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RMG400 final review notes for ch.7.docx

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Ryerson University
Retail Management
RMG 400
Hong Yu

chapter7: Buyers use forecasts to answer all of the following questions except: a. How much to purchase? b. Should new products be added? c. What price should be charged? d. Which media should be used to promote the product? SCOPE OF FORECASTING • How much of each product will need to be purchased? • Should new products be added to the merchandise assortment being offered? • How much inventory is needed to support the planned sales? • What price should be charged for each product? • Sales forecasts can include: – Specific products or services (brands or models) – Specific consumer groups (males, over 65) – Time periods (weekly, monthly) – Specific store locations • Preparing sales forecasts requires buyers to think in detailed terms about: – Target market groups the store is trying to serve – Existing and potential competitors – Future trends occurring in the market and the economy DEVELOPING SALES FORECASTS Examining Internal Forces • Future sales can be affected by: – Increasing or decreasing advertising expenditures – Liberalizing or tightening credit policies – Increasing or decreasing retail prices – Changes in store hours or physical facilities Examining External Forces: Economic conditions, Demographic trends, Competitive conditions Economic Conditions • Both the national and local economic climate should be analysed • Headlines from the newspapers affect buyers’ decisions Demographic Trends • You must be alert to all changes in the composition of your customer base • Even lifestyle changes in your target market are noteworthy Competitive Conditions • Be aware of current competitors closing their doors and new competitors’ openings • Your competitors’ promotional strategies may also change Acquiring Needed Data • Primary data sources • Secondary sources Which one of the following is considered to be primary data? a. Information from books and magazines b. Business records from another department in a store c. Data that originates with the specific research being undertaken d. Data that has been gathered for another purpose Primary Data Sources • Retailers use customer surveys to forecast future consumer buying patterns • Techniques include: – Holding weekend focus group sessions – Reading comments from the suggestions box – Speaking with customers and employees Secondary Sources • In volatile times
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