- Created by: Bex Longhurst
- Created on: 26-04-12 00:06
A moving average allows us to smooth out a series of data, so that the underlying movement over a certain amount of time can be seen.
ü Useful for forecasting the future
ü Helps to set budgets
ü Helpful in regard to cash flow
ü Estimate future capacity needs
§ Can’t predict the future
Should be treated with caution:
Ask who is providing the data and why, and if it is reliable or not?
A test market is a geographic region, or demographic group, used to determine the success of a product in the mass market before an official release.
ü You can receive solid forecasts of revenue received and sales volume
ü Valuable information gained to revise and refine any aspect of the launch
There are things to consider:
§ MANUFACTURING: Are you able to jump from pilot to full-scale production easily?
§ RETAILERS: Are retailers going to stick to promises and support the launch?
§ CUSTOMERS: Will they buy and use the product as expected?
§ CANNIBALISATION: Impact on your other products – how will this product effect another product in your range?
Should you test the market?
- Will you receive useful information? (i.e: expected sales & volume sold)
- Can be unsuccessful, but can save money in the long run
- Competitors may become aware of your product
- Test markets are false conditions and may not represent the true conditions
- Gives you a mostly accurate result
- However, you are only testing in one demographic
- Can learn from your mistakes
Asset led: A company uses its strengths or assets as the key element of marketing.
Market led: Businesses conduct regular market research in order to analyse consumer’s needs, and ensure that these are filled.
Product led: When a company focuses on a particular product, they can use their reputation to release other elements to the business.
Is asset-led riskier than market led?
They both have risks associated with them, but if you are a large company with a good reputation, asset led would be most sensible, and if you are a smaller company, market-led with in-depth market research would be sensible.
Price Elasticity of Demand
% change in sales difference x 100
% change in price original
Reasons for HIGH price elasticity (Price elastic)
ü If there are substitutes available
ü If it is a high proportion of your income (expensive)
Reasons for LOW price elasticity (Price inelastic)
ü If it is a low proportion of your…