Introduction to Market Analysis Theory.

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Introduction to Market Analysis

Market analysis

Set objectives

Decide on marketing strategy

Formulate plan

Evaluate

What is Market Analysis?

• Market research

• SWOT/ PEST analysis

• Extrapolation

• Correlation

• Delphi technique.

Correlation:

• This refers to how well a set of figures correspond with each other.

- A strong positive/negative correlation indicates that the underlying trend can be clearly identified.

- A weak positive/negative correlation indicates that the underlying trend can be vaguely identified.

- If there is no correlation there is no immediate connection between the variables.

Extrapolation:

• This is extending the line of figures to predict what may happen in the future.

- However this may be unpredictable, although with steady growth may not be a bad estimate.

- Although shocks are unknown.

Moving averages.

• A moving average is usually done over a fixed period of time such as six months or three years.

• It's simple- Add up the figures and divide by the number of months or years.

Difficulties in analyzing marketing data:

• Lots of information- Share, Sales, Trends, Competitor action.

• Time/ cost.

• Own research 'Marketing data' difficult to interpret.

• Marketing research may be outdated.

• Consumers are unpredictable.

• Biased? Research may be conducted by suppliers or directors.

• Distant forecasts are only predictions, shocks?

Delphi technique.

• Panel of experts (consultative)

• Often Economists, Politicians or lawyers that have retired.

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