Forecasting_Demand

Forecasting_Demand - Quantitative Methods 202 Dr. Myril...

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Quantitative Methods 202 Dr. Myril Hillman
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Sales Forecasting
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Market Demand Total volume bought by defined customer group in defined geographic area in defined marketing environment under a defined marketing program
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Market Potential The limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment
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Total Market Potential Maximum amount of sales available to all firms in an industry as marketing expenditures approach infinity, for a given marketing environment
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Calculate Total Market Potential Estimate potential buyers X Average quantity purchased X Unit price
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Chain Ratio Method of Calculating: Total Market Potential Multiply base number by adjusting percentages
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Chain Ratio Method Example: Beer population x personal discretionary income x average %discretionary income spent on beverages x % spent on alcoholic beverages x % amount spent on beer
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Area Market Potential “Market Buildup Method”
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Forecasting_Demand - Quantitative Methods 202 Dr. Myril...

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