16.7 Key Words

Broad: The analysis must be broad enough to capture trends. A small retail chain would have to look beyond its regional operating area in order to understand larger trends that may impact the stores. 16.2

Causality: The relationship between two variables whereby one variable is a direct consequence of the other. 16.4

Control: The degree to which you can separate the effects of a variable on a consequence. 16.4

Correlational Analysis: A form of trend analysis that estimates sales based on the trends of other variables. 16.3

Executive Opinion: The best-guess estimates of a company’s executives. 16.3

Expert Opinion: Is similar to executive opinion except that the expert is usually someone outside the company. Like executive opinion, expert opinion is a tool best used in conjunction with more quantitative methods. As a sole method of forecasting, however, expert opinions are often very inaccurate.  16.3

Exponential Smoothing: A type of moving average that puts more emphasis on the most recent period. 16.3

Fidelity: The degree to which the plan is being implemented as it is supposed to be. 16.4

Honest: A good SWOT analysis is honest. A better way to describe those “strong” product features mentioned earlier would be to say “strong reputation among product designers,” unless consumer acceptance has already been documented. 16.2

Judgment Techniques: Some techniques, though, rely more on people’s opinions or estimates. 16.3

Leading Indicator: Which is a single number that represents a composite of commonly used leading indicators. Some of these leading indicators are housing starts, wholesale orders, orders for durable goods (items like refrigerators, air conditioning systems, and other long-lasting consumer products), and even consumer sentiment, or how consumers think the economy is doing. 16.3

Long Term: Consider multiple time frames. A SWOT analysis that only looks at the immediate future (or the immediate past) is likely to miss important trends. Engineers at Mars (makers of Skittles, M&Ms, and Snickers) visit trade shows in many fields, not just candy, so that they can identify trends in manufacturing that may take a decade to reach the candy industry. 16.2

Marketing Audit: Examination or snapshot of the state of a company’s marketing strategies as they are actually implemented. 16.4

Managerial Control: The first type of control  whereby you have control over how variables in a marketing plan are implemented. 16.4

Marketing Plan: To communicate to everyone in the organization who has what marketing-related responsibilities and how they should execute those responsibilities. 16.1

Market Potential: Total industry-wide sales expected in a particular product category for the time period of interest. 16.3

Market Test: An experiment in which the company launches a new offering in a limited market in order to gain real-world knowledge of how the market will react to the product. 16.3

Moving Average: The rate of change for the past few periods is averaged. 16.3 

Multiple Perspectives: SWOT analyses are essentially based on someone’s perception. Therefore, a good SWOT should consider the perspective of all areas of the firm. Involve people from shipping, sales, production, and perhaps even from suppliers and channel members. 16.2

Response Models: Sophisticated statistical models which are based on how customers have responded in the past to marketing strategies. 16.3

Sales Force Composite: A forecast based on estimates of sales in a given time period gathered from all of a firm’s salespeople. 16.3

Sales Potential: The maximum total revenue it hopes to generate from a product or the number of units of it the company can hope to sell. 16.3

Statistical Control: The second type of control is, whereby you can remove the influence of the variable on the outcome mathematically. 16.4

SWOT Analysis: SWOT stands for strengths, weaknesses, opportunities, and threats. 16.2

Trend Analysis: The marketing executive identifies the rate at which a company’s sales have grown in the past and uses that rate to estimate future sales. 16.3