When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at….
Strategic Marketing: Review Questions
Part 1: Review Questions
Forecasts have powerful influence on what companies do, through budgets and other planning procedures. Thus, forecasting merits significant management attention and commitment. Provide an example of a budget or sales forecast for a major airline and outline the components of this budget or forecast.
Superior market knowledge is not only an important source of competitive advantage, but it also results in happier, higher volume of, and more loyal customers. Do you agree or disagree with this statement? Why or why not? Defend your answer.
Much can go wrong in marketing research and often does. Becoming an informed and critical user of marketing research is an essential skill for anyone who seeks to contribute to strategic decision making. Do you agree or disagree with this statement? Why or why not? Defend your answer.
Why do market segmentation and target marketing make sense? Provide an example for the airlines industry.
Part 2: Sales Forecasting in the Airlines Industry
As a marketing manager for a major airline, you are faced with strategic planning decisions of growing sales and increasing market share in the leisure travel market. Your boss walks into your office and requests an analysis of past sales in the leisure travel market using regression analysis (Tip: Review video Forecasting in Excel Using Simple Linear Regression in Activity 4.2). Using the Excel data file linked below, create a regression analysis with a graph that you can present to your boss for a meeting next week. Include a summary of your findings that:
Determine if sales are increasing, decreasing, or staying constant based upon the regression forecast.
Explain the deviations in sales demand.
Provide your boss with a suggested strategic directive based upon your findings.