Six macroeconomic challenges in Bangladesh

There are six major macroeconomic challenges for Bangladesh's economy. First, accelerating economic growth and maintaining high economic growth over the coming years will remain a big challenge. Two major drivers of economic growth in Bangladesh have been the readymade garments exports and remittances. The dividends from these drivers of growth are likely to decline in the future. There is a need to find new drivers of growth through diversification of the economy and developing productive capacities. In these contexts, stimulating private investment in diversified economic sectors and ensuring efficient public investment remain uphill tasks.

Second, containing inflation is a critical challenge. Bangladesh has been able to avoid high inflationary pressure since 2011. The overall inflation rate has remained below 7 percent. In recent years, the inflation rate is less than 6 percent. However, there are three concerns with respect to the inflation situation in Bangladesh: (i) the overall inflation rate hides the sudden and intermittent steep rise in food prices, especially the price of rice, which affects the poor people; (ii) as the overall inflation rate is a weighted sum of the food and non-food inflation, there are concerns that the non-food inflation in Bangladesh is underestimated due to inappropriate representation of non-food items and their prices in the calculation of inflation rates; (iii) the overall low inflation rate at the national level may not reflect the true picture of the high inflationary pressure faced by different low-income groups as their consumption baskets and related prices are likely to be different from the national averages. Given these concerns, containing inflationary pressure for low-income people will remain a challenge for Bangladesh in the wake of further growth acceleration. 

Third, the management of the exchange rate is a crucial area of concern. Though, for long, Bangladesh has been able to maintain a relatively stable exchange rate regime, the exchange rate in recent times is alleged to be over-valued. In recent years, while Bangladesh's major competitors in the global market, such as China, Vietnam, India, and Sri Lanka, have experienced significant depreciation of their currencies against US dollar, Bangladeshi taka remained quite stable. The analysis of the real effective exchange rate in Bangladesh also shows a misaligned exchange rate regime which, together with high tariff rates on imports, lead to significant anti-export bias. In other words, the current exchange rate and trade policies are not favorable for rapid export expansion in Bangladesh. However, one important point to note here that, while the importance of the correction of anti-export bias for export promotion and diversification cannot be undermined, such correction alone cannot be sufficient to trigger "auto" large supply response in terms of expanding export volumes and diversifying the export basket. A number of supply-side constraints, in terms of weak infrastructure, the high cost of capital, lack of access to credit, and lack of skilled human resources can prevent local producers from expanding exports, and the lack of an enabling business environment can strangle entrepreneurship and innovation. Therefore, the policy options and support measures for exports are much more difficult and involved than the mere correction of anti-export bias.

Fourth, the surged balance-of-payment deficit in recent years remains a big concern for the stability of the macroeconomy. Over the past two years, the economy has been witnessing high growth rate in imports, while the growth rates in exports and remittances have been subdued and unstable, which has led to widening trade deficit and current account deficit. Though the current volume of foreign reserve can meet the import demand of around five months, the volume of the foreign reserve has been on a declining trend since the financial year of 2017. Given the projections of high import demand for construction and industrial raw materials in the coming days on the one hand and unstable global trading environment, thus creating uncertainties for both export and remittance growth, on the other hand, managing a stable balance-of-payment regime will remain a big challenge for the Bangladesh economy. One important lesson Bangladesh can learn from the experiences of the successful countries from southeast Asia is that attracting large scale foreign direct investment (FDI) can ease the pressure on balance-of-payment. Bangladesh is yet to be successful in attracting large-scale FDI. The amount of annual FDI inflow in recent years is only around 2.5 billion USD while the country needs more than USD 10 billion FDI annually to achieve many of its development goals. Therefore, enabling the environment for ensuring large-scale FDI remains a critical task ahead.

Fifth, while the monetary policy by the Bangladesh Bank has been, in general, able to maintain a so-called stable "status quo", it has failed to generate a big push for accelerating private investment. A number of banking scams and escalation of non-performing loans show a major institutional weakness of the financial sector and pose a threat to macroeconomic stability. The high cost of credit is a reflection of the inefficient banking system which discourages inclusive financing. Therefore, the challenge of the monetary policy is more of an institutional issue rather than any narrowly-focused effort to lowering of the interest rate. 

Finally, though the country has been able to maintain a stable fiscal deficit of around 5 percent of GDP over a long time period, in a regime of low tax-GDP ratio of around 10 percent, this has only been possible through keeping the vital social expenditures, like public expenditure on education, health and social protection, at very low levels. However, as the country aspires to achieve stiff development goals in the coming years, public spending on education, health and social protection has to be raised substantially. There is no denying that with such a low tax-GDP ratio many development aspirations will remain unrealized. Though the country has undertaken several reforms to improve tax collection, they have remained unsuccessful due to various institutional weaknesses and vested political patronage. The fiscal policy process thus needs a strong political commitment to simplifying tax systems, strengthening tax administration, and broadening the tax base under a wider reform agenda.

Why is there no market supply curve under conditions of monopoly

3. Why is there no market supply curve under conditions of monopoly?

The monopolist’s output decision depends not only on marginal cost, but also on the demand curve.  Shifts in demand do not trace out a series of prices and quantities that we can identify as the supply curve for the firm.  Instead, shifts in demand lead to changes in price, output, or both.  Thus, there is no one-to-one correspondence between the price and the seller’s quantity; therefore, a monopolized market lacks a supply curve.

4.  Why might a firm have monopoly power even if it is not the only producer in the market?

The degree of monopoly power or market power enjoyed by a firm depends on the elasticity of the demand curve that it faces.  As the elasticity of demand increases, i.e., as the demand curve becomes flatter, the inverse of the elasticity approaches zero and the monopoly power of the firm decreases.  Thus, if the firm’s demand curve has any elasticity less than infinity, the firm has some monopoly power.

5.  What are some of the sources of monopoly power?  Give an example of each.

The firm’s exploitation of its monopoly power depends on how easy it is for other firms to enter the industry.  There are several barriers to entry, including exclusive rights (e.g., patents, copyrights, and licenses) and  economies of scale.  These two barriers to entry are the most common.  Exclusive rights are legally granted property rights to produce or distribute a good or service.  Positive economies of scale lead to “natural monopolies” because the largest producer can charge a lower price, driving competition from the market. For example, in the production of aluminum, there is evidence to suggest that there are scale economies in the conversion of bauxite to alumina.  (See U.S. v. Aluminum Company of America, 148 F.2d 416 [1945], discussed in Exercise 8, below.)

6.  What factors determine the amount of monopoly power an individual firm is likely to have?  Explain each one briefly.

Three factors determine the firm’s elasticity of demand:  (1) the elasticity of market demand, (2) the number of firms in the market, and (3) interaction among the firms in the market.  The elasticity of market demand depends on the uniqueness of the product, i.e., how easy it is for consumers to substitute away from the product.  As the number of firms in the market increases, the demand elasticity facing each firm increases because customers may shift to the firm’s competitors.  The number of firms in the market is determined by how easy it is to enter the industry (the height of barriers to entry).  Finally, the ability to raise the price above marginal cost depends on how other firms react to the firm’s price changes.  If other firms match price changes, customers will have little incentive to switch to another supplier.

7.  Why is there a social cost to monopoly power?  If the gains to producers from monopoly power could be redistributed to consumers, would the social cost of monopoly power be eliminated?  Explain briefly.

When the firm exploits its monopoly power to raise the price above marginal cost, consumers buy less at the higher price.  Consumers enjoy less surplus, the difference between the price they are willing to pay and the market price on each unit consumed.  Some of the lost consumer surplus is not captured by the seller and is a deadweight loss to society.  Therefore, if the gains to producers were redistributed to consumers, society would still suffer the deadweight loss.

8.  Why will a monopolist’s output increase if the government forces it to lower its price?  If the government wants to set a price ceiling that maximizes the monopolist’s output, what price should it set?

By restricting price below the monopolist’s profit-maximizing price, the government can change the shape of the firm’s marginal revenue, MR, curve.  When a price ceiling is imposed, MR is equal to the price ceiling for all quantities lower than the quantity demanded at the price ceiling. If the government wants to maximize output, it should set a price equal to marginal cost.  Prices below this level induce the firm to decrease production, assuming the marginal cost curve is upward sloping.  The regulator’s problem is to determine the shape of the monopolist’s marginal cost curve.  This task is difficult given the monopolist’s incentive to hide or distort this information.

9. What would the social gain be if this monopolist were forced to produce and price at the competitive equilibrium?  Who would gain and lose as a result?

The social gain arises from the elimination of deadweight loss.  Deadweight loss in this case is equal to the triangle above the constant marginal cost curve, below the demand curve, and between the quantities 5.67 and 11.3, or numerically

(18.5-10)(11.3-5.67)(.5)=$24.10.

Consumers gain this deadweight loss plus the monopolist’s profit of $48.17.  The monopolist’s profits are reduced to zero, and the consumer surplus increases by $72.27.

We write the percentage markup of prices over marginal cost as (P - MC)/P. For a profit-maximizing monopolist, how does this markup depend on the elasticity of demand? Why can this markup be viewed as a measure of monopoly power?

We can show that this measure of market power is equal to the negative inverse of the price elasticity of demand.

The equation implies that, as the elasticity increases (demand becomes more elastic), the inverse of elasticity decreases and the measure of market power decreases.  Therefore, as elasticity increases (decreases), the firm has less (more) power to increase price above marginal cost.

A monopolist is producing at a point at which marginal cost exceeds marginal revenue. How should it adjust its output to increase profit?

 When marginal cost is greater than marginal revenue, the incremental cost of the last unit produced is greater than incremental revenue.  The firm would increase its profit by not producing the last unit.  It should continue to reduce production, thereby decreasing marginal cost and increasing marginal revenue, until marginal cost is equal to marginal revenue

Customer Managers

 In the new customer department, customer and segment managers identify customers’ product needs. Brand managers, under the customer managers’ direction, then supply the products that fulfill those needs. This requires shifting resources—principally people and budgets—and authority from product managers to customer managers. (See the sidebar “What Makes a Customer Manager?”) This structure is common in the B2B world. In its B2B activities, Procter & Gamble, for instance, has key account managers for major retailers like Wal-Mart. They are less interested in selling, say, Swiffers than in maximizing the value of the customer relationship over the long term. Some B2C companies use this structure as well, foremost among them retail financial institutions that put managers in charge of segments—wealthy customers, college kids, retirees, and so forth—rather than products.

What Makes a Customer Manager?

IN A SENSE, THE ROLE of customer manager is the ultimate expression of marketing (find out what the customer wants and fulfill the need) while the product manager is more aligned with the traditional selling mind-set (have product, find customer).

Jim Spohrer, the director of Global University Programs at IBM, hires what UCal Berkeley professor Morten Hansen calls “T-shaped” people, who have broad expertise with depth in some areas. Customer managers will be most effective when they’re T-shaped, combining deep knowledge of particular customers or segments with broad knowledge of the firm and its products. These managers must also be sophisticated data interpreters, able to extract insights from the increasing amount of information about customers’ attitudes and activities acquired by mining blogs and other customer forums, monitoring online purchasing behavior, tracking retail sales, and using other types of analytics. While brand managers may be satisfied with examining the media usage statistics associated with their product, brand usage behavior, and brand chat in communities, customer managers will take a broader and more integrative view of the customer. For instance, when P&G managers responsible for the Max Factor and Cover Girl brands spent a week living on the budget of a low-end consumer, they were acting like customer managers. The experience gave these managers important insights into what P&G, not just the specific brands, could do to improve the lives of these customers.

We’d expect the most effective customer managers to have broad training in the social sciences—psychology, anthropology, sociology, and economics—in addition to an understanding of marketing. They’d approach the customer as behavioral scientists rather than as marketing specialists, observing and collecting information about them, interacting with and learning from them, and synthesizing and disseminating what they learned. For business schools to stay relevant in training customer managers, the curriculum needs to shift its emphasis from marketing products to cultivating customers.

---

In a customer-cultivating company, a consumer-goods segment manager might offer customers incentives to switch from less-profitable Brand A to more-profitable Brand B. This wouldn’t happen in the conventional system, where brand and product managers call the shots. Brand A’s manager isn’t going to encourage customers to defect—even if that would benefit the company—because he’s rewarded for brand performance, not for improving CLV or some other long-term customer metric. This is no small change: It means that product managers must stop focusing on maximizing their products’ or brands’ profits and become responsible for helping customer and segment managers maximize theirs.

The 3Ps of Marketing Communications Strategy:

 •         Pull strategies: used to communicate with end-user customers. These may be consumers but they might also be other organisations within a business-to-business context. 

 •         Push strategies:  used to communicate with channel intermediaries, such as dealers, distributors and retailers, otherwise referred to as the ‘trade’ or channel buyers.

 •         Profile strategies: used to communicate with a range of stakeholders, such as the local community, trade unions, suppliers, local and national government. 

 

Selection of Media and Factors Responsible for selection of Media

 SELECTION OF MEDIA

• Advertising media are the channels through which a product’s advertising is carried to perspective consumers. A medium may contain a mixture of editorial or entertainment material and advertising. Media are usually classified either in terms of their editorial context or in terms of the way in which the message is delivered. These media could be in written text, symbols, icons, graphs, audio, pictures, video, live audio, live presentation or performance etc. These media requirements are derived from the objectives. The media requirements define what the media programmer must contribute if the objectives are to be realized. These requirements are vary from product to product, because each product has a unique identity.

FACTORS RESPONSIBLE FOR SELECTION OF MEDIA

• The problem of selection of the best medium or media for a particular advertiser will vary greatly, depending on the particular situation, circumstances and different other factors in which a person in conducting individual business. Media selection involves a number of major factors which influence the decision of the advertiser and therefore, the same must be considered while selecting the media. The most significant of these factors are:
• THE OBJECTIVES OF THE CAMPAIGN:     The objectives of the campaign influence media selection from a somewhat different standpoint. An institutional advertising campaign may be run in a different media than would a product advertising campaign for the same company. In the case of product for which the dealer is very important in the ultimate sale to the consumer, and far more significant than the influence of consumer advertising, the advertiser may select media primarily for the effect they will have on dealers. So, the objective of influencing dealers will be the prime factor in the selection of the medium to use.
• THE BUDGET AVAILABLE:  The advertising budget is concerned with two major decisions about how the advertising effort will be carried out. First, how much is to be spent for advertising in the coming period? Second, how much budget is to be allocated to different areas within the company’s total sales territory? And how much budget be allocated for media? Because the budget determines the weight of advertising effort which is an important variable in determining the effectiveness of the entire advertising effort the product might be one for which actual demonstration on TV would be highly desirable. Yet the advertiser would be unable to sponsor (or even cosponsor) such a programme because its cost would exceed the total advertising budget. The advertiser might believe it desirable to use a multi-color advertisement in a magazine not only to reach desired prospects, but also to influence the trade favourably. But if he still find that his budget does not permit even that type of ad in the magazine, then the advertiser must turn to a medium in which he can get sufficient participation or a sufficient schedule of insertions to achieve an effective programme. So the availability of funds must be considered in planning and selection of media.
• RESEARCH CONCERNING THE CLIENTELE:     A factor that has become more significant is the number of people actually reached by a medium. More and more consideration is being given to the concept that the most significant aspect of coverage from the advertiser’s viewpoint is in terms of the total audience potential. This is indicated by the total number of readers of the print medium or total number of sets turned in the case of electronic media. Audience of different types of media cannot be compared directly because of the differences in the kind of advertising message reaching the consumer and somewhat different terms in which audience is measure.
• THE RODUCT:   The characteristics of the product have an important influence on the decisions involving the selection of media which shall carry the advertising message. Most media are becoming extremely liberal in their criteria for accepting advertisements. Certain individual media will not take advertising for certain specific types of products. Restrictions also may prohibit use of certain media by advertisers of specific items. The general characteristics of the product may also strongly influence the type of media used. That is, if the product has a certain personality or image, certain media may be appropriate to maintain or develop the image; whereas other media may tend to diminish or distort this personality or image. After having the understanding of different types of product one can solve the problem of choosing the media best suited for the product. The types of product may generally be expressed as, consumer product, consumer-durable product, mass product, luxury product, industrial or technical product, ethical pharmaceutical product, service product, and public service product.
• TYPE OF MESSAGE OR SELLING APPEAL:  The remarkable thing about advertising is that it can prompt people to buy a specific advertised product. Thus an appeal or advertising appeal is any statement designed to motivate a person to action. In seeking to move a person towards buying a product, the advertiser likewise must appeal to some of the manifold motives i.e., the functional needs and psychological needs of a person, that prompt a man to act as a desire to fulfill a hope, ambition, need, interest or goal. The central premise of the advertising appeal or message is its promise of a benefit the product will render to the buyer.
• RELATIVE COST: The relative cost is another factor which influences the selection of media. The total budget available and the ability to do an effective job of advertising within that budget in a particular type of medium is significant. When the type of media has been determined, then the cost factor becomes a matter of the relative cost of the individual media. In case of newspapers, this relationship is determined as per centimeter per column, and in the case of magazines, the cost per page is worked out.
• CLUTTER: In any medium, the advertiser’s message must compete with other advertisements for the consumer’s attention. Media in which the advertiser must expect a great number of competitive messages are termed as “cluttered”. Most newspapers are highly competitive cluttered media vehicles. In developed countries large departmental stores frequently purchase multiple full pages or, at least an advertisement size that dominants the page.
• MISCELLANEOUS FACTORS: Several other factors which sometimes enter into the selection of media, are not of enough significance to warrant lengthy discussion, although they may be of some importance in specific situation.

What are some fundamental marketing concept

 The various fundamental concepts are :-

 (1) Exchange Concept : The Exchange concept holds that the exchange of a product between seller & buyer is the central idea of marketing Exchange is an important part of marketing, but marketing is a much wider concept.

 (2) Production Concept : The production concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available & expensive. Manager of production oriented business concentrate on achieving high production efficiency low cost & mass distribution. Eg. Haier in China take advantage of the country’s huge inexpensive labor pool to dominate the market, to manufacture PC & domestic appliances.

 (3) Product Concept : This concept holds that consumers will prefer those products that are high in quality, performance or innovative features.

Managers in these organization focus on making superior products & improving them. Sometimes, this concept leads to marketing myopia, Marketing myopia is a short sightedness about business. Excessive attention to production or the product or selling aspects at the cost of customer & his actual needs creates this myopia.

 (4) Selling Concepts : This concept focuses on aggressively promoting & pushing its products, it cannot expect its products to get picked up automatically by the customer. The purpose is basically to sell more stuff to more people, in order to make more profits. Eg. Coca Cola

 (5) Marketing Concept : The marketing concept emerged in the mid 1950’s. The business generally shifted from a product – centered, make & sell philosophy, to a customer centered, sense & respond philosophy. The job is not to find the right customers for your product, but to find right products for your customers. The marketing concept holds that the key to achieving organizational goals consist of the company being more effective than competitors in creating, delivering & communicating superior customers value. This concept puts the customers at both the beginning & the end of the business cycle. Every department & every worker should think customer & act customer.

 Distinguishing Features of the Marketing Concept :

 (i) Consumer Orientation : The purpose of any business is to create a customer. It is the customer who determines what a business is-

 (ii) Integrated Management with Marketing as the Fulcrum : Integrated management means that all the different functions of a business must be tightly integrated with one another. This is essential because every function has a bearing on the consumers & the aim is to see that all the functions make a favourable impact on the consumer.

 (iii) Consumers Satisfaction : The marketing concept emphasizes that it is not enough if a firm has consumer orientation, it is essential that with such an orientation, it should lead to consumer satisfaction.

 (iv) Realization of all Organizational Goals, Including Profits : The firm should not forget its own interests. It treats consumer satisfaction as the pathway to the attainment of goals of the organization. 

 In short the marketing concept essentially represents a shift in orientation.

From production orientation to marketing orientation.

From product orientation to customers orientation.

From supply orientation to demand orientation.

From sales orientation to satisfaction orientation

From internal orientation to external orientation.

 (6) Social Marketing Concept : This concept holds understanding broader concerns & the ethical, environmental & legal & social context of marketing activities & programs. The cause & effects of marketing extend beyond the company & the consumes to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing & could play in terms of social welfare.

 (7) Holistic Marketing Concept : This concept is based on the development, design & implementation of marketing programs, processes & activities that recognizes their breadth. Holistic concept realizes that “everything matters” with marketing. 

Role of Marketing of Financial services in the Economic Development Like Bangladesh 

• Increase in agricultural production
•  Development of foreign trade
•  Market development and expansion
•  Proper distribution
•  Increase in national income
•  Creating employment opportunity
•  Facilitating competition
•  Increase export
•  Increasing industrial production
•  Creation of new utility of product
•  Maintenance of economic stability
•  Service marketing
•   Development of standard of living

What is the nature & scope of marketing & why is marketing important

Nature & Scope of Marketing: Marketing is an ancient art & is everywhere. Formally or informally, people & organizations engage in a vast numbers of activities that could be called marketing. Good marketing has become an increasingly vital ingredient for business success. It is embedded in everything we do- from the clothes we wear, to the web sites we click on, to the ads we see.

  Marketing deals with identifying & meeting human & social needs or it can be defined as “meeting needs profitably”.

 The American Marketing Association has defined marketing as “an organizational function & a set of processes for creating, communicating & delivering value to the customers & for managing customer’s relations in ways that benefit the organization & the stake holders.

 Or

 Marketing management is the art & science of choosing target markets & getting, keeping & growing customers through creating, delivering & communicating superior customer value.

 Or

 “Delivering a higher standard of living”

 For a managerial definition, marketing has been defined as “the art of selling products” but people are surprised when they hear that the most important part of marketing is not selling. Selling is only the tip of marketing iceberg.

 Peter Drucker says it this way that the aim of marketing is to know & understand the customer so well that the product or service fits him & sells itself. All that should be needed is to make the product or the service available.

  Eg. The success of Indica, the first indigenously designed car by Tata Motors. Backed by strong customers delight, the company designed a vehicle with luggage space & legroom & offered it a price easily available & affordable to middle class.

 (2) Gillette launched its March III razor.

Marketing people are involved in marketing 10 types of entities: goods services, events, experiences, persons, places, properties, organizations, information & ideas.

Therefore ideal marketing should result in a customer who is ready to buy.

 Importance of Marketing: Financial success of any organization depends upon marketing ability of that organization. There should be sufficient demand for products & services so the company can make profit. Therefore many companies created chief marketing officer (CMO) position to put marketing on a more equal footing with other e-level executives.

 Marketing is tricky & large well known business such as Levi’s, Kodak, Xerox etc. had to rethink their business models, Even Microsoft, Wal-Mart, Nike who are market leaders cannot relax.

 Thus, we can say that making the right decision is not easy & marketing managers must take major decisions about the features of the product prices & design of the product, where to sell products & expenditure on sales & advertising. Good marketing is no accident but a result of careful planning & execution. Marketing practices are continuously being refined to increase the chances of success. But marketing excellence is rare & difficult to achieve & is a never ending task

 Eg. NIRMA – The brand icon of the young girl has adorned the package of Nirma washing powder. The jingle has become one of the enduring times in Bangladeshi advertising.

Define sales forecasting? Discuss the produce & the methods of sales forecasting

 Sales forecast is the basis of corporate planning forecasting is a systematic attempt to Product/ Service the future on the basis of known facts. It is the result of numerous assumption made about the external and internal environment of firms.

 Sales forecasting is the estimate level of the company sales based on chosen marketing plan and assumed marketing environment. 

OR

Sales forecasting is the climate of sales during some specific future period time & under a pre determined marketing plan of the firm.

 Important –

 1. it is the foundation of planning.

2. Companies uses the sales forecast to allocate resource across different functional areas.

3. It is the key factor in all operational planning throughout the company.

4. It serves as a base for sales force planning.

5. It plays a major role in the success of the organization.

6. It is the key to sales management.

7. It helps in profitability of the firm

8. It helps in facilitating Product/ Service ion planning

9. It helps in better financial planning.

10. It is developing sales strategies and promotional plans

11. It helps in suggesting R & D.

12. Also helps in better inventory control & sales quota determination.

 Process of sales forecasting :-

 Determination of goals – The sales manager should decide the goals for sales forecasting. The objectives may include determination of sales publicity program, marketing methods, sales quota determination, estimation of working capital etc. Determining the factors affecting sales – The controllable factors are like marketing & advertising policy, organization structure etc. & the non controllable factors like political & social systems, seasonal fluctuations etc. must be determined. Selection of techniques – Suitable methods for sales forecasting must be selected keeping in view the objective time intervals resources and nature of the firm. Correction of data – This is the step of collecting various kinds of information’s & data related with future demands of Product/ Services. Analysis of market potential –

The next step is to analyze the data of market potential. Analysis requires two steps>>

 a) Select the market associated with Product/ Service demand.

b) Eliminate those market segments that do not contain prospective business.

 Forecasting of future sales:- 

 Sales projection should be made for an entire Product/ Service line or for an individual Product/ Service or for companies total market or individual market segment. 

 Making operational program & the budget:-

 The firm determines the requirements for various operational activities such as Product/ Service ion purchasing marketing capital assets. On the basis of forecast the related plans such as sales budget sales quotes sales publicity and material acquirement are formulated Derivation of a sales volume objectives:-

A sales volume objectives for the coming operative period is hoped for the outcome of a company’s short range sales forecasting procedure, The sales volume should be consistent with managements profit  aspirations and the companies market capabilities.

 Evaluation & revision of forecasts:-

 The sales executives should evaluate the forecasts carefully. The company should examine all the assumption on which it is based. The company should the forecasting process periodically. The first step in the review is to determine the accuracy of past forecasts to learn if changes are needed in the way forecasts are made if the company finds that sales forecasts are significantly different from actual sales in the period it should undertake a review of the sales forecasting process.

 Techniques of sales forecasting:-

 I. Survey methods:-

a) Executive opinion

b) Prudent manager forecasting

c) Delphi method

d) Sales force composite

e) Detecting differences in figures

f) Survey of buyer intention

g) Product/ Service testing and test marketing.

 a) Executive opinion – It consists of obtaining the views of top executives regarding future sales. The forecasts made by executives are arranged to yield one forecast for all executives or the differences are reconciled through discussion.

 b) Product/ Service manager forecasting – In this method the company personnel are asked to assume the position of purchasers in customer companies. They must then look at company sales from a customer’s view point & prudently evaluate sales.

 c) Delphi method – This method begins with a group of knowledgeable individuals estimating future sales. Each person makes a prediction without knowing others in the group have responded. these estimates are summarized. Now knowing how the group responded. They are asked to make another Product/ Service ion on the same issue. This process of estimates & feedback is continued for several rounds. In final round involves face to face discussions among the participants.

 d) Sales force composite – This method is based on collecting an estimates from each salesperson of the Product/ Services they expect to sell in the sale forecast period. The estimate may be made in consultation with sales executives and customer BDT

 e) Detecting differences in figures method – In this method the sales person produces figures broken down by Product/ Service & customers and the area manager produces figures for the sales persons territory. They then meet & must reconcile any differences in figures. the process proceeds with the area manager producing territory by figures.

 f) Surveys of buyer’s intentions – This method consist of contacting potential customers & questioning them about whether or not they would purchase the Product/ Service at the price asked.

 g) Product/ Service testing & test marketing – This technique is of value for new or modified Product/ Services for which no previous sales figures exists & where it is difficult to estimate. Likely demand. It involves placing the pre Product/ Serviceion model with a sample of potential users beforehand & noting their reactions to the Product/ Service. Test marketing involves the limited launch of a Product/ Service in a closely defined geographical test area.

 II. Mathematical methods :-

 a) Moving average technique – Simplest way to forecast sales is to predict that sales in the coming period will be equal to sales in the best period. This forecasts assumes that conditions in the last period will be same as the conditions in the coming period.

 SALES t+1 salest + salest-1 + sales + s………………… salest-n

 SALESt+1 = Forecasted sales

 SALESt = Sales in the present period.SALESt+1 = Sales in the period immediately past.

 b) Exponential smoothing models – It is a type of moving average that represents a weighted some of all past numbers in a time series. with the heaviest weight placed on the most recent data.

 c) Regression analysis – This technique is used to project sales trends in the future. The sales plotted are for each past time period. It determines and measures the associations between the sales & other variables.

 d) Projection of past sales – It takes a variety of forms. · To set the sales forecasts for the coming year at the same figure. May be moving average of the sales figures for several past yea BDT

 e) Time series analysis – It is a statistical procedure for studying historical sales data this process involves measuring 4 types of sales variations – long term trends, cyclical changes, seasonal variations & regular fluctuations. Then a mathematical model about the past behavior of the series is selected assumed values for each types of sale variation are insisted and sale forecast is made. 

 f) Market factor analysis – Market factor analysis determines market factors & measures their relationships to sales activity.

 g) Correlation analysis – This method takes in to account the association between potential sales of the Product/ Service and market factor affecting its sales. 

 h) E-charts – this technique is furtherance of moving average technique. It also shows the monthly sales & cumulative sales.

What are the needs for evaluation of sales promotion program

 What are the needs for evaluation of sales promotion program? Discuss the methods of evaluations of sales promotion program.

OR

Discuss the needs for evaluations of sales promotion program.

OR

Why the need arises for evaluations of sales promotion program? Explain.

 Though almost all companies resort to sales promotion techniques , only some of them follow it in a planned way. The conditions for the success of sales promotion program are as follows:-

 1. Identify the requirement – The firm needs to find out. It is to bring in substantiate extra sales immediately. It is to offered accumulated stocks ? It is to regain loosing consumer interest in the Product/ Service etc.

 2. Identifying the right promotion program-The firm has to select the program suitable for current need & situation the choice of the firm should be deducted according to the resources available with the firm.

 3. Enlisting the involvement of salesmen- Often sales promotion program are conceded & planned at the head office . But for the campaigns to succeed, it is essential that the salesmen be briefed on the contest & contest of the program. They have to be informed of their roles in the conduct of the program.

 4. Enlisting the support of the dealers:- It is also essential to enlist then support of the dealers in any large scale sales promotion venture. Since the major part of the activity is around the dealer shop, the pop material and the Product/ Service under campaign will get the required prominence. Only if the leader so dialed

 5. Enlisting the advertisement agency’s support:- The advertising agencies support is also essential for the successful working of a sales promotion campaign. carrying out a sales promotion campaign is as challenging as conditioning an advertising campaign. So companies while commenting heavy finds for sales promotion make it a point ensure that that they benefit from the experience and expertise of their agency.

 6. Timing of the campaign:- The sales need of the company is the prime factor that decides the timing. But the firm has to insider factors like seasonality of purchase of Product/ Service.

 Need for evolution:- The need for evaluating the sales promotion programs are-

 1. Identifying growth and development opportunity.

2.Taking correction steps in case of any draw back.

3.To measure the effectiveness and achievements of objectives.

4.Facilities for future planning.

5.To encourage for research & innovations.

6.To motivate the employees into have contributor.

7. to know the maturity limit of sales promotion program.

8.To study new & modern tools of promotion.

9.To get allocated maximum budget for sales promotion.

  Methods of evolution:-

 1. Sales data method- This method is a widely a accepted practice. In this method , sales volume or market share prior to any sales promotion techniques are measured . Eg. If market share of a Product/ Service before the introduction of sales promotion is 4% , during the period 10% & immediately after the program 6% ,Thus giving an increase of 8%. Shows' that new customers are created by the sales promotion program.

 2. Consumer panel data- This technique help to identify that how the customers have been motivated by the sales promotion technique for longer purchase . How much quality have the customers purchased & What were the charges of their buying behavior after the sales promotion program. This technique help to identify the various classes of customers on new or old customers / women / men / industrial / general customers etc. 

 3. Consumer surveys- This method collects various kinds of information about the customers so as to analysis the effectiveness of sales promotion. The analysis of such information help to know following things-

 1) The numbers of customers who have remembered the techniques used.

2) The views opinion about these techniques.

3)How these technique have been helpful in influencing the buyer’s behavior & brand chore of customer?

4)Do the customer require any innovation to be differed in the Product/ Service?

5)Do these techniques improve the image of the firm?

6)Do they feel like using these techniques through the year?

 4. Experiment methods- The effectiveness of sales promotion technique may be measured by experimenting them in selected markets. However there can be certain difficulties. They are as follows-

 1) The consumer always looks for deals customers are interested only in the purchase in the items Which offer certain additional incentive with that of the Product/ Service.

 2) The promotional tools at times can be very costly as, if the organization does not get expected results. Then the price of Product/ Service may be increased. 

 3) The cooperation from middlemen might not be smooth.