Question

You are a marketing analyst at a major US clothing retailer. Which three demand determinants (below) are the most important in forecasting sales? Justify your choices.

1.            Consumers' tastes and preferences

2.            The number of buyers in the market

3.            Consumers' income

4.            The price of the related commodities

5.            Consumer expectations

Answer 1

Answer- The three most important determinants which can help forecasting sales are as follows:-

1) Consumer's Taste & Preferences:-It refers to the satisfaction or the utility level the customer gets from the product. The more the customer is satisfied the more he or she will buy the product. Every market has customers with different taste and preferences. Taste and preferences may differ from region or even person to person as it sets out the choices the customers would make in buying the product. As a marketer the most important decision is to consider the customer's taste and preferences as it will he,op to obtain the knowledge about the customer's choices or how they choice a particular product.

2) The number of buyers in the market:- A company can only benefit if the product is sold at a judicious price to a many customers. Every company keeps on increasing it;s customer base to obtain more profit out of it. A market with huge number of buyers can benefit the company as it will be able to sell the product to a large number of customers and create the demand in the minds of many. A marketer generally looks for a market with many buyers as it increases the chances f the company's sales to increase.

3) Consumer's Income:- Customers will be able to buy the product only if they have the income level or if their pocket allows to spend. A marketer must always keep in mind the customers income level as it helps to set the price of the product which will be launched in the market.Income level shows the capacity of the consumers to buy a product.

The above determinants help to choose a market strategy and helps a marketer to forecast the future sales.