A2 MARKET ANALYSIS

Introduction

Marketing can be seen as the

identifying, satisfying and revisiting
of customer needs. To achieve this
businesses can benefit from market
analysis to keep alert of changes in
the market place and the pending
opportunities and threats.
 MARKET ANALYSIS

Market Analysis
Asset Led
Market Led
Numerate Techniques
Correlation
Moving Averages
Extrapolation
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 Market Analysis

There are 2 different

approaches to marketing
depending upon whether Asset Led
a firm is looking primarily These are called
internally at is own
Market Led
strengths or externally at
the market place

Asset Led whilst maintaining an awareness of consumer needs and the market
strengths
place focuses largely on the firms’___________

Market Led focuses on the needs and wants of consumers, actions of

competitors and trends in the market place
___________

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 Market Analysis – Asset Led

What might the

strengths of a
business
Its Reputation – include?
quality, customer
care
Contacts –
customers and
suppliers
Intangible Assets
i.e. Brand Loyalty
Expertise –
management and
Tangible Assets technical
i.e. Specialist
Equipment
 Asset Led
These internal factors (strengths) form an integral part to a firm’s
marketing strategy

Advantages Disadvantages
 Encourages X Requires an ability to
Innovation based List 2 identify genuine
upon expertise in advantages strengths without bias
a said field & X Strengths may not
 Allows a firm to 2 disadvantages match with current
build upon to this trends
experience and approach
areas of existing to marketing
expertise

The firm must carry out a full audit of itself as well as researching into the market

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 Market Led

How can a firm

research into the Market
market? intelligence i.e.
Mintel
Primary
research -
customers

Statistical
analysis i.e.
demographics

(sw)OT
analysis
Competitor
scan and
analysis
 Market Led
The firm’s marketing strategy is heavily influenced by external factors

Advantages Disadvantages

List 2
 Market knowledge X Can stifle creativity
advantages
should help and risk taking
&
guarantee demand X Requires a
2 disadvantages
 Ability to respond to to this substantial budget
changes in the approach and time investment
market quickly to marketing (opportunity cost)

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 Numerate Techniques
When analysing the market place firms are likely to look at past data,
there are a number of numerate techniques they can use to aid such
analysis and help inform decision making:
 Establishes an underlying trend by smoothing out
Trends fluctuations
 Provides meaning to data by recognising
underlying patterns
Correlation  Shows the relationship between variables on a
scatter graph
 Assumes that the future is similar to the past
Extrapolation  A more scientific approach to analysing market
trends
 May show a positive, negative or zero relationship
Moving Averages  May identify a general decline / growth in a market
Match 2 of the bullet points over a period of time
on the right to each of the  Uses an established trend to predict the future
terms on the left.

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 Correlation
Helps to analyse the strength of a relationship between 2 variables

Zero Price of petrol and ice

cream sold
60

50

40
label monthly
Try toAverage
axis ice-cream
rainfall and
each set of
30

20
Negative levant
resales
10
60
to pr ov ide a
example
0
50
1 2 3 4 5 6 7 8 9 10

40

Discussion Point: 30

20
Average daily
It is also important to 10
temperature and ice-
consider causality
Identify whichand 0
1 2 3 4 5 6 7 8 9 10
cream sales
effect.
diagram shows Positive
If both a positive, 12

advertising 10

negative
expenditure and&sales 8

zero correlation
are increasing which one
6

is the cause and which 2

one the effect? 0

1 2 3 4 5 6 7 8 9 10

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 Moving Averages
A scientific approach to trend analysis that attempts to establish an underlying
long term trend by smoothing out fluctuations

Year Quarter Sales 4pt moving average 10+12+12+8 = 42

42/4 = 10.5
Year 1 Q1 10
Q2 12
Q3 12
Q4 8 10.5
12+12+8+11 = 43
43/4 = 10.75
Year 2 Q1 11 10.75
Q2 12
Q3 14
Q4 9
Year 3 Q1 12
Q2 14 Now you try the others
& plot these on a graph
Q3 14
Q4 8
 Moving Averages
Year Quarter Sales 4pt moving
average
Year 1 Q1 10
Q2 12
Q3 12
Q4 8 10.5
Year 2 Q1 11 10.75 Sales Year 1 to 3

16
Q2 12 10.75 14

Q3 14 11.25 12

10

Q4 9 11.5 Sales £m
Quarterly sales
8
Moving Average
6
Year 3 Q1 12 11.75 4

Q2 14 12.25 2

Q3 14 12.25 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Quarter
Q4 Q1 Q2 Q3 Q4

Q4 8 12

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 Extrapolation
Having established an underlying trend this can then be used to help predict the
future. This can be done by simply extending the line on a graph
This can help forecast future sales
Planning
How will this help inform other
production
functions within a business?
levels Financial
forecasting
and budget
setting

Human
Resource
Setting Management
marketing
objectives

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