3.2e Extrapolation Flashcards
Three statistical techniques used in interpretation of marketing data
- Extrapolation
- Correlation
- Confidence intervals
What do confidence intervals assess?
Reliability of sampled data
What is used to show the accuracy in confidence intervals?
A plus or minus figure
In what form is market research quoted?
In a range
E.g. Jersey pottery - people will buy a product 36% - BUT it may not accurately reflect the whole population, so a result may have a confidence interval of + or - 4. Conclusion - between 32% and 40% of the population will buy the product.
Factors that influence confidence intervals
- Sample size
- Population size
- Percentage of sample choosing a particular answer
Trend definition
An pattern of change within a set of numerical data
What does trend analysis examine?
The pattern of historic data and assumes this pattern will continue in the future
Extrapolation definition
Using previous patterns of numerical data in order to predict values in the future
Advantages of extrapolation
- Simple method
- Not much data required
- Quick and cheap
- Set targets
Disadvantages of extrapolation
- Unreliable
- Assumes past trend will continue into future
- Ignores qualitative factors (change in fashion etc)
How is quarterly moving average calculated?
By adding the latest four quarters of sales and then dividing by four
Time series analysis is used for what?
To reveal underlying patterns by recording and plotting data over time
