Analyze The Method By Which A Firm Can Allocate The Given

Advertising Budget Between Different Media Of Advertisement.

Answer:

In forecasting the demand for a new product, the firm will need to make a market
survey of customer need analysis of sales records of potentially competing products
or analysis of the life cycle of existing products which may be substitutes. The sales
records of a comparable product may be used as the basis for making an estimate or
a prediction of sales of a new product. The life-cycle approach is based on the theory
that each product goes through a predictable growth pattern following its initial
introduction. Application of this method assumes that a- product experiences an
introductory phase, further development, growth, maturity, stabilization in
acceptance and then decline. The key to using this method is to find a growth
pattern in some established product which services the same market so as to use its
record as a guide.

In the case of an established product, changes in some key -variables such as

customer's income or the level of economic activity may provide the required clues.
Here forecasting becomes a matter of predicting possible elasticities or
responsiveness to key variable changes. The market survey method of predicting new
product demand requires that questioner of ires be sent to potential customers
selected by a random or stratified sampling method.