MARKET STUDY

QUESTIONS AND PROBLEMS CHAPTER 4:

1. ANALYZE THE CONCEPT OF MARKET IN A PROJECT AND EXPLAIN IT

INTERRELATIONS BETWEEN ITS COMPONENTS.

Elproyecto puede adoptar cuatro modalidades diferentes de mercado; competencia perfecta,

monopoly, monopolistic competition, and oligopoly. Perfect competition is the model of
market in which competitors interact more with each other, given their characteristics in which
Economic agents must be perfectly informed about the market in which they operate.
unroll and paraphrase this must necessarily exchange information with its
competition.

2. DESCRIBE THE SCOPE OF THE COMPETITOR MARKET STUDY.

Conducting a market study means gathering information about the agents that will influence in some way.
way in the decision-making process in our commercial activity, and undoubtedly one of them is the
competitor market; those who are stubbornly focused on the placement of an identical or similar product
in the market. In this study, it is necessary to identify the different strategies that they
they develop, and thus be in a better position to face them.

3. EXPLAIN THE OBJECTIVES OF MARKET RESEARCH AND HOW IT SHOULD BE

ADDRESSING. EXAMPLES OF THE IMPACT ON THE COMPOSITION OF THE FLOW
FROM THE PROJECT BOX.

The main objective for conducting market research is the collection of information.
in order to project the future investments to be made in the project, the promotions,
advertising, among others.
The main incomes of a flow are reflected in the sales of the business in which it is developed.
company. Consequently, if the market study detects needs in the population that
The company can cover it and it will be well received in the market, so they will dedicate themselves to it.
with security to those who find it convenient.
For example:
- Being summer in the city there are no recreational spaces where children can go.
then it will be a good opportunity for the company that is dedicated to doing this and once
installed will have a very good influx of the public.
- Being in a new neighborhood, there are no supermarkets or any stocked minimarkets, this will be a
a good alternative for a businessman engaged in this sector to invest, as their sales
they will be high due to the lack of alternatives for the population.
 4. DESCRIBE AND ANALYZE THE STAGES OF A PROJECT STUDY.

It is a cyclical process, in which ideas float, that can be systematically addressed under a
management modality of benefits, that is, a permanent search for new ideas.
find: the idea, pre-investment, investment and operation. Within the pre-investment are found:
Profile: it is done in basel existing information, this study more than calculating the profitability of
The project seeks to determine if there is any reason that justifies the abandonment of an idea before.
allocate resources for profitability.
Perfection: estimate probable investments, operating costs, and revenues that
will demand and generate the project, is mainly characterized by highlighting solutions with
major elements of judgments.
Feasibility: it is prepared based on the precise background obtained mainly through
primary source of information, it is the final step of the pre-investment stage.

5. WHAT VARIABLES SHOULD BE CONSIDERED, IN YOUR OPINION, WHEN STUDYING THE MARKET
HOUSING CONSUMER?

The market study consists of six factors that are very important in the market of
consumidor: elproducto, oferta delproducto, demanda delproducto, mercado potencialdel
producto, canales de comercialización, precio delproducto.

6. EXPLAIN THE SCOPE OF THE PRODUCT IN THE MARKET STUDY.

When studying the study of a project, it is necessary to recognize the agents, with their performance in the
what will have some degree of influence on the decisions that will be made when defining their strategy
commercial. They are the five sub-markets. The market study is composed of blocks,
seeking to identify and quantify the participants and the factors that influence them
behavior. As the provider, competitor, distributor, consumer, and external.
Provider: it is complex, as all alternatives for obtaining must be studied.
raw materials, as well as their costs, purchasing conditions, substitutes, durability, necessity
of special infrastructure and others.
Competitor: it is necessary to know the direct competitors, the commercial strategies that
they develop to better confront the consumer market.
Distribuidor: es de menor variabilidad,garanticela entrega oportuna delos productos al
consumer.
Consumer: requires time for their study, the complexity of the consumer makes them become
several specific studies on him are essential, as they will allow for the definition of various effects
about the composition of the project.
External. It involves resorting to external sources.

7. EXPLAIN THE CONCEPT OF THE PRODUCT LIFE CYCLE AND GIVE EXAMPLES OF IT.
PRODUCTS WHOSE CYCLE IS NOTICEABLY DIFFERENT.
The conditions under which a product is going to be traded and that are changing over time.
time, that is, they are the conditions through which the product will go along its
existence. Therefore, it develops in the following way:
- Development Stage.
- Introduction Stage.
- Growth Stage.
- Maturity Stage.
- Decline Stage.

EXAMPLES:
1.- Appliance Company.
2.-Dairy Products Company.
CocaColaEmbonor.

8. IF THE COST (CU) OF A PRODUCT IS $100, WHAT WOULD BE THE SELLING PRICE IF THE
IS THE CRITERION TO CALCULATE A MARGIN OF 25% ON THE COSTS? TO WHAT AMOUNT?
IS THIS MARGIN EQUIVALENT IF YOU WANT TO EXPRESS IT IN TERMS OF PRICE?
 9. IF THE DEMAND FUNCTION FOR A PRODUCT IS Q=1200 -80P AND THE FUNCTION OF
COSTS ARE C=10Q+10000, WHAT IS THE PRICE THAT MAXIMIZES PROFITS?

10. IDENTIFY THE MAIN INCOME AND EXPENSE VARIABLES DERIVED FROM IT
STUDY OF DISTRIBUTION CHANNELS?

The main variables that derive from distribution channels, whether for manufacturing and
consumer, which are focused on the income primarily are the sales that are made and the
profit obtained from prices and other extra charges. On the other hand,
Part regarding expenses refers to the costs that the company will incur for its
sales and arrangements that must be made to ensure everything goes perfectly.

11. EXPLAIN THE MAIN LIMITATIONS THAT THE PROJECT PREPARER HAS FOR
DETERMINE THE MOST SUITABLE ALTERNATIVE FOR PROMOTION AND ADVERTISING AND THE
EFFECTS OF BOTH ON THE BOX FLOW COMPOSITION?

The main limitations are the income and expenses, since they have effects on
the cash flow of promotion and advertising requires money, which implies that there are
Expenses as well as income in a cash flow.

12. I DO NOT NEED TO HIRE THE MARKET STUDY TO EVALUATE

CORRECTLY MY PROJECT OF MANUFACTURING ALUMINUM PACKAGING FOR
FOOD CONSERVES, WHICH I WILL USE ALL THE PRODUCTION FOR MYSELF
CANNING [Link]

The world evolves over time and after a while we see new advancements,
innovations, so you can't just stick with a single packaging prototype, therefore it is
it is necessary to assess this evolution.
 In studies at the profile level, it is possible to resort to subjective methods.
DEMAND PROJECTION, BUT WHILE MORE FINISHED IS THE REQUIRED LEVEL,
SHOULD OPT FOR STATISTICAL-MATHEMATICAL METHODS TO MAKE THE
[Link]

Given the permanent evolution of the market, the current study may have changes when the
The project has already been implemented, at the profile level the choice is made to use quantitative information.
future event.

14. ALTHOUGH THERE ARE SEVERAL ASPECTS TO INVESTIGATE IN THE MARKET STUDY OF A
PROJECT, THE FACTOR THAT SHOULD BE STUDIED IN GREATER DEPTH IS DEMAND
[Link]

Projections must be made regarding future demands of a requirement, taking into account
Based on real situations, to prevent and improve our future project.

15. INDICATE THE MAIN VARIABLES YOU WOULD CONSIDER TO STUDY THE
MARKET OF A POTATO FLOUR PROJECT TO PARTIALLY REPLACE; IN PART, THE
WHEAT FLOUR IN BREAD MAKING.

The main variables are:

- The demand that potato flour would have versus wheat flour since it is more common.
to obtain but at a higher price. Also within this point, they must be observed.
consumers and the potential consumers that this new product would have and if it satisfies a
need that are not met.

- The offer should be seen in the quantity of potato flour and flour producers.
trends to be able to have an estimation of the competition that would arise with this new
producto en elmercado y sientraría como un sustituto dela harina de trigo.

- Analyze the prices: we should consider the price of wheat flour to start.
in the market with a price lower than wheat flour in order to mark a margin and for
the agent tends to shop for the need to pay less, for the period in which
The economy is going through. This is what price analysis is for, to see at what price sellers...
they are willing to sell and the consumers to buy so that a point is produced
balance.

- Marketing analysis: this analysis will help us to know when to place

the product to the market and for consumers to achieve satisfaction from it
Product purchased. Therefore, it helps us know when to place the flour in the market.
dad, and may this be purchased and well accepted by consumers.

These points that were mentioned will help us determine if potato flour will be a viable business.
within the flour market.
 16. THE MARKET STUDY OF A PROJECT CANNOT BE CARRIED OUT THAT
INVESTIGATE AT PREFEASIBILITY LEVEL IF THE PLACE WHERE IT IS SUPPOSED TO BE CANNOT BE
THERE IS DEMAND FOR THE PRODUCT THAT WOULD BE MANUFACTURED. PLEASE COMMENT

At the initial study level, the so-called profile is developed based on the information.
existing for projections of what will happen in the future if the project is not implemented, it is
Calculate the profitability of the study project as well as the pre-feasibility and feasibility. There is a
high degree of uncertainty in the pre-feasibility stage. To have a greater level of
certainty in the project will lead us to more time, higher costs; therefore, the study is
feasible.

17. IT IS NOT COMMERCIALLY VISIBLE A PROJECT THAT FACES A MARKET

DOMINATED BY A PRODUCER WHO OFFERS A LOWER PRICE THAN HE CAN
OFFER YOURSELF WITH THE PROJECT. COMMENT

In this case, price is what dominates in this market segment; demand is related.
with low prices.
It is not possible to enter this market anticipating a high price either for quality or for other reasons.
reasons.

18. IS IT POSSIBLE THAT A PROJECT CAN JUSTIFIABLY STATE THAT ITS

PRODUCT, WITH INFERIOR QUALITIES TO THOSE OF THE COMPETITION, HAVE MORE
DEMAND?

Yes, since a market study can demonstrate that being of lower quality but
Maintaining a lower price has higher demand because it substitutes a need of people.
which do not have the income to acquire a higher quality one and therefore has greater
acceptance of the lower quality product.
This lower-priced product addresses a need that people cannot overlook or
Set aside and for this it has greater acceptance varying the person and the income they have.

19. IF THE DEMAND FOR THE PRODUCT THAT THE PROJECT WILL DEVELOP IS
GUARANTEED, THEN THERE IS NO PROBLEM OF HAVING TO RESEARCH THE
COMPETITOR [Link].

The product is sold by the brand, no longer by low or high prices or quality. In this case, the brand itself.
brand is sold for six soles.
Example:
TheCocaCola

20. EXEMPLIFY THE CLASSIFICATIONS OF DEMANDS FROM THE POINTS OF VIEW

OF YOUR SUPPORT, NEED, TEMPORALITY, DESTINATION, AND PERMANENCE.

Opportunity: this will depend on whether the product being brought to market is new or already existing.
It has previous competition and this is already recognized by consumers. For example, in the case of
delas compañías de celulares altener solo dosgrandes compañías estasfijaban tarifas altas o
similar. But in the future, two more will be created, and therefore there will be competition and more.
acceptance among consumers as it is a necessity.
- Need: it will depend on the consumer as they will acquire the products and each time
As new products are acquired, new needs are arising for them.
[Link] example: in a establishment there wasn't so much technology before, but with the
The implementation of acquiring new technologies led to the emergence of other needs, such as
to be implemented by a laboratory to have computers.
- Timing: it will depend on the stock and when the products are produced to release them.
in the market. For example: the seasonal fruits that are only available at a certain time and therefore will
to have greater demand from consumers.
- Permanence: it will depend on the stock that the producers will offer to the markets.
Example: for Holy Week, producers deliver a larger stock in the markets because they are
most sought after by consumers.

CASE: SMALL SUPERMARKET

Investments to strengthen the image and conditioning of the premises in another function of it
observed in the study of potential clients, such as credit policies.
Analyze current and potential consumers, identify their preferences, consumption habits,
motivations this through market research.
Demand will be associated with price levels, conditions of others, etc. The strategy is necessary.
that we follow the competition by taking advantage of their advantages and avoiding their disadvantages, such as
It is possible to capture markets through information and for calculating costs.
probables.
Analysis of the commercialization of the project in the decision-making rate, one of them is the policy of
venta, precio, canales de distribución, marca estrategia publicitaria,inversiones en creaciones de
imagen, calidad delproducto, servicios complementarios, estilo de venta, características exijidas,
Sales force recruitment (it is necessary to enter this market segment). Study
the market, having all the necessary information either through primary or secondary sources
the market it wants to penetrate.
 Market Projection Techniques

QUESTIONS AND PROBLEMS CHAPTER 5:

1. ANALYZE THE MOST DETERMINING VARIABLES, IN YOUR OPINION, TO SELECT ONE

PROJECTION TECHNIQUE.

La validezyla disponibilidad delos datos históricos,la precisión deseada delpronóstico,elcosto

of the procedure, the benefits of the result, the future periods that one wishes to forecast and the
available time to conduct the study. The major difficulty of predicting behaviors
it lies in the possibility of events that have not occurred before, as in the development of
new technologies, the incorporation of competitors with non-traditional commercial systems,
variations in government economic policies, etc.

2. EXPLAIN WHAT THE GRADE OF VALIDITY OF A PROJECTION RESULTS DEPENDS ON.

The validity of the projection results is closely related to the quality of the
input data that serves as the basis for the forecast. The sources of information most used
frequent are the official historical series of public and private organizations, the opinions of
experts and the results of special surveys among others. The quality of the results of a
Demand projection depends on the resources and data used, the selected method.
The projection must be adequate. To select a projection technique, there are two...
ways to classify forecasting techniques.
Quantitative techniques: Forecasts are built on the basis of data. Within this category are
they include causal models and time series models.
Qualitative techniques: forecasts are built based on qualitative data.

3. EXPLAIN THE CONCEPTS OF PRECISION, SENSITIVITY, AND OBJECTIVITY OF THE METHOD

FORECAST.

Precision that the project market can have a behavior similar to others
markets.
Sensitivity when the market projection will be made using the result of direct estimation.
personally correcting it based on background gathered from a variable of relevant sources related to
behavior of the economy.
Objectivity availability of internal personnel with experience and knowledge regarding
possible reactions and behaviors to expect in the future.

4. EXPLAIN THE MAIN CHARACTERISTICS AND DIFFERENCES OF THE METHODS

QUALITATIVE, CAUSAL, AND TIME SERIES.

Time Series Models:

They are based on historical data and focus completely on data patterns and changes.
of such patterns.

ModelosCausales:
These methods aim to project the market from historical background within them.
the most used are regression models, econometric models, and shopping surveys.
Regression: mathematically projects the behavior of an independent variable in
generalson complejoslo que no siemprelos hace confiables.
 DETERMINATION OF SIZE

QUESTIONS AND PROBLEMS CHAPTER 8:

The proposed size should only be accepted if the demand is clearly

SUPERIOR ADDITION SIZE. COMMENT

No, since the determination of size has to respond to an interrelated analysis of a large...
cantidaddevariablesdeunproyecto:demanda,disponibilidaddeinsumos,localizaciónyplanestratégico
commercial, future development of the company that will be created with the project, among others.

2. IDENTIFY THE MAIN FACTORS THAT DETERMINE THE SIZE OF A PROJECT.

Basic situations of the size that can identify regarding the market: that one in which
the total demand quantity is clearly less than the minimum of the possible producing units to install,
the one in which the demanded quantity is equal to the minimum capacity that can be installed, since the one in the
if the demanded quantity is greater than the highest possible production units
uninstall.

3. WHAT IS THE MAIN DECISION FACTOR IN THE STUDY OF A SIZE OF A

PLANT TO MANUFACTURE THE SUPPLIES THAT A COMPANY USES AND TODAY BUYS IN
FUNCTIONING?

The availability of supplies, as they may not be available in the desired quality and quantity.

4. WHY THE COMMERCIAL STRATEGY THAT IS DEFINED FOR THE PROJECT CAN BE MORE
IMPORTANT THAT THE AMOUNT DEMANDED WHEN DEFINING THE MOST APPROPRIATE SIZE FOR
A PROJECT?

Due to the information provided regarding market concentration to achieve maximum

project profitability.

5. IDENTIFY A CASE WHERE SIZE CLEARLY GENERATES ECONOMIES OF SCALE AND ANOTHER
DISECONOMIES OF SCALE.

A company that clearly meets the demand for products can cover both the demand for
national levels as a foreigner generate economies of scale, producing products at
optimal level at low cost (The oil industry, the chemical industry, manufacturing of
computers, cell phones), on the other hand, the diseconomies of scale are the factors
what causes large companies to produce goods and services with an increase in cost
Per unit of each product, they have been studied much less than the opposing forces.
known as economies of scale, the elements that allow companies to produce goods and
services with increasingly lower unit costs.
6. EXPLAIN THE CONCEPT OF SCALE FACTOR. WHAT DOES IT MEAN WHEN IT IS GREATER?
EQUAL, LESS THAN ONE.

Equal to one, there are no economies of scale. If greater than one, there are diseconomies of scale.

6. IN WHAT CASES DO ECONOMIES OF SCALE, EVEN IF THEY EXIST, NOT PLAY A ROLE?
NO ROLE IN THE DECISION.

In those cases where the factors of availability of supplies and distribution costs have a
preponderant weight.

8. EXPLAIN THE RELATIONSHIPS THAT EXIST BETWEEN THE MARGINAL INTERNAL RATE OF RETURN AND THE
INCREMENTAL NET PRESENT VALUE AND THE MAXIMUM NET PRESENT VALUE, AT THE POINT WHERE THE
SIZE BECOMES OPTIMAL.

Through the analysis of cash flows of each size, an internal rate can be defined
marginal return of the size that corresponds to the discount rate that nullifies the cash flow
the difference in the sizes of the alternative, while the marginal rate is higher than the cutoff rate
defined for the project, it will be advisable to increase the size. The optimal level
It will be given by the point at which the rates equal each other.

9. BY INCREASING PRODUCTION AND SALES, ONE CAN MOVE FROM A SITUATION WITH
POSITIVE YIELD TO ANOTHER NEGATIVE.

Yes, since size is associated with economies of scale effects, which have an impact on costs.
operation and sales levels, which are directly related to profitability
project

10. WHAT DIFFERENCE DOES IT MAKE TO THE ANALYSES THAT MUST BE DONE TO STUDY OPTIMAL SIZES
GROWING MARKET AND CONSTANT MARKET.

In general, being in the presence of a growing market, this variable takes on more importance.
that one should choose to define an initial size large enough so that it can be
respond to that market growth in the future, or another smaller one that could arise
expanding according to the possibilities of production scales.

11. IN THE CALCULATION OF THE AVERAGE COST, ALL FIXED COSTS OF MUST BE CONSIDERED
PRODUCT, INCLUDING DEPRECIATION. COMMENT.

Fixed costs are all those that are constant and are considered in the total cost of the
product, the depreciation of the equipment must be included as it is necessary to renew or change it
machinery, for this reason it is included in the costs.
 12. IN THE MANUFACTURE OF A PRODUCT, IT IS KNOWN THAT THE INVESTMENT REQUIRED FOR A PLANT
WITH A CAPACITY TO MANUFACTURE 1,000 UNITS DAILY IS $250,000,000. IF THE FACTOR OF
SCALE ES0.8. WHAT IS THE COST OF BUILDING A PLANT OF 2,000 AND 3,000 UNITS
DAILY?

For: 2,000 Units.

It=250,000,000(2,000/1,000)*0.8=400,000,000.

For: 3,000 Units.

It=250,000,000(3,000/1,000)*0.8=600,000,000

13. REPORT ON THE COST OF CONSTRUCTION AND EQUIPMENT OF A SMALL

INDUSTRIAL PLANT INDICATES THAT THE INVESTMENT NEEDED TO BE ABLE TO MANUFACTURE 13,000
ANNUAL UNITS OF A PRODUCT ARE $68,000,000 WHILE FOR
MANUFACTURE 30,000 UNITS FROM $120,000,000. DETERMINE THE SCALE FACTOR.
 LOCATION DECISIONS
QUESTIONS AND ANSWERS CHAPTER 9:

IN WHAT CASE WOULD YOU RECOMMEND USING THE METHOD OF INDUSTRIAL BACKGROUND FOR
DETERMINE THE LOCATION OF A PROJECT?

The method of industrial antecedents suggests that if an area installs a plant of a...
similar industry, this will be suitable for the project. "if the place was the best for companies
similar in the past, it must also be the best for us now. The limitations of this
The methods are obvious, since they perform a static analysis when one is required.
dynamic to take advantage of the opportunities is optional among the possible locations to choose from.

2. HOW WOULD YOU EXPLAIN THAT LOCATIONAL FACTORS OF A MACROZONE CEASE TO BE

RELEVANT FACTORS TO DECIDE THE MICROLLOCATION OF THE PROJECT?

Factors such as tax policies, climatic influences, and others that have
preponderance in the selection of macrolocation is not relevant for choosing one
microzone within that, since its effect would be common to all of it.

3. THE LOCATIONAL PROBLEM DOES NOT EXIST WHEN WHO COMMISSIONS THE STUDY OF THE PROJECT
PROVIDES THE PHYSICAL INFRASTRUCTURE FOR ITS IMPLEMENTATION.

The selection of the location should consider its definitive or temporary nature and choose for
that allows for maximum performance of the project. The localization can have a
conditioning effect on the technology used in the project, both by the restrictions
physical aspects such as the variability of operating costs, capital of the different alternatives
technological associated with each possible location.
 7. IN THE STUDY OF THREE OPTIONAL LOCATIONS FOR A PROJECT, THERE IS
THE FOLLOWING INFORMATION:

In addition, it is estimated that there are 3 critical factors of difficult quantification that must be taken into account.
consideration: the climate, water availability, and the availability of services (communications,
energy, etc).

When comparing the 3 factors, it is considered that water availability is the most relevant, followed by
for the availability of services and further back due to the weather. To analyze these 3 factors in each
localization concludes the following:

a) The availability of water is more critical in Aque than in ByC. Between these last two locations.
this factor is considered of equal importance.
b) The availability of services is more relevant in the location of B than in A, although it is
similar between C.
c) The climate is more determinant for C than for A or B; however, for B it is more important than...
paraA.
Objective factors have a relative importance of 4 times that of subjective factors.
What location do you recommend and why?
CASE: CHEESE PRODUCER

There are 5 possible locations for a cheese plant, considering that the greatest influence...
the total cost of the project consists of the price of milk and, mainly, the cost for the
transport of raw material. The following table shows the price of milk and the
available production

The plant requires a daily supply of 7000 liters. The following table shows the distances.
among the possible locations and their supply sources, expressed in
Kilometers:

Which location would you choose? If the freight cost is $5 per liter/km. The milk loss per load and
The download amounts to 2% of the transported volume, which the plant must absorb.
SOLUTION: