Mkting Intelligence

Question 1

What is the importance of mkt intelligence?

Answer 1

• need to gain insights on customer needs and wants, and satisfy them
• provide accurate info to reduce risk and make good decisions
• serve as a basis for bizs to forecast sales

Question 2

How to understand the customer?

Answer 2

• understand tastes and preferences
• reactions to price changes
• effectiveness of advertising and promotional campaigns

Question 3

What are the benefits of understanding the customers?

Answer 3

1. Reduced risks associated with new pdt launches -> conduct research to investigate potential demand for a new pdt. With that, the biz can assess the likelihood of a new pdt achieving satisfactory sales
2. Predict future demand changes -> can determine the impact on sales by external factors affecting customers
3. Determine the most favoured aspect of pdt -> can determine the aspects and performance rated most highly by consumers. These features would be incorporated into the final pdt + determine the most effective promotional method by trying out different versions of proposed advertisements

Question 4

What is sales forecasting?

Answer 4

• predicting future sales levels and sales trends using statistical methods
• based on past sales data, industry-wide comparisons and economic trends

Question 5

What are the benefits of sales forecasting?

Answer 5

Benefits the whole biz, allows for advance planning and avoid impact caused by demand changes

Question 6

How does sales forecasting benefits the whole business?

Answer 6

Mkting dept -> with an accurate sales forecast, I can know how many products to sell and distribute
Operations team -> with accurate sales forecast, we can decide the qty to produce and the qty of raw materials to purchase to support the production
Finance team -> to project costs and profits and determine how much money is required to support the operations of the biz

Question 7

How does sales forecasting allow for advance planning?

Answer 7

Sales forecasting ensures that a business thinks ahead about how it plans to monitor and track sales beyond the current period. Through this, the mgt of the biz could make decisions on biz strategies.

Question 8

How does sales forecasting avoid impact caused by demand change?

Answer 8

Sales forecasting based on prior sales results and mgt experience reduce the chances of the company being blindsided by a surge or drop in demand. For example, if the mgt notices a seasonal pattern in sales, it can hire or reduce staff accordingly

Question 9

What are the limitations of sales forecasting?

Answer 9

• Dependence on historical data -> if the company is relatively new, the business would have limited data available for sales forecasting and past results are not always indicative of future sales results
• difficulty in predicting consumer preferences -> consumer tastes and preferences may vary. This makes the prediction hard to gauge
• impact of external influences -> due to complex and dynamic external factor s that can influence the sales performance of biz, precise sales forecasting is impossible to achieve

Question 10

What is primary research?

Answer 10

Collection of first-hand data directly relevant to the needs of the business

Question 11

What is secondary research?

Answer 11

The collection, use and analysis of second-hand data that already exists

Question 12

What are the methods of primary research?

Answer 12

Focus groups, observation and recording, test marketing and consumer surveys

Question 13

What is focus group?

Answer 13

• a discussion group where people are asked about their attitude towards a product, advertisement or packaging
• commonly used to obtain feedback about new products, brand names or advertisements before they are launched
• considered more realistic and accurate than interviews and surveys

Question 14

What are the limitations of focus group?

Answer 14

• difficult to generalise from results due to small sample size
• participants may not always be honest and open in front of others
• existence of peer pressure

All these would undermine the reliability and therefore the accuracy of the data collected

Question 15

What is observation and recording?

Answer 15

• Observe relevant people, actions and situations

- observe customer behaviour to gather insights that cannot be obtained from questionnaires or surveys

Question 16

What are the strengths and limitations of observation and recording?

Answer 16

Strengths: reduces the risk of a new product launch failing completely and avoids the subjective element that is present when people are interviewed

Weaknesses: feelings, attitudes and intentions cannot be observed and difficult to observe Long-term behaviour

Question 17

What is test marketing?

Answer 17

• Involves promoting and selling a limited qty of a new product to a limited geographical area before a full-scale launch is made
• consumer initial reactions and preliminary sales figure will be recorded

Question 18

What are the strengths and limitations of test marketing?

Answer 18

Strengths: reduces the risk of a new product launch falling completely

Weaknesses: not always completely accurate if the total population does not share the same characteristics and preferences as the region selected

Question 19

What are consumer surveys?

Answer 19

• asking potential consumers for their opinions and preferences
• widely used for gathering descriptive info

Question 20

What are the strengths and limitations of consumer surveys?

Answer 20

Strengths: flexible to gather different info in various situations

Limitations: respondents cannot remember or have never thought about the answer, unwilling to reveal private info, trying to appear smarter or well-informed and provide agreeable answers

Question 21

What are the advantages of primary research?

Answer 21

• recent and updated
• collected for specific purpose, relevant to what biz requires
• confidential and no other biz has access to info

Question 22

What are the disadvantages of primary research?

Answer 22

• expensive and costly
• time-consuming
• doubts over accuracy and validity -> due to use of sampling which might not be representative of the whole pope

Question 23

What are the sources of secondary research?

Answer 23

Govt publications, libraries, trade organisations, market intelligence reports, newspapers and specialist publications, internal biz records and internet

Question 24

What are the advantages of secondary research?

Answer 24

• obtained cheaply and quickly
• identifies nature of market and helps with the planning of primary research
• allows from comparison of data across sources

Question 25

What are the disadvantages of secondary research?

Answer 25

• Not updated frequently, hence out of date
• may be collected for another purpose, and not entirely suitable for biz
• methods and accuracy unknown
• info may not exist for new products