Interpreting marketing data

16.1 Correlation

Businesses are always keen to learn about the effect of marketing strategies on sales. Often researchers will compare sales volume and advertising expenditure. A good way to do this is on a graph. 

What the researcher is looking for is cause and effec, namely evidence that the advertising has caused an increase in sales. Correlation itself does not indicate cause and effect. Strong correlationis evidence that cause and effect may be present.

16.2 Understanding extrapolation

Extrapolation means projecting a trend forward in order to make a forecast of what will happen in the future. The simplest way of predicting the future is to assume that it will be just like the past. For the immediate future this may be realistic. It is unlikely that the economy or…

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