Chapter 3: Collecting Information and Forecasting Demand

Flashcards covering key terms and concepts from Chapter 3 on Collecting Information, Analyzing the Macroenvironment, and Forecasting Market Demand.

Marketing Information System (MIS)

A system consisting of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Order-to-Payment Cycle

The heart of the internal records system that entails the process orders go through once received by the company, including preparing invoices, shipping documents, and handling out-of-stock items.

Data Mining

The practice where analysts extract fresh insights into neglected customer segments, recent customer trends, and other useful information from stored databases.

Sales Information System

A system that provides managers with up-to-date information on current sales of individual products.

Marketing Intelligence System

A set of procedures and sources that managers use to obtain everyday information about developments and happenings in the marketing environment.

Macroenvironment

Uncontrollable external forces and elements that impact a company, including demographic, economic, natural, technological, political-legal, and sociocultural factors.

Fad

A direction or event that is unpredictable, short-lived, and without social, economic, and political significance.

Trend

A direction or sequence of events that has momentum and durability, revealing the shape of the future and providing strategic direction.

Megatrend

A large social, economic, political, and technological change that is slow to form, but once in place, influences society for between 7 and 10 years or longer.

Cohorts

Groups of individuals born during the same time period who travel through life together.

Corporate Environmentalism

The practice of recognizing the need to integrate environmental issues and sustainability into a firm's strategic plans.

Sociocultural Environment

The complex of social and cultural factors from which individuals absorb a worldview defining their relationships to themselves, others, organizations, society, nature, and the universe.

Core Cultural Values

Fundamental beliefs and values passed from parents to children and reinforced by major social institutions, which are highly persistent and difficult for marketers to change.

Secondary Cultural Values

Beliefs and values that are more open to change over time and present opportunities for marketers to influence.

Subcultures

Groups within a society that share distinct values, beliefs, preferences, and behaviors emerging from their specific life experiences or circumstances.

Political Action Committees (PACs)

Special-interest pressure groups that lobby government officials and pressure business executives to protect specific consumer rights or social interests.

Potential Market

The set of consumers who express a sufficient level of interest in a market offer.

Available Market

The set of consumers who have interest, income, and access to a particular market offer.

Qualified Available Market

The set of consumers who possess interest, income, access, and the necessary qualifications for a specific market offer.

Target Market

The specific part of the qualified available market that a company decides to pursue with its marketing efforts.

Penetrated Market

The set of consumers who are actively buying the company's product or service.

Measures of Market Demand

A framework for demand estimation that spans 90 different types across six product levels, five space levels, and three time levels.

Market Demand

The total volume that would be bought by a defined customer group in a defined geographical area, time period, marketing environment, and marketing program.

Market Demand Function

A curve illustrating estimated market demand plotted against varying levels of industry marketing expenditure in a given environment.

Market Minimum ($Q_1$)

The base level of sales that would occur automatically without any demand-stimulating industry marketing expenditures.

Market Potential ($Q_2$)

The upper limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.

Expansible Market

A market whose overall size is heavily influenced by the level of industry marketing expenditure, resulting in a large gap between $Q_1$ and $Q_2$.

Nonexpansible Market

A market whose total size is not significantly affected by industry marketing expenditure levels, displaying a small gap between $Q_1$ and $Q_2$.

Market Penetration Index

A comparison calculated between the current level of market demand and the overall potential level of market demand.

Share-Penetration Index

A comparison calculated between a firm's current market share and its potential market share.

Product-Penetration Percentage

The percentage of ownership or usage of a specific product or service within a target population.

Market Forecast ($Q_F$)

The level of market demand corresponding to the expected actual level of industry marketing expenditure in a given period.

Company Demand

A company's estimated share of market demand at alternative levels of company marketing effort in a given time period.

Company Sales Forecast

The expected volume of company sales based on a chosen marketing plan and an assumed marketing environment.

Sales Quota

A sales target set for a product line, division, or representative, primarily used by management to define and stimulate sales effort.

Sales Budget

A conservative estimate of expected sales volume used primarily for current purchasing, production, and cash flow decision-making to avoid excess risk.

Company Sales Potential

The upper sales limit approached by company demand as company marketing effort increases relative to competitors.

Total Market Potential

The maximum sales available to all firms in an industry during a given period under a given level of marketing effort and environmental conditions.

Chain-Ratio Method

A method of estimating total market potential that multiplies a base population number by several sequential adjusting percentages.

Market-Buildup Method

An area market potential estimation method primarily used by business marketers that identifies all potential buyers in each territory and estimates their purchasing capacity.

Multiple-Factor Index Method

An area market potential estimation method used primarily by consumer marketers that estimates regional potential using weighted demographic and economic proxies.

Delphi Method

A forecasting technique in which a panel of experts exchange views and iteratively refine individual estimates into a combined group estimate.

Exponential Smoothing

A time-series statistical technique that estimates future sales by combining an average of past sales with recent sales, placing heavier weight on recent data.