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3.8   analysing markets and marketing - moodle
 

3.8 analysing markets and marketing - moodle

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A2 Business Studies Resources

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  • Demographic/ geographic groups may not be suitable. Rival firms may steal ideas. Difficult to do if expanding abroad. Sample size may not be a suitable representation.
  • If backdata – may not reflect changes in consumer buying habits. Consumers do not behave in a predictable ways. Data may be biased.

3.8   analysing markets and marketing - moodle 3.8 analysing markets and marketing - moodle Presentation Transcript

  • Do NowQuestions: Answers:1.What is market analysis? 1.Detailed examination of the features of a market.2.What might be analysed? 2.Size, value, growth, segments, competition.3.Why is it so important tobusinesses? 3.Predict future trends, identify patterns in sales, gather evidence for devising new strategies.
  • Analysing Markets and Marketing
  • Learning ObjectivesBy the end of the lesson you should be able to:1.Explain the reasons for market analysis.2.To identify and use different methods for analysingmarkets.3.Assess how businesses use their own marketing datato analyse markets.
  • What methods can a business use to predict what is going to happen in the future?
  • Moving AveragesFig 1. Graph show wild fluctuations Fig 2. The same graph showing the underlying trend
  • Moving Averages∗ Data covering a period of time may be subject to underlying trend: Sunday, 6 April 2008∗ The trend itself∗ Cyclical fluctuations∗ Random fluctuations
  • Moving Averages∗ What do they help businesses find? ∗ Underlying trend ∗ Predict future trends ∗ Moving averages smooth out data∗ Moving averages plot the trend of sales on a weekly, monthly or quarterly basis.
  • Example Annual sales of Clippity Clocks Ltd — clock manufacturer Year Clock sales Three-year Three-year (£000’s) moving total moving average 2000 1,500 — — 2001 1,550 4,550 ÷ 3 = 1,517 2002 1,500 4,700 ÷ 3 = 1,567 2003 1,650 4,725 ÷ 3 = 1,575 2004 1,575 4,820 ÷ 3 = 1,607 2005 1,595 4,870 ÷ 3 = 1,623 2006 1,700 5,100 ÷ 3 = 1,700 2007 1,805 5,270 ÷ 3 = 1,757 2008 1,765 5,470 ÷ 3 = 1,823 2009 1,900 5,545 ÷ 3 = 1,848 2010 1,880 —
  • Annual sales of Crazy Eyes - AnswersYear Sales Three-year moving total Three-year (£000’s moving average )2001 400 - -2002 600 1,700 ÷ 3 566.662003 700 1,950 ÷ 3 650.00 Complete Question 1 on the moving averages2004 650 2,050 ÷ 3 worksheet. 683.332005 700 2,200 ÷ 3 733.332006 850 2,500 ÷ 3 833.332007 950 3,000 ÷ 3 1,000.002008 1200 3,050 ÷ 3 1,016.662009 900 3,300 ÷ 3 1,100.002010 1200 —
  • Extrapolation∗ What is extrapolation? ∗ Benefits: ∗ Using past and present data ∗ Help with marketing and t0 make a prediction of future distribution strategies, help set trends. sales targets, budgets, ∗ If businesses assume that this workforce and production trend will continue, future planning. sales figures can be predicted. ∗ Drawbacks: ∗ In high-technology, fast paced or dynamic markets –∗ What are the benefits/ extrapolation is less useful or drawbacks? misleading.
  • The following data show the average daily sunshine (hours) over the past 6 years and the amount spent on sun cream (£) during the same period. Plot this data on a scatter graph What do you notice?Year 00 01 02 03 04 05Average daily sunshine 3.96 4.15 3.75 4.00 4.80 4.75(hours) (x)Sales of sun cream (£m) 32 37 32 33 40 40(y)
  • CorrelationA statisticaltechnique used toestablish thestrength of therelationshipbetween twovariables.
  • Positive Correlation x x xSales of Blu-ray discs x x x x x x Sales of Blu-ray players
  • Negative Correlation x x xSales of Tesco Value products x x x x x x Average household income
  • Zero Correlation x x xSales of luxury cars x x x x x x x x x x Sales of stamps
  • Correlation Skiwear Advertising and SalesCorrelation between skiwear advertising and sales
  • Positive or Negative?What correlation would you expect from the following?1.Baked bean sales and sofa sales2.Unemployment and sofa sales3.House sales and sofa sales
  • Correlation∗ What are the Pros and Cons to correlation? Pros Cons Identify relationship Shows link not cause between variables and effect Inform decisions e.g. Strong correlation may marketing expenditure be caused by other factors
  • Test Marketing Using own marketing data∗ What is test marketing? ∗ A firm will replicate the elements of product launch including promotion, distribution and price, to a geographic region or demographic group to judge the viability of the product in the market before a full scale launch.∗ Can you think of any possible drawbacks to this method?
  • Primary Research Using own marketing data∗ How would primary research be used? ∗ Could be used in decision- making. ∗ Determine future marketing campaigns.∗ Why might marketing data be incorrect or misleading?
  • The use of information technology in analysing markets∗ How can firms use IT to collect and analyse data? Benefits: ∗ Businesses can now collect data Information processed through store cards, online quickly, build an electronic questionnaires or blogs. database, profile of customers.∗ Write down one benefit and one drawback to collecting and analysing Drawbacks: data in this way. Information overload can slow down the decision making process, quick access to information may cause decision- makers to over react.
  • A blooming business∗ Complete the case study based on a blooming business (AQA P63).
  • What can you remember?Draw a correlation diagram to show a positive correlation.
  • What can you remember?What is a drawback of test marketing?
  • What can you remember?Draw a correlation diagram to show a negative correlation.
  • What can you remember?What is meant by extrapolation?
  • What can you remember? What is the purpose ofcalculating moving averages?
  • What can you remember?What is a benefit of using IT to analyse markets?
  • Learning ObjectivesBy the end of the lesson you should be able to:1.Explain the reasons for market analysis.2.To identify and use different methods for analysingmarkets.3.Assess how businesses use their own marketing datato analyse markets.