Measuring Market Opportunities: Forecasting and Market Knowledge

Question 1

Target Market

Answer 1

Size of potential and penetrated market you plan to serve

Question 2

Statistical Methods

Answer 2

Use past history and various statistical techniques

Question 3

Observation-based Forecast

Answer 3

Directly observe and gather data about what real customers do in the product market of interest

Question 4

Analogy

Answer 4

product is compared with similar historical data

Question 5

Chain Ratio Forecast

Answer 5

Market potential multiplied by various fractional factors (awareness, distribution)

Question 6

Diffusion of innovation theory

Answer 6

explains the adoption of an innovative product or service over time among group of potential buyers

Question 7

Speed of Adoption Factors (6)

Answer 7

1. Risk
2. Relative advantage over other products
3. Relative simplicity of new product
4. Compatibility with previously adopted ideas and behaviour
5. Extent its trial can be accomplished on a small-scale basis
6. Ease central idea can be communicated

Question 8

5 Groups of Adopters

Answer 8

1. Innovators
2. Early Adopters
3. Early Majority
4. Late Majority
5. Laggards

Question 9

Forecasting Errors

Answer 9

1. Anchoring bias
2. Misinterpreting capacity constraints
3. Incentive pay (sandbagging for bonus)
4. Assumptions (awareness, distribution)

Question 10

2 keys to good forecasting

Answer 10

1. make assumptions explicit

2. use multiple methods

Question 11

4 market knowledge systems (CRM)

Answer 11

1. internal records
2. marketing databases
3. competitive intelligence systems
4. client contact systems

Question 12

Internal Records for Decision Makers (6 Questions)

Answer 12

1. What information is key to providing our customers with what they want?
2. What regular marketing decisions are critical to our profitability?
3. What data are critical to managing profitability?
4. Who needs to know?
5. When do they need to know?
6. In what sequence and level of aggregation should the data be reported?

Question 13

Marketing Databases (4)

Answer 13

1. Transactions
2. Instances of customer contact
3. Customer demographics
4. Customer responses

Question 14

Customer Lifetime Value (CLV)

Answer 14

Margins that a customer generates over a lifetime less the cost of serving the customer.

Question 15

CRM Pitfalls (4)

Answer 15

1. implementing CRM w/o strategy
2. implementing CRM w/o changing organizational structure and processes
3. Assuming more CRM is better
   4, Failure to prioritize which customer relationships are worth investing?

Question 16

Market Research 6 Steps

Answer 16

1. Identify problem and establish objective
2. Determine data sources and research approaches
3. Design research
4. Collect Data
5. Analyze data
6. Report results

Question 17

Competitor Intelligence 4 Questions

Answer 17

1. How rapidly does the competitive climate in our industry change?
2. What are our CI objectives?
3. Who are the best internal clients for CI?
4. What budget should be allocated to CI

Question 18

Marketing Research

Answer 18

design, collection, analysis, and reporting of data of a particular marketing challenge

Question 19

Primary Data

Answer 19

observation, surveys, interviews

Question 20

Secondary Data

Answer 20

Internet, government documents, business press

Question 21

Market Research 5 Questions of Critical User

Answer 21

1. What are the objectives of the research
2. Are the data sources appropriate
3. Are qualitative or quantitative approaches suited to objectives
4. Is the research well designed?
5. Are analyses appropriate?