Market analysis

Question 1

Types of data (2)

Answer 1

1. Quantitive
2. Qualitative

Question 2

Market mapping -

Answer 2

• analyses the market conditions to identify the position of one product or brand relative to others in the market of the given criteria

Question 3

Interpreting market data (3)

Answer 3

1. Correlation
2. Extrapolation
3. Confidence intervals

Question 4

Correlation -

Answer 4

• when there is an apparent relationship between one factor and another

Question 5

Correlation (3)

Answer 5

1. Negative correlation - one factor goes up, the other goes down
2. Positive correlation - 2 factors move in the same direction
3. If the correlation is 0 then there is no apparent relationship between the factor and demand

Question 6

Strength of correlation (3)

Answer 6

1. -1 = perfect negative correlation
2. 0 = no correlation
3. +1 = perfect positive correlation

Question 7

Correlation…

Answer 7

…does not prove that one factor leads to the other

Question 8

Extrapolation -

Answer 8

• one method of forecasting the sales to look at what has been happening in the past and continue this trend into the future

Question 9

When extrapolation is valid? (2)

Answer 9

1. Valid if conditions don’t change
2. However, in many markets there is sometimes a disruptive change that alters market conditions significantly and makes extrapolation of limited value

Question 10

Confidence level -

Answer 10

• the probability that the research findings are correct

Question 11

Confidence intervals -

Answer 11

• the possible range of outcomes for a given confidence level

Question 12

Degree of confidence level will depend on (3)

Answer 12

1. The size of the sample: the bigger the sample of population the more accurate are the findings
2. How the sample was constructed: randomisation etc
3. Margin of error that the researches will provide (confidence interval)

Question 13

Confidence intervals outcomes (2)

Answer 13

=> to be more confident of the forecast the the wider the confidence interval will be
=> the narrower the range of possible outcomes the lower the confidence level

Question 14

Market size by volume -

Answer 14

• measures the amount of goods sold by quantity

Question 15

Market size by value -

Answer 15

• the total revenue generated by the sales of all products and services in a given market

Question 16

Market growth - (+formula)

Answer 16

• is the percentage change in the total sales in the market over a given period
  = (percent / 100) * the number

Question 17

Index number -

Answer 17

• a mathematical device which tracks changes in a number from a starting point