Rafael AlemanMKTG 353

October 11, 2012

Notes

EXTRA CREDIT: Product camp – a professional conference. Whole day and a variety of lecture topics for professionals to participate.

Please note the following extra credit opportunity. You may attend the following professional Product Camp to improve your Exam 1 grade. For each lecture you attend, you may submit a half-page report of what you learn to earn extra credits. You do not need to register to attend lectures. If you do, you get a name tag and T-shirt. http://www.productcampsocal.org/ You may check out some topics of lecture for the day, Saturday, Nov 3: http://productcampsocal.uservoice.com/forums/37073-proposed-topics-for-productcamp-socal-2012/

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It will be a valuable learning experience. Previous sutdents felt small after seeing Scope and complexity of the problems faced by professionals. Learn behavior and aspire to a marketing professional. You will find connections and present yourself, get their twitter account.

Next test is before November 3. Send extra credit week after you attend, any later you will not receive credit.

Important you learned from Tuesday: You can do two different layers of sales pattern.

If you practiced 20 times to get an A in the first exam you now need to practice 30 times for the 2nd midterm.

ON TEST. Mean Absolute perception Error (MAPE)You can look at pattern of sales while

Excel: Highlight column “Unit Case Volume Sales (000)”Insert GraphGraph withRight click infoHighlight a1- b33

Right click ribbonSelect third chart layoutRight click and select Add major gridlines

Seasonal patterns- a cyclical cycle. Peaks in summer and decreases in the winter.The trend 1st quarter of year is higher than last of the previous year

This product is in the introduction-growth stage. We will look at statistical method.

Highlight D5-E33CTRL and holdHighlight G5-G33 CTRLHighlight I5-I33

Answer to essay questions.

RED: Regression shows the trend, the shortcoming of regression is that it doesn’t show the seasonal patternGREEN: Naïve is like a shadow and trails. Its always underneath sales. Cant give you more than one quarter.PURPLE: Moving average is always underestimating sales forecast. Great for mature cycle. It tends to give you overrated sales. Will only give you one quarter.BLUE: Shortcoming for regresiion no seasonal patternShortcoming of MOV AVG when the trend is declining it overestimates

For mature market it smoothes irregular patternStrength of naïve is easeyShortcoming of naïve you cannot get than one quarter in the future.

SHE WILL NOT COLLECT IT SINCE IT WILL BE ON TEST. JUST MAKE SURE TO PRACTICE 20X+

As a manager your job is to come up with a number to give your production manager, marketing manager and those in CSuite.

ON TEST: What is your regression, moving average forecast?Regression is Higher than naïve and moving average?

23,468MM its lower than Naïve, if you go for regression you will grossly overcast.Know your product and seasonal pattern.Before making decision you need to chart the pattern. Create a good forecast.

You always title all your charts‘Forecast Comparison Henson Energy drink”

She will post the answer the answer on Titanium

In your 40-45 years of working life after graduation you will encounter 20,000 new products and 90% will fail.For new product, can you use statistical method. No because there is no historical data.

Sales Management AnalysisPlease visit the web site Survey of Buying Power at http://www.surveyofbuyingpower.com/sbponline/index.jsp. The following are guidelines for using the data service for sales and marketing management.

Buying Power Index (BPI) estimates a geographic market’s ability tobuy. It is a multiple-factor index:

B a s ic BPI = demographic factor * importance weight+ economic factor * importance weight+ distribution factor * importance weight

The factors are measured as follows:= population as a % of the total area * weight

+ income as a % of the total area * weight+ retail sales as a % of the total area * weight

The total importance weight =1Weight allocation for basic BPI = 0.2 + 0.5 + 0.3

Cu s tom BP I modifies the basic BPI by using-different weight allocations-different combination of factors-different geographic areas

BPI is a percentage. It shows an area’s share of the national marketpotential. It assumes that three factors are driving the market demand:1. The area’s share of the nation’s population/households;2. The area’s share of the nation’s disposable income; and3. The area’s share of the nation’s retail sales.

For example, Orange County’s share of the nations’ market is1.1881%. It is computed as follows:BPI =

0.2 * % of U.S. population+ 0.5 * % of U.S. effective buying income+ 0.3 * % of U.S. retail sales

3 basic things will determine the sales of your productPeople (Demographics) – count the populationHow much money they have (Economic) – more income How sent (Distribution) - retail sales level

Factor MeasureDemographic Population % (Multiply) 20% +Economic Income % (Multiply) 50% +Distribution Retail Sales % (Multiply) 30%

(Result) BPI

Uses of Buying Power Index

Look at Orange.XLS

You can get information on how much each city spends on specific retail stores.Buying power index by cityBPI – Buying Power IndexEBI – Effective Buying Income

We found the three factors in the Orange.xls data set (population, income, retail sales)

Buying Power Index – this data set provides infoAnaheim city – BPI = 0.1288This means that if we are selling to whole country, we should expect 0.1288% will come from the city

of Anaheim.We normally don’t sell to the whole USA which is very unrealistic.

Median Household EBI: 97,532 households, if you hold from High to Low, the middle are making $47,188. Means half will make more and the other half will make less than this number

% of EBI by Income Group:20.2% of HH in Anaheim is making that income20.2% times 97,532 will give you number of HH that have make this money.