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MARKETING STRATEGIES
ANALYSING MARKETS AND MARKETING B
USS3
.8 A
naly
sing M
arke
ts and M
arke
ting
ANALYSING MARKETS AND MARKETING
IN THIS TOPIC YOU WILL LEARN ABOUT:
Reasons for, and the value of, market analysis
Methods of analysing trends
The use of information technology in analysing markets
Difficulties in analysingmarketing data
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
MARKET ANALYSIS
Market Analysis
Consumer trends
Sales data
Market size
Actions of Competitors
Internal data
Customer opinion
Social factors
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
REASONS AND VALUE OF MARKET ANALYSIS
Devising strategy Understanding the market/Keep up to date Identify sales patterns Review of competitors’ actions
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
What trends can be identified in consumers’ behaviour?
What factors have influenced these trends?How has Asda responded to these trends?
ANALYSING MARKETS - CORRELATION
Identifying 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
Negative the 2 variables move in opposite directions e.g. As road tax prices go up the sales of new 4 x 4s goes
down Zero
There is no relationship between the factors e.g. Rain fall and text books
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
ANALYSING MARKETS - CORRELATION
Correlation 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.
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
-1 0 +1
Strong negative Zero Strong positive
Negative Positive
METHODS OF ANALYSING TRENDS – MOVING AVERAGES
One of the key reasons for market analysis is to identify significant trends and sales patterns
Moving averages Shows whether a trend is significant by
smoothing out fluctuations in data Allows for better identification of an overall trend Sufficient data is needed to give validity to the
trend identified
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
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 £4
Average is £2.67mAdd all the numbers up and divide by 6
CALCULATING MOVING AVERAGES
Year / Quarter
Sales £m
4 period Moving average
2009/Q1 10
2009/Q2 14 11.25
2009/Q3 12 11.5
2009/Q4 9 11.25
2010/Q1 11
2010/Q2 13
2010/Q3 12
2010/Q4 11
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
10+14+12+9 = 4545/4 = 11.25
14+12+9 +11 = 4646/4 = 11.5
Show how this figure was calculated
Calculate the next two moving averagesPlot a graph to show both the quarter
figures and the moving average figures
METHODS OF ANALYSING TRENDS – EXTRAPOLATION
Using 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
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
METHODS OF ANALYSING TRENDS – EXTRAPOLATION
A useful technique when trends can clearly be identified and
The market is relatively stable However
The past is not always a good indication of the future
Conditions and trends can soon change Competitors’ actions Consumer tastes Market conditions
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
DIFFICULTIES IN ANALYSING MARKETING DATA
May slow down the decision making process Hunch v. Scientific Loss of first mover advantage
Opportunity cost Time and financial cost - Training May quickly become out of date Past not always a fair indication of the future Competitors’ reactions
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
TEST MARKETS – TO INFORM SALES FORECASTS
Uses a geographical area as representative of the whole market
Can 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
BU
SS3
.8 A
naly
sing M
arke
ts and
Marke
ting
