Business Studies

Define descriptive statistics. What is the value of predictive data analysis to market researchers? Provide an example of a predictive data analysis technique and how it is used to predict future events.

ANSWER

Descriptive Statistics

These are brief descriptive coefficients used in analyzing and summarizing any given data (George & Marlley, 2016). This data, for instance, can be a description of a portion of the entire part of the population. There are two main parts of descriptive statistics; central tendency and measures of variability. The central tendency used in descriptive statistics includes mean mode and median. On the other hand, the measures of variability (spread) include variance, standard deviation, minimum and maximum variables, among others. Basically, descriptive statistics uses central tendency and measures of variability to describe the features and characteristics of any data.

Consequently, descriptive statistics is used in marketing research to analyze data on different demographics concerning a particular product or service (George & Marlley, 2016). For instance, if an organization seeks to understand the positive and negative perceptions of a company, descriptive data will be used to summarize the responses gathered. These responses can be summarized in the form of means scores, charts, averages, and percentages, and it is a clear, accurate, and descriptive way of gathering data. Descriptive data is also used to simplify large data gathered from a marketing research. For instance, an organization may want to gather the responses of a potential market with the introduction of a new product. With possible responses of over 1000, descriptive statistics is used to summarize all the responses of the study.

Descriptive statistics is also used to predict future events (George & Marlley, 2016). The selling performance of a product can be analyzed by looking at the annual financial report over a period of five years. The data can be analyzed using descriptive data to ascertain the performance of the product in question. If the performance is either positive or negative, the company can predict whether the product will continue to sell or stall.

References

George, D., & Mallery, P. (2016). Descriptive statistics. In IBM SPSS statistics 23 step by step (pp. 126-134). Routledge.