
Demand can be forecasted using ___________ methods or ___________methods.
Qualitative or Quantitative
(6) Methods in Demand Forecasting
(3) Qualitative Methods:
-The Delphi Technique
-Sales Force Opinion
-Market Research
(3) Quantitative Methods:
-Trend Projection Method
-Barometric Technique
-Econometric Forecasting Technique
(3) Qualitative Methods:
-The Delphi Technique
-Sales Force Opinion
-Market Research
(3) Quantitative Methods:
-Trend Projection Method
-Barometric Technique
-Econometric Forecasting Technique
A panel of experts are appointed to produce a Demand Forecast. Each expert is asked to generate a forecast of their assigned specific segment.
The Delphi Technique
The Sales Manager asks for inputs of expected demand from each Salesperson in their team. Each Salesperson evaluates their respective region and product categories and provides their individual customer demand.
Sales Force Opinion
In this technique, customer specific surveys are deployed to generate potential demand.
Market Research
It can be effectively deployed for businesses with a large sales data history of typically more than 18 to 24 months. This historical data generates a “time series” which represents the past sales and projected demand for a specific product category under normal conditions by a graphical plotting method or the least square method.
Trend Projection Method
It is based on the principle of recording events in the present to predict the future. This is accomplished by analyzing the statistical and economic indicators.
Barometric Technique
It utilizes autoregressive integrated moving-average and complex mathematical equations, to establish relationships between demand and factors that influence the demand. An equation is derived and fine-tuned to ensure a reliable historical representation. Finally, the projected values of the influencing variables are inserted into the equation to generate a forecast.
Econometric Forecasting Technique
