17 Analysing Markets and Marketing 2
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Transcript of 17 Analysing Markets and Marketing 2
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Resources
Student notes
Tables
Wollinski p133-135 Eidos Lara Croft article
Graph paper
Calculators
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Analysing Markets
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Tomb Raider
1. How much was wiped off projected sales?
2. How many copies have been sold?
3. What are some of the reasons cited?
4. Why did Eidos revise its sales assumptions for Underworld
and other video games?
5. What are the consequences for the business of getting
the sales forecast wrong?
http://www.guardian.co.uk/business/2009/jan/09/travelleisure-games/print -
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What the spec says
Analysing Markets andMarketing reasons for, and the
value of, marketanalysis
methods of analysingtrends
the use of informationtechnology in analysing
markets difficulties in analysing
marketing data
Reasons for analysing marketsshould include: gathering evidence for
devising a new strategy,
identifying significant patternsin sales.
Candidates should be familiarwith moving averages, testmarkets and extrapolation asmethods of measuring andforecasting sales.
Candidates should understandhow correlation can be used inanalysing markets.
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Objectives
Explain the role of analysing markets
in sales forecasting
Outline four quantitative methods ofmarket of analysing market trends
Consider benefits and drawbacks of
different methods
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Sales forecasting
What do you need to know to forecast accurately?
Why is it important to get it right?
What things can impact your sales forecast?
How can make your forecast as accurate as
possible?
How might forecasting impact other areas of the
business?
http://www.youtube.com/watch?v=glAPU9yjOMI -
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Main approaches
Test Markets
Moving averages
Extrapolation
Correlation
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Test Marketing
Launching a product in a limitedpart of the market, usually ageographical area
Used to predict sales on theassumption that the results will berepeated across the whole country
Relatively accurate predictor ofpopularity
Not nearly as expensive as anational launch
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New, New Coke?
Coca-Cola trials sweet, fizzy, milky 'vibrancy'drink in three US cities
Soft drinks giant launches new Vio drink in NewYorkbut no word yet on whether it will reach theUK
It may not quite sound the real thing butconsumers are being asked to decide whether milkgoes better with sparkling water, cane sugar andfruit flavouring.
Coca-Colais trialling a new carbonated "vibrancy"drink and it will depend on Americans' tastebuds
whether other countries experience what thecompany claims is "a refreshing sensoryexperience".
The soft drinks giant has so far launched its newVio products only in New York, but milk-basedproducts are popular in Asian markets such asHong Kong and Japan.
The launch of Vio in the US is an excitingdevelopment for consumers there," said aspokesperson for Coca-Cola GB. "We are
constantly listening to consumers to ensure weprovide them with innovative new beverages thatmeet their preferences and needs. However we
currently have no plans to launch Vio in any
country in Europe."
http://www.coca-cola.com/index.jsphttp://www.coca-cola.com/index.jsphttp://www.guardian.co.uk/business/cocacolahttp://www.guardian.co.uk/business/2009/jul/27/coca-cola-carbonated-milk-drinkhttp://www.guardian.co.uk/business/cocacolahttp://www.coca-cola.com/index.jsp -
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Test Marketing dangers
Copy cat moves by competitors Reduces lead time
Market move fast and delaying thenational launch may mean missing theboat
Novelty value people buy it once
Loads of effort on test marketing (special
deals etc.) not followed through in real life
BOGOF!
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Got it?
Now for something completelydifferent.
You need
Graph paper
Pencil
Ruler
Table
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Moving averages
Plot the graph of data
Reflection what can we interpret forthis data
Smooth the data moving averages
What can interpret?
Plot the moving average data Review moving averages as a model pros and cons
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Sales Data
Sales000
3 month movingaverage
January 9
February 12
March 15
April 15
May 18
June 21
July 9
August 18
September 21
October 24
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Sales Data
Sales000
3 month movingaverage
January 9
February 12
March 15
April 15
May 18
June 21
July 9
August 18
September 21
October 24
Task 1
Plot the data ongraph paper
sa
les
months
What can weinterpret fromthis data? Canyou see a trend?
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Calculate the moving average
This looks at several periods at atime and averages out the data
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Sales Data
Sales000
3 month movingaverage
January 9
February 12
March 15
April 15
May 18
June 21
July 9
August 18
September 21
October 24
E.g.
(Jan+Feb+Mar)/3Then(Feb+Mar+Apr)/3
Write this in thecentre of your table
and the value in thefar right column
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Sales Data
Sales000
3 month movingaverage
January 9
February 12 (9+12+15)/3 12
March 15 (12+15+15)/3 14
April 15 (15+15+18)/3 16
May 18 (15+18+21)3 18
June 21 (18+21+19)/3 16
July 9 (21+9+18)/3 16
August 18 (9+18+21)/3 16September 21 (18+21+24)/3 21
October 24 (21+24+12)/3 19
November 12 (24+12+24)/3 20
December 24
Now replot a new graph nextto your previous one
What can weinterpret fromthis data? Canyou see a trend?
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Calculate the moving average
This looks at several periods at atime and averages out the data
Hi/Lo figures are smoothedby theaveraging process
The underlying trend is clearer
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Examiners note
Unlikely you would be asked to do
this in an exam
The data might be provided that
show a trend and/or seasonal
variations that have already been
calculated
Or you may be required tointerpret a graph
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Extrapolation
Identify the trend andproject forwards
Only likely to beeffective if market
conditions continue todevelop in the futureas they have done inthe past
Risky in markets
where technology isdeveloping rapidly
sa
les
months
xx
xx
xx x
xx
x
x
Present Future
trend
Extrapolatedtrend
Kodak and digital camerasCD manufacturers and MP3 players
Beef and BSE
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Correlation
Attempts to identify whether there isany correlation between differentvariables and the level of sales
What would influence you to buy?
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Correlation
Ifmarketers can identify the keyfactors that determine thedemand for their goods, and theycan estimate what is happeningto these factors, they can
estimate total market sales andtheir likely sales
Positive correlation means adirect link, e.g. advertising
Negative means inverserelationship, e.g. price increase
sa
les
advertising
pr
ice
sales
N.B. Correlationidentifies apparent link
but does not showcause and effect
http://www.google.co.uk/trends?q=bp&ctab=0&geo=all&date=all&sort=0 -
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Time for a breather
Analysing Markets andMarketing reasons for, and the
value of, marketanalysis methods of analysing
trends the use of information
technology in analysing
markets difficulties in analysing
marketing data
Reasons for analysing marketsshould include: gathering evidence for
devising a new strategy,
identifying significant patternsin sales.
Candidates should be familiarwith moving averages, testmarkets and extrapolation asmethods of measuring and
forecasting sales.
Candidates should understandhow correlation can be used inanalysing markets.
-
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Objectives
Explain the role of analysing markets
in sales forecasting
Outline four quantitative methods ofmarket of analysing market trends
Consider benefits and drawbacks of
different methods
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The use of IT in analysingmarkets
Forecasting can be done much more quickly andregularly
Can multiply the number of strategies andcompare to see which is best
Can link databases and sales records to spotcorrelations and patterns
Knowledge Management
Loyalty cards
http://www.accsys-corp.com/Knowledge_Work_Resources/KM_Market_Map/knowledge_management_market_map.gif -
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Homework
Read Case Study: Unilever Ice Cream
Complete Practice Exercise 4 Qs1-9
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The Hot Seat! You have 3 mins to think of a
question based on todays material
In the meantime the hot seatselector will pick 3 individuals to sit
in the hot seat to answer thequestions you put to them!
http://classtools.net/education-games-php/fruit_machine/