Rafael Aleman MKTG353 October 25, 2012 Notes Remember from last class: At end of this week she

will be sending the study guide You will be tested how to do sales goal for new product in new market Practice Orange. Hands on using Excel no substitute for practice If youre not getting the same answers as her make sure you go to her office to review. November 3 Product Camp Extra Credit. Attend Lectures. Reason you get BPI is how to allocate marketing resources Budget, marketing budget, advertisisng budget, sales reps and resource allocation Buying Power Index good marketing can exceeed marketing demand How can you come up with the importance weight? BPI- REG.xls You had to find market demand and find info on Census: Population, income and retail sales. We worked on it last week. You must practice to recall immediately Affect Product and its sales Population % Income % Retail Sales %

X1 X2 X3

Product Sales

Y Actual Sales

Time affects Sales X Y

In exam you have to first find your X variable and Y variable Dara Data Analuysi Regresision

Reading material about this part (Summary Output) Sales planning and forecasting on Page 3 and page 6 Read for the Final Exams Multiple R R Square (Multiple R squared)

Proportion that the variables are responsible for change in sales (Pop %, Income and retail sales). Its a good model since its 99.28% (0.992876)

ANOVA Analysis of Variance We focus on column F (Significance F= 0.01066712) 1% chance that none of these factors affect the sales of Y. That 1% is wrong, so model is good. The importance is the coefficients. What does a 1 in column E mean? 1 percent of the total population What does 28.91 mean in the Actual Sales? 1 means $1,000 in sales 1% increase of total pop will increase the sales by 28.91*($1,000)= $28,910 1% increase in income of total market will decrease the total of our product by -2.107*(1,000)= $2,107 1% increase in retail sales of total market will decrease the sales of our product by -$11,035= -11.035*(1,000) When peoples condition improve they buy something else so this is an inferior good. Example: Some students drive a Honda Civic and when they make more money they will get an Audi, Honda is not an inferior product but people buy higher with more income. There are more stores in South Coast Plaza than in Mihaylo hall so a sausage sandwich will not be as appealing.

The size of coefficient shows how large the impact is. Population is the most important, the second is retail and last is income. Coefficient 29 2 11 42 Weight based on factors

100%

What does the p-value of 0.35313 mean? It means 35% chance that population has no effect on sales.

Now look at income, 85% chance that income has no effect on sales of product 0.732498034 = 73% chances that retail % has no effect on our sales. When p-value is too high (above 5%) we can make sample size bigger. It will minimize the effect of info 15 for every one factor. How can you get more data points? You can add more counties, and cities. This will make model very stable. 45 will be really good (15 per each 1, 15*3) Copy and paste

What graph do we use when the information is not related? What did we learn from exercise What does the coefficient mean The importance weight We also learned regression predicted sales We can compare absolute percentage error We can compare historical accuracy. What is the cyclical pattern The short term forecasting Next week: Align marketing and the performance measure of align marketing.