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MARKET FORECASTING

Forecasting is predicting what is likely to happen in the future in connection with a particular situation. To estimate total market potential a company needs to forecast the number of buyers and the average quantity that they will purchase. If this is done badly it can result in excessiveinventories and costly price cuts, or on the contrary, lost sales due to insufficient production.

There are various methods of forecasting but they all depend on one of three factors: what people say, what they do (which is not always the same), and what they have done in the past. Forecasts based on what people say are made from surveys of buyer intentions, conducted by personal, telephone or postal interviews of a statistically selected sample of consumers. Even though consumers do not always have clear intentions or carry out their original intentions, and they are not always prepared to disclose them. Buyer-intention surveys are often quite accurate for major consumer durables and industrial goods. Surveys are also the only possible forecasting technique for new products for which past data does not exist.

If surveying customers is too expensive an alternative method is to get estimates from sales representatives who are, after all, close to customers, especially those of highly specialized, technical products. Where a company does not have its own sales force, distributors can sometimes provide equivalent information. Direct market tests, unlike surveys, enable a forecast to be made based on what people actually do. Consequently, market tests are often carried out for new products, for products whose buyers do not carefully plan their purchases or who are highly erratic in fulfilling their intentions, or for products that are being sold in new areas or by new distribution channels.

An alternative to both surveys and market tests is to analyze existing data, such as time series of past sales of a product, taking into account the business cycle, and unpredictable events such as shortages, strikes, price wars, and extreme weather conditions.

 

2. Define the main idea of each paragraph.

 

3. Find among the underlined words in the text that mean the same as the following:


1.a set of questions that you ask a large number of people or organizations

2.someone who has been chosen or elected by a person or group

3.places

4.considering

5.a plan in your mind to do something

6.the amount, level, standard etc that is typical of a group of people or things

7.a lack of something you need or want

8.changing often or not following a regular pattern, so that it is difficult to know what will happen next

9.much more than is reasonable or necessary

10.a group of people used for getting information about a larger group or about the whole population

11.to give information to people

12.expensive

13.a period of time during which people refuse to work, as a protest about pay or conditions of work

14.a meeting in which someone asks you a series of questions as part of a research project



15.the goods in a shop


 

4. Finish the sentences:

1. To forecast means a) to make a survey of buyers.

b) to predict what will happen in the market.

c) to say what the weather will be like.

2. Interviews are conducted with a) a selected group of consumers.

b) sales representatives.

c) distributors.

3. Forecasting methods depend on a) average quantity purchased.

b) direct market test.

c) three factors.

4. Sales representatives a) are close to customers.

b) guess about buyers intentions.

c) carry out surveys.

5. Market tests are carried out a) for excessive inventories.

b) to estimate market potential.

c) for new products and for new areas of sales.

 

5. Choose the right variant to fill in the gap:

1. is taking existing products into new markets or new market segments.

a) market development b) market expenditure c) market potential

2. The extended level of a companys sales in a given marketing environment and with a particular marketing plan is .

a) market potential b) sales forecast c) market forecast

3. Predicting what is likely to happen in the future in connection with a particular situation is .

a) marketing programme b) market opportunities c) forecasting

4. is a market in which there are too many suppliers producing similar products.

a) saturated market b) buyers market c) heavy market

5. is a market in which there are few suppliers producing goods that a lot people want to buy.

a) weak market b) sellers market c) light market

6. is a person with specialist knowledge of a specific market who often predicts what will happen and tries to explain what has happened.

a) market analyst b) forecaster c) market broker

7. The total volume that will be bought in a particular area, period of time, and marketing environment, with a given marketing programme is called .

a) market supply b) market coverage c) market demand

8. Someone who works in marketing is called .

a) marketperson b) marketer c) marketman

9. The total quantity of a companys sales is .

a) total sales b) sales amount c) sales volume

10. The amount of money a company receives from its sales is called .

a) sales revenue b) sales quota c) sales figures

11. Percentage of a total market which one company or product holds is .

a) market survey b) market share c) market potential

12. An investigation into a market is called .

a) market observation b) market study c) market survey

13. When the market is getting bigger we say that it is .

a) expanding b) widening c) broadening

14. The number of sales a company wants to achieve in a certain period is .

a) purchasing goal b) selling purpose c) sales target

15. is the limit approached by demand in a given market and marketing environment as marketing expenditure increases.

a) market opportunities b) market potential c) market forecast

16. Possibilities of filling unsatisfied needs in sectors in which the company can produce goods or services effectively are called .

a) market opportunities b) market potential c) market share

17. is the willingness and ability of consumers to purchase goods and services.

a) supply b) demand c) consumption

18. is the willingness and ability to offer goods or services for sale.

a) supply b) demand c) consumption

19. The extent to which goods or services are available in a potential market area is .

a) market extension b) market dimension c) market coverage

20. The extent to which a market is dominated by a few large companies is .

a) market concentration b) market coverage c) market density

21. A product can be sold because people want to buy it.

a) marketed b) marketable c) advertised

22. The company must take account of the existence of , who always have to be identified, monitored and defeated in the search for loyal customers.

a) competitors b) enemies c) contests

23. The new product was so successful that production was barely able to cope with

a) supply b) demand c) requirement

 

UNIT 13

1. Reading and translation practice. Pay attention to the words in bold. Find their meaning in the dictionary:

MARKET DEMAND AND SUPPLY (I)

A market can be defined as any form of contact between buyers and sellers for the purpose of buying and selling goods and services. Markets always have two sides: the demand side composed of buyers, and the supply side made up of sellers. Markets can be local, national or even international. A market typically has four elements:

  1. Buyers - people wishing to acquire goods and services.
  2. Sellers - people wishing to sell goods and services.
  3. The goods and services, which are going to be exchanged.
  4. A means of payment - that includes cash, cheque, credit, standing order and hire purchase.

The demand for a product is the amount of a good that people are willing to buy over a given time period at a particular price. For most goods and services the amount that consumers wish to buy (the quantity demanded) will increase as price falls.

The desired demand is the information showing the amount of the product that consumers are willing to buy at different prices - not what they actually do buy. The demand for a product is not only influenced by price. An individual may be influenced by factors such as personal tastes, the size of income, advertising, the cost and availability of credit. The total market demand will be affected by the size and age distribution of the population and government policy.

The quantity of goods and services that producers offer at each price is called supply. While demand is concerned with the buying side of the market, supply is concerned with the firms or producers side of the market. Unlike demand, the quantity supplied of a good will increase as price rises. The supply of a product is not only influenced by price. Supply will be affected by anything that helps or hinders production or alters the costs of production.

Consumers have a wide variety of choice in how they spend their income, and there is a large quantity and many different types of goods and services that the consumer can buy. One difficulty that confronts a firm is to decide what to produce. Satisfying the wants and needs of consumers and anticipating these wants can make the difference between success and failure in business. Some things, such as food, are essential. Food is an example of a single-use consumer good. Most people, having satisfied their needs, can attempt to satisfy their wants by the purchase of items such as cars, TVs, microwave ovens and compact disc players. They are sometimes called consumer durable products. Alternatively, they may purchase services such as dry-cleaning, haircuts, trips to the cinema and meals out.

Today, a successful company is one, which tries to discover what the consumer wants or could be persuaded to buy and then makes that product and sells it at a profit. Such firms are said to be market-oriented. In a market-oriented firm one of the functions of marketing department is to find out consumer requirements. This is in complete contrast to a product-oriented firm, which first produces a product and then tries to sell it in the hope that the consumer will buy it.

 

2. Define the main idea of each paragraph.

 

3. Find among the underlined words in the text that mean the same as the following:


1.something that is needed

2.aim

3.certain

4.to change

5.important

6.to try

7.connected with

8.the types of thing you like, for example in art, music, or clothes

9.required

10.directed towards the market

11.to deal with a difficult situation

12.an amount of money that you give or receive

13.a piece of printed paper that you can use instead of money to pay for things

14.goods

15.money that someone gets from working or from investing money

16.to stop someone or something from making progress or developing

17.a method of buying expensive goods in which you pay small regular amounts of money until you have paid the whole amount


 

4. Decide if the statements are True or False. Find the answer in the text and correct the false statements:

1.The demand side of the market is made up of sellers.

2.A market usually has three elements.

3.The amount consumers want to buy will increase as price falls.

4.Tastes, income, advertising, credit influence the total market demand.

5.The quantity of a good will decrease as price rises.

6.Consumers can spend their income in many different ways.

7.It is a very hard decision for a company what to produce.

8.Market-oriented firms do not vary from product-oriented ones.

9.Market-oriented firms produce a product and then tries to sell it.

 

MARKET RESEARCH OF CONSUMER NEEDS (II)

Market research involves studying the market to discover exactly what the customer really wants. Companies collect information in order to build up a picture of consumer requirements. It can come from two main sources.

1. Primary information is information that is not already available. One of the techniques used to collect this information here is field research - questioning consumers directly about their tastes and preferences.

2. Secondary information is information that is already available to the firm. It can come from a variety of sources, such as government statistics and business and trade publications. Gathering information this way is called desk research.

Identifying the tastes and preferences of consumers is not simple because there are many different types of consumers with different tastes. Firms normally try to build up a consumer profile, i.e. the age, sex, occupation and location of its consumers.

Every firm usually possesses its own internal information about the popularity of its products and about its own sales. This information, although useful, may be of limited value since it tells the firm nothing about the total size of the market, competitors products and prices, or consumer preferences. Consumer research can be carried out by the Market Research Department of a company or by Market Research Centers, which specialize in providing this service for others.

Market researchers collect, analyze and interpret data to provide companies with information about the needs and desires of the buying public, they develop forecasts of consumer motivations and buying habits on the basis of these forecasts, they propose strategies for the marketing campaign of current products and suggest areas for market expansion.

 

6. Find the English equivalents to the following word combinations:

1. a) standing order

2. b) forecast

3. c) international market

4. d) purchase on credit

5. e) consumer requirements

6. f) buying habits

7. g) demand

8.

h) market expansion

9. i) hire purchase

10. j) supply

11. k) consumer research

12. l) local market

13. m) market-oriented

14. n) consumer profile

15. o) marketing campaign

16. p) product-oriented

 

7. Fill the gaps in the sentences below with the words and expressions from the box. There are two expressions which you dont need to use:

forecasts consumer durable supply

consumer profile single-use demand

product-oriented firm price consumer requirements purchase

1.The ______ for a product is the amount of a good that people are willing to buy over a given time period at a particular price.

2.The quantity of goods and services that producers offer at each price is called ___.

3.Food is an example of a ______ consumer good.

4.Cars, TVs, microwave ovens and compact disc players are called______ products.

5.In a market-oriented firm one of the functions of marketing department is to find out______.

6.A _______ first produces a product and then tries to sell it in the hope that the consumer will buy it.

7.Market researchers try to build up a _______, i.e. the age, sex, occupation and location of its consumers.

8.Market Research Departments develop _______ of consumer motivations and buying habits.

UNIT 14

 

Everybody thinks that you are a success in business: your firm has a profit, people work as a good team and you run the company well. Nothing to worry about? Just the other way round! The more successful you are, the more concerned you are. Your trouble consists of 11 letters COMPETITION.


Date: 2015-01-12; view: 2283


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