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Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge
End of Chapter Discussion Questions and Answers
1. Given that absolute market potential almost always exceeds actual industry sales, why
do marketers bother to make potential estimates? Discuss four decisions that a
marketer of industrial grinding machinery might make based on such potential
estimates.
Answer:
Student answers may vary. Answers should include elements such as:
Market potential forecasts are helpful in designing budgets, deciding on resource allocation
and assessing marketing alternatives. They are much better than nothing.
2. To more effectively allocate promotion expenditures and sales efforts, the marketing
manager for a company marketing frozen food entrées would like to know the relative
market potential for such products in every county in the United States. What
variables would you include in a multi-factor index for measuring relative potential?
Explain your rationale for including each variable. Where might you find up-to-date
information about each of the variables in your index?
Answer:
Student answers may vary. Answers should include elements such as:
5-1
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge
3. Suppose you are the product manager responsible for General Electric’s line of trash
compactors. After many years, the product has yet to gain acceptance by many
consumers. Use the diffusion of innovation theory discussed in the text to explain why
trash compactors have achieved such poor market penetration. What does this imply
concerning the shape of the rest of the trash compactor’s life-cycle curve? What actions
might you consider taking to increase the market penetration for this product?
Answer:
Student answers may vary. Answers should include elements such as:
5-2
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 05 - Measuring Market Opportunities: Forecasting and Market Knowledge
Action that might be considered:
It seems that finding a compelling reason for compacting trash would boost diffusion. That
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© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
