Interpretation of marketing data

• What is the purpose of confidence intervals in business?

  To determine data representativeness
• What does a confidence interval assess?

  Reliability of sampled data for forecasts
• If Company X expects to sell between 38 and 42 products, what does this represent?

  The confidence interval for sales
• How does a margin of error affect the confidence interval?

  A larger margin increases the interval size
• Why are confidence intervals useful for businesses?

  They help evaluate estimate reliability
• What factors influence the confidence interval?

  • Sample size
  • Population size
  • Percentage of sample choosing a particular answer
• What does a 90% confidence level indicate?

  90% of samples fall within the interval
• What does correlation measure in marketing?

  Strength of relationship between variables
• How is correlation typically represented?

  Using a scatter diagram
• In a scatter diagram, where is the independent variable plotted?

  On the x-axis
• What does the line of best fit represent?

  The mathematical relationship between variables
• What are the three types of correlation?

  Positive, negative, no correlation
• What indicates a strong correlation in data points?

  Little room between data points and line
• What is a common misconception about correlation?

  That correlation implies causation
• What is extrapolation in sales forecasting?

  • Uses historical data trends
  • Predicts future values based on past patterns
  • Assumes trends will continue unless evidence suggests otherwise
• What are the advantages and disadvantages of extrapolation?

  Advantages:

  • Simple method of forecasting
  • Requires little data
  • Quick and cost-effective

  
  

  Disadvantages:

  • Unreliable with significant fluctuations
  • Assumes past trends will continue
  • Ignores qualitative factors