Premium Essay

Spending Potential Index

In:

Submitted By ryguytheman
Words 442
Pages 2
Ryan Murphy
MKT 410
2/1/12
Assignment #1
1. The Spending Potential Index is used to analyze household spending on any particular product or service type. The Spending Potential Index (SPI) can be calculated by dividing the local average expenditure of a certain product by the United States average expenditure on that same product. The equation looks like this:
SPI = [Local Average Expenditure ÷ U.S. Average Expenditure] x 100
The average value of the SPI is 100, though it is not abnormal for an SPI of a particular product to be somewhat higher or lower than the average. By inserting relevant data, one can see whether or not their local economy spends more or less than the national average on a certain product or service. A score below 100 indicates that there is less spending than average, while a score above 100 indicates spending higher than the national average.

2. The Spending Potential Index can be a valuable asset to marketing managers in the sense that it indicates the products and services that the people of a certain geographical region desire the most. For example, a marketing manager for a retirement plan company could use the SPI to find an area to find potential customers. Boulder has an SPI of 150 in this specific industry, which is considered to be extremely high. If there is an opportunity for this marketing manager to expand into Boulder, he/she would likely be able to find many clients, as the Boulder population clearly has a tendency to spend more on retirement plans. The city of Fairplay, on the other hand, has an SPI of 91 for the retirement plan industry. Fairplay might not be an ideal location to begin business, as the population spends less on retirement planning than the national average.

3. One apparent difference between Fort Collins and Boulder is their population size. Fort Collins is a larger city, spread out over

Similar Documents

Free Essay

S&P 500 Analysis

...waiting for? Sell it right now. S&P 500 (^SPX) - is the stock market index in the United States based on the market capitalizations of the top 500 companies. It rose to 1924.28. The index rose 2.1% in May, its monthly advance since February 2014. Since the various indictors of US equities market short term risk are flashing, and market correction imminent, so it is recommended to sell the stocks and lock the profit now. Technical Analysis Chart 1.0 source: StockCharts.com The above chart shows that S&P500 has upside since last year, its index price is above 10 days Simple Moving Average – SMA(10) most of the time, and never been under or touched the 200 days SMA, recent index price close at 1924.28 which is above SMA(10) far away 1796.98 SMA(200). That is a clear buy signal in both short-term and long-term. It is obvious to spot the upward trend -a buy signal will be developed when the MACD line just crossed above the signal line, the green upward arrows are used to illustrate this phenomenon. While the red downward arrows are used to demonstrate the development of the sell signal, when the MACD line crossed the signal line from below, confirmed by crossing the zero line as well, a downtrend would be formed. The green circle highlighted our recent closing of the MACD is above the signal line, indicating an uptrend at the moment. Momentum is measured by Relative Strength Index (RSI), the light blue arrows indicated when sell order were weakening...

Words: 903 - Pages: 4

Premium Essay

Key Risk Analysis Paper

...This data for the “Consumer Spending Trends” KRI can be used to observe the potential risk in the event of inflation of prices for goods and services that can rise and, consequently, cause the purchasing power of the currency to fall and the cost increases that are experienced by Fresh Market will then be passed on to its customers. This increase in product to the customer may decrease consumer spending at Fresh Market. Furthermore, this risk includes the possibility that Fresh Market competitors may be attracting their...

Words: 864 - Pages: 4

Premium Essay

Pirece

...Deflation is: low prices. a slowing of the inflation rate. a sustained decrease in the general level of prices. none of the above. IncorrectQuestion 2 0 / 1 pts An economy experiences inflation when: prices are high. prices are increasing. the purchasing power of money is high. the purchasing power of money is increasing. Question 3 1 / 1 pts A country where there are extremely rapid increases in the general level of prices is experiencing: stagflation. hyperinflation. / political inflation. structural inflation. IncorrectQuestion 4 0 / 1 pts Disinflation is a: decrease in real income. decrease in the rate of inflation. sustained decrease in the general level of prices. sustained decrease in an economy's level of output. IncorrectQuestion 5 0 / 1 pts A person who quits a job in Los Angeles to look for work in Chicago is: not unemployed. cyclically unemployed. frictionally unemployed. structurally unemployed. Question 6 1 / 1 pts When prices increase, real income: increases. decreases. / is unaffected. becomes a poor measure of purchasing power. Question 7 1 / 1 pts Which of the following types of unemployment is voluntary, where the person chooses to leave their job? Cyclical unemployment. Frictional unemployment. / Structural unemployment. None of the above. Question 8 1 / 1 pts The real rate of interest is: the nominal rate of interest plus the...

Words: 1823 - Pages: 8

Free Essay

Consumer Confidence Report 2012

...QUARTER 2, 2012 CONSUMER CONFIDENCE, CONCERNS AND SPENDING INTENTIONS AROUND THE WORLD 91 Global consumer confidence index declined three points to 91 • Discretionary spending and saving decreased globally across all sectors • More than two-thirds (67%) of respondents changed spending habits to save on expenses • Concern for the economy and job security remained Global consumer confidence declined three index points to 91 in Q2 2012 amid a worsening Euro zone crisis, lackluster U.S. job growth and China’s downward GDP revision for 2012, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. “Consumers are clearly proceeding with caution in relation to their spending intentions,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “Consumer confidence lost momentum in the second quarter as global events, including a worsening Euro zone crisis coupled with slowing growth rates in China and India, impacted financial markets and consumer sentiment in many parts of the world. As renewed volatility entered global markets, consumers reacted by reining in spending and consumption intentions.” In the latest round of the survey, conducted between May 4 and May 21, 2012, consumer confidence declined three points to 100 in Asia Pacific, four points to 88 in North America, and two points to 96 in Latin America. An increase of one point each in Middle...

Words: 4047 - Pages: 17

Premium Essay

Budget Outlook

...CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE CBO The Budget and Economic Outlook: Fiscal Years 2013 to 2023 Percentage of GDP 120 100 80 60 40 20 0 1940 1945 Actual Projected 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Federal Debt Held by the Public Trillions of 2005 dollars 20 18 16 14 12 10 0 2000 2004 2008 Potential GDP GDP Actual Projected Percent 12 10 8 6 4 2 0 2000 Actual Projected 2012 2016 2020 2024 2004 2008 2012 2016 2020 2024 GDP and Potential GDP Unemployment Rate FEBRUARY 2013 Notes Numbers in the text and tables may not add up to totals because of rounding. Unless otherwise indicated, years referred to in describing the budget outlook are federal fiscal years (which run from October 1 to September 30) and years referred to in describing the economic outlook are calendar years. The figures in Chapter 2 have white vertical bars that indicate the duration of recessions. (A recession extends from the peak of a business cycle to its trough.) The economic forecast was completed in mid-January 2013, and the estimates of 2012 values shown in tables and figures in Chapter 2 and Appendix B are based on information available at that time. Supplemental data for this analysis and the historical budget data that are usually included in this report are available on CBO’s Web site (www.cbo.gov). CBO Pub. No. 4649 Contents Summary...

Words: 44343 - Pages: 178

Premium Essay

Aqa Macroeconomics Key Terms

...output is what the economy is capable of producing when working at full capacity. Actual output differs from the trend level of output when there are output gaps. | Aggregate demand (AD) | The total planned spending on real output produced within the economy. | Aggregate supply (AS) | The level of real national output that producers are prepared to supply at different average price levels. | Availability of credit | Funds available for households and firms to borrow. | Balance of payments (BOP) | A record of all the currency flows into and out of a country in a particular time period. | Balance of trade | The difference between the money value of a country’s imports and its exports. Balance of trade is the largest component of a country’s balance of payments on current account. | Balance of trade in goods | The part of the current account measuring payments for exports and imports of goods. The difference between the total value of exports and the total value of imports of goods is sometimes called the ‘balance of visible trade.’ | Balance of trade in services | Is part of the current account and is the difference between the payments for the exports of services and the payments for the imports of services. | Balanced budget | Achieved when government spending equals government revenue. | Bank of England | The central bank in the UK economy which is in charge of monetary policy. | Bank rate | The rate of interest the Bank of England pays to commercial banks on...

Words: 3330 - Pages: 14

Premium Essay

Macroeconomics Diagrams and References

...Expenditure on Goods and Services (E) Real Flow Good and Services = Output (O) Factors of Production Wages, Rent and Profits (Y) E=O=Y Firms 4 Four Sector Circular Flow of Income Leakages (L) Saving (S) Imports (M) Taxes (T) O=E=Y Sum J = Sum L Income Injections (J) Households Investments (I) Exports (X) Expenditure Government Spending (G) Firms 5 Measuring National Income Output Method Income Method Households Good and Services Factors of Production Expenditure on Goods and Services Wages, Rent and Profits Expenditure Method Firms 6 How is national income measured? Employment income + Rental income + Profits + Interest = National Income How is national output measured? Value of goods and services = National Output How is national expenditure measured? Household consumption (C) + Firms’ investment (I) + Government spending (G) + Exports - Imports (X-M) = National Expenditure What is GDP? National Expenditure = National Income = National Output = Gross Domestic Product GDP • GDP = Gross Domestic Product = Total Value of all Spending in an Economy = The Total Value of all final Goods and Services in an Economy regardless of who owns the productive assets. • GDP = C + I + G + (X – M) GNP • GNP = Gross National Product = Total Income Earned by a nation’s factors of production regardless of where the assets are located Real GDP Real GDP = Nominal GDP adjusted for inflation ...

Words: 3103 - Pages: 13

Premium Essay

Eco 561 Week 4 Quiz

...ECO 561 WEEK 4 QUIZ ECO 561 Week 4 Quiz 1. Business cycles occur when output Hint: Business cycles fluctuate over time around the linear trend of gross domestic product (GDP). A. falls below its potential B. rises above its potential C. is fixed at its potential [ D. fluctuates around its growth trend ] The business cycle includes the tendency for output to rise and fall in the short term. When output fluctuates around an economy's secular trend, business cycles occur. 2. Which of these statements best describes a complete individual business cycle? Hint : A complete business cycle is measured from the initial peak to the next peak. [ A. Movement from peak to trough to peak ] B. Movement from recession to expansion C. Movement from peak to recession to trough D. Movement from trough to expansion then to peak A business cycle is measured peak to peak or trough to trough. 3. During the business cycle, the period between the point at which output reaches a high and the point at which it reaches a low is called Hint : After a period of economic expansion, the economy usually contracts. This contraction would be characterized by higher unemployment and a declining GDP. A. a peak B. a trough C. an expansion [ D. a recession [ A downturn describes the phenomenon of economic activity starting to fall from a peak. If output contracts between the point at which output reaches a high and the point at which it reaches a low for more than two consecutive...

Words: 933 - Pages: 4

Free Essay

Brics: the Vanguard of the Revolution

...Case Study The BRICs: Vanguard of The Revolution The BRICs, composed of Brazil, Russia, India, and China, are the future of the world’s most powerful economies and the current most accelerated emerging economies. Together they are home to nearly 2.8 billion people, about 40 percent of the planet’s population. They currently generate about 30 percent of world’s GDP. They have come a long way from the last 30 years or so, each one overcoming their own barriers and obstacles to achieve where they are today. They are all expecting to increase their income within the next 15-30 years exponentially, allowing for the economy to flourish and incorporate new markets that were otherwise less popular or almost non-existent. For example, cars in India and China were about 2 and 9 out of 100 people, respectively. They estimate that the total number of cars in both countries could rise from 150 million today to north of a billion by 2030. Not everything is positive however, there are skeptics who say there are problems such as the delusion that current trends will continue indefinitely and uninterrupted. That economic growth rates slow as the base of activity expands and advantages such as cheap labor or low-cost capital wane as growing demand increases marginal price pressures. That there’s always a black swan event, an unexpected, hard-to-predict impact that resets the game such as the internet, the collapse of the Soviet Union or the global financial crisis. Despite ever-present...

Words: 1322 - Pages: 6

Free Essay

Italy: Country Profile Euromonitor International 31 August 2012

...Additional cuts in public spending have been made in 2012. Unemployment will rise rapidly during the year, reaching the highest level in more than a decade. Italy currently has the third oldest population in the world and the potential rate of growth could slip further as the population ages. KEY POINTS Italy's economy will slip back into recession in 2012 when real GDP is expected to contract by 1.9%. The economy contracted by 0.7% in the second quarter of 2012. This was the fourth successive quarter of decline. The poor performance can be attributed to several factors including the on-going austerity programme and weaker demand for exports in other European markets. Unemployment was 8.4% in 2011 and it will rise to 10.8% in 2012 – the highest level in12 years. Unemployment would be even higher were it not for the low rate of labour force participation in the South and among women. Youth unemployment has reached 36%. In June 2012, the government introduced several labour reforms. The main thrust of these changes is to ease entry into the labour market for younger workers on apprenticeships, increase taxes to discourage short-term contracts and give room to employers to lay off workers for economic reasons. The budget deficit for 2011 was reduced to 3.9% GDP in 2011 and Rome plans to cut it further to 2.7% in 2012. To meet these targets, Rome rushed through an austerity programme and made various spending cuts. However, it soon became apparent that more spending cuts were necessary...

Words: 3449 - Pages: 14

Premium Essay

Country Feasibility Study

... Page 6 4.2.1 East of Doing Business Page 6 4.2.2 Economic Freedom Page 7 4.2.3 Perceived Corruption Page 7 4.2.4 Tariffs and Trade Agreements Page 7 4.2.5 Competitive Analysis Page 8 4.3 Per Capita Spending Page 9 4.4 Technological and Physical Infrastructure Page 9 4.4.1 Transport Infrastructure Page 10 4.4.2 Physical Infrastructure Page 10 5.0 Social Characteristics and Market Potential Page 11 6.0 Political and Legal Environment Page 11 6.1 Political Risk Page 11 6.2 Legal Risk Page 11 7.0 Trade and Diplomatic Relations with Australia Page 12 8.0 Country of Choice Page 12 9.0 Mode of Entry Page 12 10.0 Conclusion Page 13 References Page 14 Executive Summary This report examines and assesses the market suitability of two countries for the company Octahedron’s SWIM software. This report analyses and compares Singapore and Indonesia’s political, economic and business environments. The report examines and compares key economical, political and business environment factors identified as impacting upon the profitability of the two markets, as well as the current retail jewellery industry and amount of consumer spending on retail jewellery goods, giving an indication...

Words: 4387 - Pages: 18

Free Essay

Va Budget

...the battle, and for his widow, and his orphan” by serving and honoring the men and women who are America’s veterans. Approximately one percent of the American population will serve their country in one of the five branches of military service. Today, the Veterans Administration has one of the most comprehensive health care systems for military veterans than any other country. In 1930, the US government budgeted over $73,000.00 to take care of the country’s veterans. The fiscal budget for the Veteran’s Administration continues to grow every year. There are several reasons the budget changes every year. First, the continuing number of veterans rises every year. Second, the budget needs to account for inflation and the consumer price index. Finally, Congress and the President may approve new programs that will help service members cope with medical or mental issues. This paper will discuss the history of the VA; budget preparation; constant dollars and current dollars, increasing budget in percentages and dollars the past 20 years; five year fiscal plan; and a conclusion. HISTORY OF THE VA BUDGET The United States has been caring for service members since the early 1600’s; the first law passed stated that disabled soldiers would be supported by the colony. During the Revolutionary War in 1776, the Continental Congress prepared a budget that provided a pension for soldiers who were disabled during the war. In the 19th century, the Nation's budget expanded when veteran’s...

Words: 1764 - Pages: 8

Free Essay

Research Tools

...Findings| 1. US Department of Commerce Country Commercial Guides[->0] |Created by US embassies with assistance from several US government agencies. |The reports can give you a better understanding of a countries current commercial environment. Access to information such as market overview, challenges, opportunities, entry strategies, political and economic environment, trade regulations, investment climate, trade events etc Can be useful to determine if a product/business will have potential growth in a given market.|Prepared annually. Reports created by using economic, political and market analysis. Pretty thorough report but some countries do not have a report. For example not all Caribbean countries are featured.| 2. AT Kearney Global Retail Development Report[->1] (also provides other good reports, such as Globalization, and FDI confidence)|Report is created by AT Kearney, a global management consulting firm. Analyzes 25 macroeconomic and retail-specific variables|The Global Retail Development Index ranks the top 30 developing countries for retail expansion. The reports help retailers create global strategies and identify market opportunities. It helps retailers assess current and future markets for possible continued expansion.|Annual report.| 3. World Bank’s Doing Business in…[->2] |The World Bank Group|The doing business reports measure business regulations and their enforcements in 189 economies. These reports provide data on the ease of doing business, rank each location...

Words: 1238 - Pages: 5

Premium Essay

Nhut

...Economic Freedom GB 540 Economics for Global Decision Makers Prof. Timothy Terrell Nhut (Andy) Diep 2010 GB540 Economic Freedom and Variations in Wealth Among Countries. 2 Introduction The Index for Economic Freedom published by the Heritage Foundation and the Wall Street Journal (http://www.heritage.org/Index/) shows a clear correlation between economic freedom and country’s economic wealth. From a long list of countries around the world, viewer should see an almost perfect correlation why countries like Cuba, North Korea, Venezuela, or China is at the bottom of the list. Did the fall of the Soviet Union teach anyone anything? Just imagine if China does not open to economic reform, how it can survive with over 1.3 billion people. In fact, throughout our long history, including the failure of the Soviet Union, there is no doubt the free economies will outshine the less free ones. The Index shows the overwhelming evidence that countries like the United States, Japan, Canada, or England that have the most economic freedom have better standards of living, while socialist or communist countries have the least economic freedom tend to have the lowest. In fact, country like the United States generated unparalleled ability to produce wealth, raise the general standard of living, and provide goods and services in a society. Careful study of the long list of countries, and analyze each government system, viewer should see a trend that when too much government intrusion hinders...

Words: 2055 - Pages: 9

Premium Essay

Macro Essay (Priyesh. 448851)

...“prospects for a more expansionary fiscal policy” (COSATU Secretariat Report to the Ninth National Congress, Sept 2006) and arguing that “[fiscal policy] is unduly focused on chasing macro-economic targets, such as low budget deficits” (COSATU General Secretary, Zwelinzima Vavi’s address to the AGM of NEHAWU Securities, Nov 2008).” Answer the following: By making reference to the compulsory readings, discuss whether you think it was advisable for the South African government to increase government spending during the 2006 and 2007 financial periods. Explain why you feel this way with reference to the information contained in the readings. Tutor: Maite (14:15 - 15:00) Due Date: 20 September 2010 No. Of Words: 1097 INRODUCTION: This essay will explore the meaning of the fiscal policy, an increase in government expenditure and how it relates to inflation and the aggregate expenditure model. It will discuss whether it was advisable for the South African government to increase government spending during the 2006 and 2007 financial periods. The mains views that will be discussed will be based on how an increase in government expenditure affects the aggregate expenditure curve, what is the result of this on the GDP gap and also its effect on the inflation rate. Economic theories prove that an increase in government expenditure shifts the aggregate expenditure curve upwards which increases total aggregate expenditure and real GDP. I disagree with COSATU and think that it was not advisable...

Words: 1727 - Pages: 7