marketing analysis

• <S>:Analyzing customer preferences allows marketers to better understand their needs and motivations, thereby enabling more effective product development, pricing strategies, and marketing communications.
• Elasticity of demand measures the responsiveness of the quantity demanded of a good or service to a change in its price, income, or promotion
• Price Elasticity of Demand (PED) measures the responsiveness of quantity demanded to a change in the price of the product
• PED formula: PED = (% Change in Quantity Demanded) / (% Change in Price)
• If PED > 1, demand is elastic; if PED < 1, demand is inelastic; if PED = 1, demand is unit elastic
• Businesses use PED to determine the impact of a price change on revenue
• Income Elasticity of Demand (YED) measures the responsiveness of quantity demanded to a change in income
• YED formula: YED = (% Change in Quantity Demanded) / (% Change in Income)
• If YED is positive, the good is a normal good; if YED is negative, the good is an inferior good
• Businesses use YED to determine the impact of income changes on the demand for their products
• Promotional Elasticity of Demand (PEDP) measures the responsiveness of quantity demanded to a change in promotional activities
• PEDP formula: PEDP = (% Change in Quantity Demanded) / (% Change in Promotional Activity)
• If PEDP is positive, the promotional activity has increased demand; if PEDP is negative, the promotional activity has decreased demand
• Businesses use PEDP to determine the impact of promotional activities on the demand for their products
• • Behavioral factors: Factors like habits, brand loyalty, and consumer preferences can influence the elasticity of demand, not always captured by traditional measures
  • Production constraints: Elasticity of demand assumes firms can adjust production in response to demand changes, which may not be possible due to constraints or limitations
• Limitations of elasticity measurement:

  • Assumptions: Elasticity of demand assumes all other factors affecting demand remain constant, which is not always true in reality
  • Time period: Elasticity of demand may differ over different time periods, with short-run elasticities differing from long-run elasticities
  • Availability of substitutes: Elasticity of demand assumes substitutes are readily available, which may not be the case for all products or services
  • Measurement errors: The accuracy of elasticity estimates depends on the reliability of data and assumptions made in the calculation, introducing measurement errors
  • Variability: Elasticity estimates may vary across different market segments like geographic regions, income levels, or age groups
  • Limited applicability: The concept of elasticity may not apply to all products and services, especially essential items or those with no close substitutes
• Product development is the process of creating and introducing new products or services into the market
• The stages of product development include:

  • Ideation
  • Screening
  • Concept development
  • Design and development
  • Testing and validation
  • Launch
• Ideation is the first stage of product development, involving generating new ideas for products or services from various sources like employees, customers, suppliers, and competitors
• Screening stage evaluates ideas for feasibility, profitability, and alignment with the organization's objectives to identify the most viable ones for further development
• Concept development stage further develops viable ideas into detailed concepts, defining the target market, product features, benefits, and marketing strategy
• Design and development stage involves prototyping, testing, and refining the product until it meets quality standards
• Testing and validation stage ensures the product meets required specifications and quality standards through various tests and trials
• Launch stage involves creating a marketing strategy to promote and sell the product or service to the target market
• Sources of new ideas for product development:

  • Customers: Provide feedback on needs and preferences
  • Competitors: Studying competitors' products to identify market gaps
  • Research and development: Leads to new product ideas and innovations
  • Employees: Offer insights based on industry knowledge and experience
• Research and Development (R&D) is the process of investigating and developing new products, services, or processes, or improving existing ones
• R&D is important in product development because it allows companies to:

  • Create new products meeting customer needs
  • Improve existing products
  • Stay ahead of competitors
• R&D enables companies to innovate and develop new technologies, products, and processes to:

  • Increase efficiency
  • Reduce costs
  • Improve product quality
• By investing in R&D, companies can:

  • Create new revenue streams
  • Diversify their product portfolio
• R&D helps companies to adapt to market changes, respond to trends, and meet customer demands
• R&D assists companies in maintaining or enhancing their brand image, reputation, and credibility as innovative organizations
• Sales forecasting is the process of predicting future sales revenue based on historical sales data, market trends, and other relevant factors
• It helps companies determine the expected demand for their products or services, estimate future revenues and profits, and allocate resources accordingly
• Sales forecasting impacts decision-making within a company by helping businesses to:

  • Plan production and inventory levels
  • Develop marketing strategies
  • Allocate resources
  • Make strategic decisions
• Methods of Sales Forecasting:

  • Time Series Analysis
  • Qualitative Sales Forecasting
• Time Series Analysis involves analyzing historical data to identify patterns and trends over time
• One technique in time series analysis is the four-period centred moving average method:

  • Calculate the average of sales data for a given time period
  • "Smooth" the data by taking the average of the previous two and next two periods
• Advantages of the four-period centred moving average method:

  • Simple to use and understand
  • Identifies trends and patterns
  • Smoothes out fluctuations for a more accurate forecast
• Limitations of the four-period centred moving average method:

  • Assumes historical patterns will continue
  • May not account for sudden changes or unexpected events
  • Less accurate for long-term forecasts
• Qualitative Sales Forecasting:

  • Predicts future sales based on expert opinions, market research, and non-quantitative data
  • Used when historical sales data is unavailable or when the future environment is uncertain