Market Trend in Various Industries - Assignment Example

Market Trend Name: Tutor: Course: Date: Exercise 14 The Australian Bureau of Statistics analyses the retail trade in Australia to establish market trend in the various industries and sectors of the economy. The retail trade is an important indicator of the performance of the economy. As at March, 2014 the retail trade statistics in Australia as determined by the Australian Bureau of Statistics are indicated as follows; Source: Australian Bureau of Statistics The graph of the monthly turnover at current prices and that of the monthly turnover in volume terms indicate that there is relationship between the retail trade turnover and the volume traded. The data indicate a directly proportional relationship between the volume traded and the retail turnover. This implies that the higher the volume traded in the retail markets, the higher the retail trade turnover, and vice versa. Therefore, marketers should aim at make more sales so as to achieve higher turnover at current prices. The market trend data for retail trade indicate a rise of 0.5% in March, 2014. In January and February, the trend estimate of the retail trade in Australia rose by 0.6%. In addition, some industries recorded a rise in trend estimate, while others recorded a decrease in retail trade trend estimate. The retailing industries that recorded a rise in trend terms in 2014 include food retailing (0.5%), cafes, restaurants and takeaway food services (1.0%) and Household goods retailing (1.1%). The industries that fell in trend terms include department stores (-0.6%), and clothing, footwear and personal accessory (-0.2%). Therefore, based on the current retail trade turnover trend in Australia, household goods retailing and cafes, restaurants and takeaway food services are the more profitable possible investment ventures for investors. Exercise 16 1. Probabilistic Modelling: This is a statistical analysis tool which aims at establishing a statistical model that can be used to estimate the probability of an event occurring in future, based on historical data. The probabilistic Modelling is of great significance to marketers. In market surveys, marketers collect data and subsequently analyze the data to determine the different factors that affect and influence consumer behaviour. Therefore, from the market data analysis, it can be established which variables negatively or positively influence consumer purchasing behaviour. With the relationship of the different market variables determined, a statistical model representing such a relationship can be established. Therefore, to promote sales of the different products, marketers need to first determine how advertising and other forms of sales promotion may affect the factors that influence the consumer purchasing behaviour. This will subsequently enable the marketers develop a message strategy and appeal, and also select an advertising media that will most likely influence consumers to purchase their products and services. 2. Probability tree: This is a statistical tool that enables us to see all possible outcomes of an event and their corresponding probability. Therefore, using probability tree, we can determine the expected value of each possible outcome and subsequently established which event outcome is most profitable or otherwise. A decision tree showing the possible gains of a company’s decision to consolidate and promote sales the existing product and that of developing a new product is as follows; The expected value for each of the four decision branches is as follows; a) Expected value develop new product (develop thoroughly) is given by; EV develop new product (develop thoroughly) = EV good + EV moderate + EV poor EV develop new product (develop thoroughly) = (0.4 x $500,000) + (0.4 x $25,000) + (0.2 x $1,000) EV develop new product (develop thoroughly) = $200,000 + $10,000 + $200 EV develop new product (develop thoroughly) = $210,200 b) Expected value develop new product (develop rapidly) is given by; EV develop new product (develop rapidly) = EV good + EV moderate + EV poor EV develop new product (develop rapidly) = (0.1 x $500,000) + (0.2 x $25,000) + (0.7 x $1,000) EV develop new product (develop rapidly) = $50,000 + $5,000 + $700 EV develop new product (develop rapidly) = $55,700 c) Expected value consolidate existing product (strengthen products) is given by; EV consolidate existing product (strengthen products) = EV good + EV moderate + EV poor EV consolidate existing product (strengthen products) = (0.3 x $200,000) + (0.4 x $10,000) + (0.3 x $3,000) EV consolidate existing product (strengthen products) = $60,000 + $4,000 + $900 EV consolidate existing product (strengthen products) = $64,900 d) Expected value consolidate existing product (reap without investing) is given by; EV consolidate existing product (reap without investing) = EV good + EV poor EV consolidate existing product (reap without investing) = (0.6 x $10,000) + (0.4 x $1,000) EV consolidate existing product (reap without investing) = $6,000 + $400 EV consolidate existing product (reap without investing) = $6,400 The decision alternative for the company which has the most favorable total expected value is the development of new product thoroughly. This is because it has the largest expected value of $210,200, in comparison with the other three decision alternatives for the company. The larger the expected value of a decision alternative the better the decision alternative. This is because the derived expected value indicates the level of return that a company will get from a given decision alternative. Exercise 18 The investment contribution by each of the 3 marketers when they formed and established a consultancy was as follows; A invests $30,000 B invests $10,000 C invests $20,000 1. The partnership ratio A: B: C is 3:1:2 2. The business made a profit of $45,000 in the first year. The profit share for each partner is as follows; A - $ 22,500 B - $ 7,500 C - $ 15,000 Exercise 19 Two magazines which are marketed to each of the generational category include; 1. Belle magazine:  It is a design magazine which covers interior design, architecture and the raft of other home improvement content. Targets readers aged between 25-49 years. The Belle magazine brand represents; Excellence and innovation in interior design and decoration It is published eight times a year Takes a lively, informed and contemporary view on design, showcasing beautiful homes in Australia and overseas Provides news related to trends and of creative personalities in interior design, architecture, furniture, art, gardens, luxury goods, fabrics and home accessories. 2. Girlfriend magazine: it is an Australian teen girl magazine targeting readers aged between 12-17 years old. It has a mix of fashion, entertainment, beauty and lifestyle articles. The magazine is sold for $5.60, at most supermarkets and newsagents It is sold monthly hence affordable on a teenage wage Has a dominant picture on the cover usually of a young, popular and cheerful looking female celebrity, clothed in the latest styles reflecting the current season. The magazine uses words and symbols such as TXT and 'XOXO' which the youths usually use Exercise 20 The target group for biz Girl is mainly female consumers with a keen interest on business matters. This includes female employees who are passionate with their careers and their subsequent career development. In Victoria, Australia the population trend indicates that the population of both males and females residing in the state has generally increased. By the end of 2008, Australian Bureau of Statistics estimated a female population of 2,715,200 in Victoria. Subsequently, as at June 2010, the estimated female population in Victoria had increased to 2,796,000. This represents a 2.98% estimated population growth of females residing in Victoria within the 18-month period. With the increase in population and the number of females interested in business, the demand for the Biz Girl product is expected to increase. To cater for the growing demand, Biz Girl should increase its inventory production. In addition, it should also expand its distribution sources and make it available on the internet were consumers can purchase the product. This is mainly because of the increased usage and internet accessibility. The population estimate in Victoria as at September, 2013 was 5,768,600 which indicate a significant increase from the population estimate of 5,547,500 established in June 2010. Therefore, in 2013-2014 Biz Girl should increase its production units to cater for the predicted increase in demand. Exercise 21 The inflation rate basically indicates the change in the general levels of prices in a country over a given period of time. Typically, a country with consistently lower rate of inflation exhibits rising currency value as well as increased turnover rate in the stock market. This is mainly because low inflation rates tend to increase the purchasing power of consumers. On the other hand, high inflation rates tend to decrease the volume of investment portfolios traded in the stock market. The following graph illustrates and compares the inflation rate in Australia and United States of America. Data source: Australian Bureau of Statistics and the US Bureau of Statistics In the year 2008 to 2009, most of the countries experienced reduced economic growth as a result of the economic recession, which adversely affected most of the European countries. Australia and the U.S were also affected by this economic recession during which the two countries recorded reduced economic growth characterized by increased inflation rates. However, as indicated in the graph above, in 2008 the inflation rate was higher in Australia than in the U.S. The global financial crisis which heightened in 2011 also led to the increase of the inflation rate in Australia and the U.S. in 2011 as indicated in the graph above. Reference List Australian Bureau of Statistics, 2014, Australian Year Books [Data file]. Retrieved from http://www.abs.gov.au/AUSSTATS/ Read More