Analysing Markets and Marketing BUSS38 Analysing Markets and Marketing Analysing Markets and Marketing In this topic you will learn about Reasons for and the value of market analysis ID: 462790
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Marketing StrategiesAnalysing Markets and Marketing
BUSS3.8 Analysing Markets and Marketing Slide2
Analysing Markets and Marketing
In this topic you will learn about:
Reasons for, and the value of, market analysisMethods of analysing trendsThe use of information technology in analysing marketsDifficulties in analysing marketing data
BUSS3.8 Analysing Markets and Marketing Slide3
Market Analysis
BUSS3.8 Analysing Markets and Marketing Slide4
Reasons and Value of market analysisDevising strategyUnderstanding the market/Keep up to date
Identify sales patterns
Review of competitors’ actions
BUSS3.8 Analysing Markets and Marketing What trends can be identified in consumers’ behaviour?What factors have influenced these trends?How has Asda responded to these trends?Slide5
Analysing markets - CorrelationIdentifying a relationship between 2 variables
E.g. Marketing budget and sales
Correlation can be:Positive the 2 variables move in the same direction e.g. As temperature goes up ice cream sales go up
Negativethe 2 variables move in opposite directions e.g. As road tax prices go up the sales of new 4 x 4s goes downZeroThere is no relationship between the factors e.g. Rain fall and text booksBUSS3.8 Analysing Markets and Marketing Slide6
Analysing markets - CorrelationCorrelation can be expressed on a spectrum from -1 to +1.
It can also be shown on a graph by plotting the coordinates and then drawing a line of best fit.
BUSS3.8 Analysing Markets and Marketing
-1 0 +1Strong negative Zero Strong positive
Negative
PositiveSlide7
Methods of analysing trends – Moving AveragesOne of the key reasons for market analysis is to identify significant trends and sales patternsMoving averages
Shows whether a trend is significant by smoothing out fluctuations in data
Allows for better identification of an overall trendSufficient data is needed to give validity to the trend identified
BUSS3.8 Analysing Markets and Marketing Before looking at how to calculate moving averages first check your understanding of averages.Sales in £m for 6 months are £2, £2.5, £3, £3, £1.5 and £4Average is £2.67mAdd all the numbers up and divide by 6Slide8
Calculating moving averages
Year / Quarter
Sales £m 4
period Moving average2009/Q1102009/Q21411.252009/Q31211.5
2009/Q4911.252010/Q1
11
2010/Q2
13
2010/Q3
12
2010/Q4
11
BUSS3.8 Analysing Markets and Marketing
10+14+12+9 = 45
45/4 = 11.25
14+12+9 +11 = 46
46/4 = 11.5
Show how this figure was calculated
Calculate the next two moving averages
Plot a graph to show both the quarter figures and the moving average figuresSlide9
Methods of analysing trends – ExtrapolationUsing past data to extend an identified trend into the future
A general slow upward trend has been identified and from this yr 6 and 7 have been extrapolated
BUSS3.8 Analysing Markets and Marketing Slide10
Methods of analysing trends – ExtrapolationA useful technique when trends can clearly be identifiedandThe market is relatively stable
However
The past is not always a good indication of the futureConditions and trends can soon changeCompetitors’ actionsConsumer tastes
Market conditionsBUSS3.8 Analysing Markets and Marketing Slide11
Difficulties in analysing marketing dataMay slow down the decision making processHunch v. ScientificLoss of first mover advantage
Opportunity cost
Time and financial cost - TrainingMay quickly become out of datePast not always a fair indication of the futureCompetitors’ reactions
BUSS3.8 Analysing Markets and Marketing Slide12
Test Markets – to inform sales forecastsUses a geographical area as representative of the whole marketCan collect data and extrapolate to the whole market
Area chosen must be fairly representative of the population as a whole
Danger – competitors become aware of actions before full scale launch
BUSS3.8 Analysing Markets and Marketing