Marketing
“If everything seems to be going
well, you have obviously
overlooked something”
Marketing
Market Analysis
Candidates should be able to:
 give reasons for market analysis
 explain the value of market analysis
 use moving averages, test markets,
extrapolation and correlation to analyse markets
 describe situations where information
technology may be used in analysing markets
 evaluate difficulties in analysing markets
Marketing
Market Analysis
Market analysis involves looking at
data and identifying trends.
Reasons for analysing markets include:
Marketing
Market Analysis
Value of market analysis:
Marketing
Market Analysis
A trend is the u________ pattern of growth
or decline within a set of data.
Trends can only be seen with a reasonable
amount of data – one or two figures is not
enough!
Marketing
Market Analysis
Methods of trend analysis
include:
 extrapolation
 moving averages
 test markets or market research
 correlation
 ask ‘experts’
Marketing
Market Analysis
Extrapolation analyses the p________
performance of a variable such as sales and
extends this into the f__________.
Extrapolation can be done by ____ but a
more scientific approach is to use moving
averages.
Use the data on the next slide and work out
the three period moving average.
Marketing
Market Analysis
Year
period
sales
2005
1
3
2
2006
2007
3 period total
3 period moving average
6
3 + 6 + 7 = 16
16 ÷ 3 = 5.3
3
7
6 + 7 + 2 = 15
15 ÷ 3 = 5.0
1
2
2
5
3
7
1
3
2
5
Marketing
Market Analysis
Year
period
sales
2005
1
5
2
7
3
8
4
4
1
5
2
8
3
11
4
3
1
4
2
6
2006
2007
4 period total
8 period total
4 quarter
moving average
Marketing
Market Analysis
Year
period
sales
2005
1
5
2
7
4 period total
8 period total
4 quarter
moving average
24+24=48
48÷8=6.0
24+25=49
49÷8=6.125
5+7+8+4=24
3
8
7+8+4+5=24
4
4
8+4+5+8=25
2006
1
5
Etc.
Marketing
Market Analysis
The use of moving averages
should smooth out the
impact of random variations
in data and longer-term
cyclical factors, thus
highlighting the trend.
If asked to plot a graph you
should plot sales on the yaxis and time on the x-axis
Marketing
Market Analysis
By predicting trends, firms are able to
This is invaluable:
Marketing
Market Analysis
Need to be able to draw five types of trend:
 Positive expanding market
 Negative declining market
 S-trend (product life cycle)
 Zero trend
 No trend
Marketing
Market Analysis
What are the drawbacks of extrapolation?
Marketing
Market Analysis
IT can be used to analyse markets by:
Marketing
Market Analysis
The advantages of IT are that
However there are disadvantages –
Marketing
Market Analysis
Difficulties in analysing marketing data
 extrapolation: as earlier
 test markets:
 market research:
 ask ‘experts’: