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’