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BSBMKG507AINTERPRET MARKET TRENDS AND DEVELOPMENTS
OBJECTIVES
• Know how to interpret trends and market developments
• Learn how to analyse qualitative results
• Understand how to report on market data
• Gain the essential skills and knowledge required for this unit
INTERPRET TRENDS AND MARKET DEVELOPMENTS
1.1. Use statistical analysis of market data to interpret market trends and developments
WHAT IS STATISTICAL ANALYSIS?
Analysis in terms of using statistics will generally involve
these types of functions:
• It will describe something
• It will require exploring
• It will need understanding
• It will need to be proven
• It would aim at predictions
THE PURPOSE OF DOING THIS COULD BE:
• To understand the circumstances surrounding a trend or
development.
• To develop further a prediction based on current or suspected
trends or development.
• Something which may not have occurred yet.
• Something that might be in existence but you need to obtain more
specific detail suitable to your circumstances.
• Part of a future plan.
STATISTICAL ANALYSIS MAY INCLUDE:
• Conversion rate of leads to sales
• Measures of central tendency particularly for such things as:
o Average order value
o Average response rate
• Measures of dispersion
• Nature and degree of relationship between variables
• Net response rate
• Normal distribution probability curve
• Sampling
STATISTICAL ANALYSIS MAY ALSO INCLUDE:
Time series analysis such as:
• Speed of response curve
• Recency or frequency grids
• Lifetime value of customers
• Net present value of customers
DATA MAY INCLUDE:
• Charts
• Curves
• Graphs
• Spreadsheets
MARKET TRENDS AND DEVELOPMENTS MAY INCLUDE:
• Changes in technology
• Changes in supplier prices
• Demographic trends
• Ecological and environmental trends
• Economic trends (local, regional, national, international)
• Government activities e.g. Interest rates, deregulation
• Industrial trends
• Penetration of new technologies
• Social and cultural factors
MARKET TRENDS AND DEVELOPMENTS
Market trends are when various markets (including yours) respond to
the ups and downs of the prices or Other associated influences. The
term is used frequently in financial markets to describe a trend that is
"bull" or "bear."
MARKET DEVELOPMENT CAN MEAN THE EXPANSION:
• Entering into new segments of the market
• Converting past or dormant customers into current users
• Increasing current customer usage patterns
• Changes in technology
• Changes in supplier prices
• Demographic trends
• Ecological and environmental trends
• Economic trends (local, regional, national, international)
• Government activities e.g. Interest rates, deregulation
• Industrial trends
• Penetration of new technologies
• Social and cultural factors
INTERPRET TRENDS AND MARKET DEVELOPMENTS
1.2. Analyse market trends and developments for their potential impact on the business
TO USE TREND ANALYSIS:
• Identify areas where your business is performing
well so you can duplicate that success.
• Identify areas where your business is
underperforming.
• Provide evidence to inform your decision making.
USING PREDICTIVE ANALYTICS TO ANTICIPATE FUTURE TRENDS
• Use as a valuable warning indicator of potential problems and
issues.
• Can help identify issues with products or services in terms of
changes with customers/clients.
• Predictive analysis may forecast variables in service or satisfaction
levels in quality.
• Such analysis will be used following a particular "marketing event"
that may see changes to your business trends.
• Predictive analysis can also be used to gauge response rates from
clients/customers spread over time ad is not just suited to
immediate issues or changes.
MANY BUSINESSES CAN DEVELOP A FORECASTING PROCESS BY SIMPLY:
• Collecting relevant data on your customers in order to create
useful profiles.
• Detail customer experiences both good and bad.
• Use profiling software or manual methods to segment markets,
demographics and other trends.
• Ensure data has accurate profiles on customer geography, basic
demographics and purchase history.
ANALYSE MARKET TRENDS AND DEVELOPMENTS
In order to analyse market trends, you need to ensure the correct
research is used. For example, informed trend analysis can only be
successfully interpreted using "Quantitative" style questions that
would provide you with information based on:
• Multiple choice
• Rank in order
• Measurements such as frequency
• Information derived from qualitative data (text) on its own is not
all that useful for trend analysis.
QUANTITATIVE RESEARCH CAN ALSO BE USED TO MEASURE
• Customer/client/company attitudes
• Satisfaction levels of different requirements
• Customer/client commitment
• Customer awareness and attitudes
• Customer behaviour trends
• Other useful market research data
INTERPRET TRENDS AND MARKET DEVELOPMENTS
1.3. Use measures of central tendency or dispersion and correlations between sets of data for quantitative interpretation of comparative market data
MEASURES OF CENTRAL TENDENCY OR DISPERSION AND CORRELATIONS MAY INCLUDE:
• Cross-tabulations for grouped or ungrouped data
• Mean
• Median
• Mode
• Z, T and chi square tests
GROUPED OR UNGROUPED DATA?
Grouped data is data that has been organised into groups sometimes
referred to as classes. It has had some level of treatment that allows
analysis to take place which means that the data is no longer raw.
AN EXAMPLE:A histogram, for example, is a bar chart for grouped numerical data
in which the frequencies or percentages of each group of numerical
data are represented as individual vertical bars.
• Histograms are for grouped numerical data
• Bar charts are for categorical data categories
UNGROUPED DATA• Any data that you first gather is ungrouped data.
• Ungrouped data has not been organised into groups. It is just a list
of numbers.
• Ungrouped data is data in the raw. An example of ungrouped data
is any list of numbers that you can think of.
MEAN, MEDIAN AND MODE
• These references are averages.
• There are many averages in statistics and data
analysis.
• Mean, median and mode are usually the most
common and the likely references you would
encounter in your market trends and
development analysis or statistical results.
MEAN, MEDIAN AND MODE
• Mean is the average where you add up a series of numbers and
then divide the result by the number of number references.
• The median is the middle value in the list of numbers.
• The mode is the value that occurs most often. If no number is
repeated, then there is no mode for the list.
SEGMENTATION BY THE CUSTOMER CAN UNCOVER DATA SUCH AS:
• Average order value by units or dollars
• Geography
• Lifetime value by units, dollars and transactions
• Recency and frequency or response/purchase
• Segmentation of the prospect list by:
o Demographic match with customers
o Geographic match with customers
o Psychographic match with customers
THEREFORE…
Data segmentation is sued in your research and analytics to group
customers/clients or your reason for researching the market trends
into identifiable and measurable classes, such as:
• Age
• Gender
• Buying habits
• Interests
MARKET SEGMENTATION RESEARCH
Cluster-based marketing, provides market research tools to segment a
population or geography according to criteria important to your
business. These include:
• Demographics
• Psychographics (lifestyle and behavioural data)
• Customer or consumer preferences
• Buying patterns
INTERPRET TRENDS AND MARKET DEVELOPMENTS
1.4. Perform qualitative analysis of comparative market information as a basis for reviewing business performance
COMPARATIVE MARKET INFORMATION MAY INCLUDE:
• Best practice information
• Books and articles, including:
o academic
o business
o general
o industry
o brochures
• Direct mail packages
• Documentaries and interviews
on broadcast media
• Inter-firm comparison data
• International benchmarking
• Internet
• Public or proprietary research
• Speeches
BEST PRACTICE INFORMATION
• A set of guidelines, ethics or ideas
• Consider all stakeholders
• Guidelines set in place by an authority, such as a governing body
or management
• Deliver consistent outcomes
• The most efficient way to complete tasks
• Minimise resource, maximise results
• Show results superior to those achieved using other means.
DOCUMENTARIES AND INTERVIEWS ON BROADCAST MEDIA
• Illustrations, television programmes, interviews and other
interactive web site data and available software.
• Using available and appropriate broadcast media you can easily
categorise, investigate, interpret and identify the most appropriate
data sources in the private or public domain.
• Field research can be useful as a primary research method using
direct contact in interviews, focus groups and surveys.
OTHER QUALITATIVE METHODS INCLUDE:
• Inter-firm comparison data
• International benchmarking
• Internet
• Public or proprietary research
• Speeches
INTERPRET TRENDS AND MARKET DEVELOPMENTS
1.5. Analyse the market performance of existing and potential competitors and their products or services, to identify potential opportunities or threats
PERFORMANCE OF EXISTING AND POTENTIAL COMPETITORS MAY INCLUDE:
Comparisons about:
• corporate share price
• market share
• number of customers
• profitability
• sales in units or dollars
OPPORTUNITIES MAY INCLUDE:
• Alliances
• Cooperative ventures
• Exports
• Extending, expanding or
otherwise changing an existing
business
THREATS MAY INCLUDE:
• New competitor entering the market
• New products or services being launched by
existing competitors
• Increased number of inactive customers
resulting in reduced average lifetime
• Reduced average order value resulting in
reduced average lifetime value
ANALYSE THE MARKET PERFORMANCE OF EXISTING AND POTENTIAL COMPETITORS
A SWOT “STYLE” analysis can be used to evaluate:
Corporate share price
Products Companies and
departments Structures Entire markets Investments Positioning
Market share Number of
customers Profitability Sales in units or
dollars
EXISTING AND POTENTIAL COMPETITORS
• Competitor analysis would involve primarily identifying those organisations that may already compete with you on similar brands, products or services.
• Competitive analysis may also involve identifying products that fit your market trends and development goals or areas of interest.
• When analysing the existing and potential competition you would normally follow a process, which then leads to the SWOT style competitive analysis.
• In that process there would be key areas to identify that fit within your specific objectives.
SAMPLE SIZE?
• Depending on the size of your market, it would be necessary to establish the number of competitors or in fact the realistic number of potential competitors first.
• It would obviously be foolish to try and analyse the entire market if your market is huge!
• You could apply the well trusted and used 80/20 rule.
• With a large market or one that maybe stretches over large geographic areas or ranges of services, it could be determined by “probability” that 80% of your total market revenue is through 20% of your customers, and similarly that of the competition.
IT’S THE 20% YOU WOULD EXAMINE MOST CLOSELY
• Segmentation of markets you have covered, but in the context of existing or future competitive analysis it is often necessary to do this especially when you are analysing many different brands of products.
• Market Segmentation, or breaking down larger markets into smaller groups, is an added process to follow for identifying strengths, weaknesses, opportunities and potential or Existing threats.
• In a wide competitive environment analysis resulting from segmentation may assist in uncovering pricing, distribution, service and new product development ideas that observations from a larger group would likely hide.
ANALYSE QUALITATIVE RESULTS
2.1. Analyse performance data from all areas of the business to determine success of marketing activities
THE PROCESS
Focus on the text rather than on numbers. The text and discussion
used in gathering your qualitative research material will be contained
in:
• Files
• Scripts
• Interviews
• Notes
• Participants
• Observations
• Pictures
• Images
• Website pages and links
• Researcher statements
ANALYSE PERFORMANCE DATA FROM ALL AREAS OF THE BUSINESS
• Use a management information system to review all areas of the
business.
• Ensure the system you choose collects the types of qualitative
data as described above and is meaningful to your purpose.
• As you intend to analyse across all areas of the business, make
sure you have in place communication procedures that everyone
can understand and follow.
• The end result, must ensure all business data collected, recorded,
reported and evaluated is handled quickly and efficiently so there
are no time issues that would reflect on relevancy.
PREPARING PERFORMANCE DATA FROM ALL AREAS OF THE BUSINESS
Measurement profile and
reviewing marketing activities:
• Measure
• Record
• Review against expected
outcomes (example, KPI’s)
• Report
• Communicate
HOW ACCURATE ARE THE RECORDS HELD BY ALL AREAS OF THE BUSINESS?
Are you satisfied are you that departments or areas of the business
as intended in the template example above, are sufficient?
Do they include current and past marketing campaigns that will assist
in determining performance data from all areas of the business in
determining the success of marketing activities? As well as:
• Relevant business records to the task in hand?
• Detailed financial information to support your objective?
• Staff records and other HR material?
• Stock and asset records?
OTHER THINGS TO CONSIDER:• Timing
• The accuracy of stock or asset records, definitions and standards
• Working with teams
• Limitations
ANALYSE QUALITATIVE RESULTS
2.2. Identify over-performing and under-performing products and services to be considered for redevelopment or withdrawal
WHY IS IT NECESSARY TO DETERMINE WHAT PRODUCTS AND SERVICES ARE OVER-PERFORMING OR UNDER-PERFORMING?
You need to make an ‘informed’ assessment of
what:
• To continue to do the same thing
• To stop doing what you are doing now
• To promote more or less
• To make changes to areas such as stock
• Engage more human resources or reduce them
• To be considered for redevelopment or withdrawal.
SOURCING INFORMATION
• Regularly review the performance of products and services in
simple analysis reporting formats.
• Regularly identify how your business is placed in your market.
• What position do you hold? Leader…follower or player?
• Such simple analysis would need to be revisited and updated on a
regular basis so that your business plans are meaningful and align
with your marketing strategy.
• To establish and interpret market trends and developments this
information of where you have been and where you are going is a
vital part of that equation.
A GOOD STARTING POINT
• Detail the core activities, either the products or services that you
represent.
• Are they successful and how do you know this? Sales results,
market acceptance, feedback; whatever your measurement tool
is.
• As this session refers to analysing information through qualitative
results, refer to this method in your product or service
assessment.
SOME TELL-TALE SIGNALS
• Are you or your marketing team/sales department frequently
reviewing costs?
• Are these and other key departments or stakeholders keeping an
informed and appropriate management view on your direct costs?
• Are you overheads and your assets being satisfactorily managed?
• Are there different ways of doing things without compromising
your existing controls but they are not being done?
• Is there resistance to new materials or services practices to
address over-performance and under-performance issues?
• Are there issues with customer or client negotiation that could
improve deals with your suppliers?
KEY POINTS
• Although the way forward may be with new redeveloped products
and services has the market changed or are these concerns
internal.
• Making significant market changes to embrace trends or
redevelopment will need significant alterations to product and/or
service features and this could result in further issues.
• Your existing ‘branding’ will need consideration.
• What would the impact be on your existing or future distribution
channels?
FORECASTING TECHNIQUES MAY INCLUDE:
• Delphi techniques
• Model building
• Projection
• Scenario planning
• Surveys of intentions
• Top-down forecasting bottom-up forecasting
WHAT IS FORECASTING?
• Forecasting is a process for projecting estimates. In this case it is
for estimating existing and emerging market needs.
• Forecasting is generally described as “predicting” whatever the
objective may be. Importantly, in looking at emerging markets,
forecasting gives you a picture of what the market will look like.
• Planning, however, predicts what the future should look like.
WHAT IS A DELPHI TECHNIQUE?
• A structured group communication process.
• Used a method of considering opinions and allowing a group to
deal with specific complex problem.
• Individual opinions are compiled and considered
• These are then usually shared amongst the group but usually not
disclosed as to who provided what opinion.
• The various request for opinions is repeated until an overall group
consensus is reached.
(Origins: A USA air force model used from the 1950’s as a method of solving
an issue by using consensus)
WHAT IS TOP-DOWN FORECASTING AND BOTTOM-UP FORECASTING?
• Both top down and bottom up forecasting are cost estimation
techniques used mainly in project management.
• Both are forms of forecasting therefore a process for projecting
estimates. In this course example, it could be for estimating existing
and emerging market needs.
• The main difference between the two is that bottom up estimating is
more accurate (but takes a long time to do), while the top down
estimating technique is fast (but not accurate at all).
• Both have the same goal.
EXAMPLES:
• Top down forecasting means breaking down the overall sales
prediction into multiple brands, products or other identifiable
units. This method of forecasting begins with the big picture and
breaks it down into component parts.
• The opposite of top-down forecasting is the bottom-up approach.
In this approach, the forecaster uses, as in this example, sales
data to make predictions for each item in each sales area. Then
statistical methods sum up the item forecasts to create the
forecast at the higher group level. This method starts with the
component parts to create a forecast for the entire business.
IDENTIFY SIGNIFICANT DEVELOPMENTS THAT WILL ASSIST YOU IN PREDICTING EXISTING AND EMERGING MARKETS
NOTE: Some of these can be structured within forecasting techniques
provided they are intentionally allowed for.
• Significant shifts in your markets economic position
• Un-scheduled fluctuations
• Unexpected new competitors into your market
• New or highly improved technical advances in your market.
RECOGNISING CHANGE
• Both fundamental and unexpected
• look closely at your market dynamics, e.g., the competitive
landscape and any unexpected regulatory environment change
• Use the best business model you have for identifying emerging
market analysis
• Is there change in your own product marketing strategy
REPORT ON MARKET DATA
3.1. Prepare, plot and interpret data for visual presentation
3.2. Assess visual presentation for potential problems, and take any necessary corrective action
OUTCOMES:
• Did the forecasting technique/s undertaken actually assist?
• Did the forecasting technique/s undertaken result in a range of
options?
• Did the forecasting technique/s process identify existing market
needs?
• Did the forecasting technique/s process identify emerging market
needs?
• Compare these actual findings with the predictions made at the
beginning of this template.
PREPARE AND PLOT
• Graphs and charts help illustrate different types of data.
• Presentations are best to express trends, progress and statistical
information about existing and emerging markets.
CHOOSE THE METHODS OF PREPARATION AND PLOTTING DATA CAREFULLY
• If you can prepare and provide suitably
qualified information, a plot may be simply
communicating your information in a written
format rather than preparing and plotting the
same message illustratively.
• If the information can be relayed and
understood clearly, efficiently, and with the
desired impact then this could be the solution.
PREPARING AND PLOTTING YOUR RESULTS INTO TABLES, GRAPHS AND CHARTS, AS AN EXAMPLE
• Best used to focus on specific or individual values such as dollars
or dates.
• Best used to compare values rather than just explaining in a text
format.
• Best used when there is a real need to express or visualise precise
data values.
• Best used when the data involves multiple units of measurement.
PRESENTATION
What is the purpose of your
presentation?
• Inform
• Persuade
• Inspire
• Motivate
• Share
Is your audience:
• Experienced?
• Culturally diverse?
• Aged?
• Disabled?
PRESENTATION FORMAT AND DELIVERY METHODS MAY INCLUDE:
• Presentation
• Visual and scripts
• Storyboards
• Team presentations
• Verbal presentation
• Video
• Visuals
POTENTIAL PROBLEMS AND CONSIDERATIONS
Presentation:
• It is important to consider your target audience and which form or
method of delivery works best.
Visual and scripts:
• These are subjective and therefore may not be clear to everyone.
Are they out of context?
Storyboards:
• It is important to get the sequence right and make sure the images
are displayed in the correct format i.e. not upside down!
MORE POTENTIAL PROBLEMS AND CONSIDERATIONS
Team presentations:
• Knows your role and where that fits with others in the group.
Rehearse so that transitions are less awkward and make sure you
have the right equipment and materials.
Verbal presentation:
• The presenter must be able to project their voice, speak clearly
and vary their intonation to keep interest.
Video:
• Out of date video is the worst thing to use! Sound distortion and
the video simply not working are also potential problems to be
aware of.
ADDITIONAL PRESENTATION AIDS THAT MAY BE EMPLOYED AS PART OF YOUR STRATEGY:
• Case studies
• Demonstration/discussion
• Group and/or pair work
• Questioning
• Simulations and role-play
REPORT ON MARKET DATA
3.3. Report on analysis of market data to meet organisational requirements in terms of content, format, level of detail and scheduling
MEET ORGANISATIONAL REQUIREMENTS FOR ANALYSIS OF MARKET DATA
Organisational requirements will be specific to each
organisation but would likely include specifications or
standards to:
• Ensure document templates, reports and presentations meet
organisational requirements for style and layout which will
enhance readability and appearance.
CONTENT
• In order for you or others to make recommendations based on the
content of the report, it is important that the content is accurate,
timely, valid and reliable.
ABSTRACT/EXECUTIVE SUMMARY
• Once the body of the report is written, write an abstract.
• The abstract (also known as the Executive Summary) is a concise
summary of the essential elements of the report, from the
introduction through to and including the recommendations.
• It should be independent (can be read on its own), comprehensive
(covers all the main points) and clear and concise.
• As a general rule it should be short, only 10-15% of the length of
the report, and should be written in full sentences and paragraphs.
TABLE OF CONTENTS
• The table of contents shows the section titles, major headings
listed in order of appearance and indicates page locations.
Standard page numbering begins with the Introduction. The
Abstract or Executive Summary is usually numbered with lower
case Roman numerals (i, ii, iii, iv, etc).
FORMAT
• Reports vary in design and format according to their function, use
and standards set by the organisation.
• In the context of reporting on analysis of market data the format
required would be both informational and analytical and may be
informal or formal.
• Informal reports are usually short and presented as conventional
letters or memos containing the relevant information.
• Formal reports are usually longer and present complex information
in a clear and recognisable format.
LEVEL OF DETAIL
Is it:
• Appropriate to its purpose?
• Accurate?
• Logical?
• Clear and concise?
• Well organised with clear
sections headings?
STRUCTURE
Your reporting structure will determine the scope and level of
detail required such as:
• Length
• Layout
• Structure
• Headings
• Recommendations and plan of action.
CONCLUSION
• Conclusions are drawn from evidence, analysis, interpretation and
evaluation presented in the discussion.
• Conclusions should follow logically from the discussion.
• The conclusions section should give:
o key points;
o main findings
RECOMMENDATION
The recommendation section (when used - not all reports give
recommendations) should present your informed opinions,
suggestions, possible actions to be taken, applications and
recommendations arising from a rational consideration of the
discussion and conclusions.
It is important to be:
• definite
• perceptive
• imaginative
• rational
CONGRATULATIONS!
You have now finished the unit…
‘Interpret market trends and developments’