Trend Analysis

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This document is a comprehensive checklist plan for companies that want to track emerging market trends that can affect their business. This plan analyzes time periods, geographic areas, population sizes, and future projections. This plan also provides sample mathematic formulas companies can use to analyze market trends. This plan is useful for small businesses or other entities that want to analyze emerging market trends in order to maximize company revenue.

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									This document is a comprehensive checklist plan for companies that want to track
emerging market trends that can affect their business. This plan analyzes time periods,
geographic areas, population sizes, and future projections. This plan also provides
sample mathematic formulas companies can use to analyze market trends. This plan is
useful for small businesses or other entities that want to analyze emerging market
trends in order to maximize company revenue.
                    Marketing Trend Analysis Checklist

Introduction

A trend analysis is a process by which information is gathered and analyzed to identify
meaningful patterns or trends. Trend analysis is used not only to predict future events, but also
to understand events of the past.

Trend analysis is most commonly used to monitor, forecast, and evaluate rates of occurrences
and or values associated with a particular event.

In the context of business planning, strategy, and development, trend analysis focuses on key
variables affecting markets and market segments which include:

      Consumer Behavior Patterns
      Populations
      Sales Growth
      Geographical Regions
      Product Demand
      Technological Developments




Why do a market trend analysis?
The main goal of trend analysis is to understand how and why variables or values change over
time, and how quickly or slowly the increase or decrease occurs.

Market trend analysis is useful for finding answers and strategies that address the following
questions:

      What are projected sales revenues?
      Which markets have the highest growth?
      Should we change our marketing plan?
      Should we target a new market?
      Should we stop manufacturing XYZ product?
      How are technological advancements affecting the way we do business?
      Where should we concentrate our sales and marketing efforts?


The study of time trends and its impact on a variable, value or event is also very important to a
market trend analysis. Examples of specific time trend analysis include the following:




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                     Marketing Trend Analysis Checklist

        Time Period Comparison - Compares a variable before and after a specific event. A
         time series analysis is often used to interpret the results or outcome.

        Geographic Area Comparison - Compares a variable or an event across
         geographical areas, over a period of time.

        Population Comparison - Compares a variable or event across various populations, over
         a period of time.

        Future projections - Future projections, based on a specific time span, serve as a means
         to monitoring progress toward an objective and for estimating the rate or values of a
         future occurrence. This can assist with business planning activities and/or the
         identification of new strategies or opportunities.




Collecting the Data
To prepare a sound and useful marketing trend analysis, it is imperative that you have a clear
understanding of what trends are going to be analyzed and what information needs to be
obtained.

Start by listing the WHO, WHAT, WHY, WHEN, WHERE and HOW of the scenario you
wish to analyze.

For example,

Company ABC wants to determine the global annual sales growth rate (in terms of dollars and
percentage) for its existing products over the past four years, in order to ensure its marketing and
sales strategies are in sync, determine and to identify opportunities to increase sales in the future.

Who:            Company ABC

What:           Global Product Sales Growth

Why:            To ensure marketing and sales strategies are in sync and to identify opportunities
                to increase sales.

When:           2007 – 2010

Where:          Global

How:            Accessing internal company sales reports and summarizing the findings in a chart.




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                    Marketing Trend Analysis Checklist

The chart below captures the Global Annual Product Sales from 2007 - 2010 for ABC Company.
This collection of sales data is the starting point for determining the global product sales growth
rate (in terms of dollars and percentages) and for meeting the company’s objective: to ensure
marketing/sales strategies are in sync, as well as identify opportunities to increase sales.

ABC Company Global Sales by Product, 2007 - 2010
Global Sales                2007               2008                2009                2010

Product A                $250,000            $300,000            $298,000            $315,000

Product B                $155,000            $165,000            $165,000            $160,000

Product C                $139,000            $103,000             $36,000             $45,000

Product D                 $15,000             $50,000             $75,000             $90,000

Product E                 $50,000             $50,000             $50,000             $50,000




Analyzing the Data
Once you have gathered the necessary data and summarized it in a chart or table, the next step is
to analyze it. The strategy used to analyze trend data will depend in part on the purpose of the
analysis itself, its complexity, and the number of variables or factors being considered.

There are many ways that the data may be analyzed:

      Conceptual Framework
      Tables
      Graphs
      Statistical Analysis
      Linear equations
      Formulas and Calculations




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                   Marketing Trend Analysis Checklist

Per c enta ge C ha n ge
One of the most commonly used and straightforward measures for analyzing data and identifying
trends is the percentage of change calculation. This calculation compares the change between
two variables using the following formula:

                                                 Y2 – Y1
                       % change =                  Y1
For example, to calculate the percent change for Product A Sales from 2007 to 2008:


                                     Product A Sales 2008 – Product A Sales 2007
                  % change =
                                                Product A Sales 2007




                                                $300,000 – $250,000
                            % change =               $250,000




                                                        $50,000
                            % change =                 $250,000


                            % change =                    20%



Calculation of Percentage Change from 2007 - 2008
Global Sales              2008               2007                   Dollar         % Change
                                                             Increase/(Decrease)

Product A              $300,000           $250,000                     $50,000         20%

Product B              $165,000           $155,000                     $10,000        6.5%

Product C              $103,000           $139,000                     $-36,000       -25.9%

Product D               $50,000            $15,000                     $35,000        233%

Product E               $50,000            $50,000                       $0               0%




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                             Marketing Trend Analysis Checklist

Based on the % change calculation, the 2007 - 2010 sales growth rate for ABC Company has
been calculated and captured in the chart below.

           Sales Growth Rate from 2007 - 2010
                                                                 2007              2008               2009               2010
            Historical Data
               Product A                                     $250,000           $300,000          $298,000           $315,000
               Product B                                     $155,000           $165,000          $165,000           $160,000
               Product C                                     $139,000           $103,000           $36,000            $45,000
               Product D                                      $15,000            $50,000           $75,000            $90,000
               Product E                                      $50,000            $50,000           $50,000            $50,000
            Sales Growth Rate
               Product A                                           0                20%               -.7%              5.7%
               Product B                                           0               6.5%                0%                -3%
               Product C                                           0              -25.9%              -65%               25%
               Product D                                           0             233.3%               50%                20%
               Product E                                           0                  0                 0                  0

Please note: The % change calculation is from year to year. For example, the sales growth rate for Product A of 20% in 2008 is based on the
change from 2007 to 2008. Likewise, the sales growth rate for Product C of 25% in 2010 is based on the change from 2009 to 2010.

Sales Growth Rate Analysis:
Based on the sales growth rate analysis by product for ABC Company, it is apparent that:

               Product C’s sales have dropped substantially, over the three year period, particularly
                from 2008 to 2009.

               Product E has experienced zero sales growth over the three year period.

ABC Company should consider looking further into these products to see if:

               More marketing efforts are needed

               There are product performance issues that can be addressed

               The products needs to be modified, re-engineered or discontinued




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                       Marketing Trend Analysis Checklist

T r end Per c enta ges
A trend percentage calculation is used to analyze data over an extended period of time and
considers the earliest point in time as the baseline. The base year always equals 100.0%.

In the following example, 2007 is the base year. The percentages for the subsequent years are
calculated by dividing each amount in a particular year by the corresponding amount in the base
year, and then multiplying by 100.


                        Trend % =             20XX Value            X 100
                                             Baseline Value


       Trend Percentages from 2007 - 2010
                                            2007        2008        2009        2010
       Historical Data                    Baseline
           Product A                      $250,000    $300,000    $298,000    $315,000
           Product B                      $155,000    $165,000    $165,000    $160,000
           Product C                      $139,000    $103,000    $36,000     $45,000
           Product D                      $15,000      $50,000    $75,000     $90,000
           Product E                      $50,000      $50,000    $50,000     $50,000
       Trend Percentages                  Baseline
           Product A                        100.0        120        119.2        126
           Product B                        100.0       113.5       103.5       105.7
           Product C                        100.0        74.1       25.9        32.4
           Product D                        100.0       333.3       500          600
           Product E                        100.0       100.0       100.0       100.0


   Please note:

           Trend percentage values greater than 100% = increase from baseline year.

           Trend percentage values less than 100% = decrease from baseline year.

           Trend percentage baselines cannot be equal to zero.




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                   Marketing Trend Analysis Checklist


T r e n d P e r c en t a g e A n a l y s i s :
From the trend percentage analysis, it is clear that Product D sales have increased by 600% over
the three year period. This is a substantial increase and may have implications for continued
rapid growth. ABC Company may consider:

      Introducing the product to a new market

      Creating a similar product to introduce to the same market

      Understanding the key drivers of the sales growth.



Conclusion
After completing a market trend analysis you should be able to:

            Better understand the trends of the variables and values being considered and how
             they impact you.

            Make sound and well informed decisions about the subject matter.

            Draw conclusions and identify new opportunities.

            Proactively respond to the market.

            Predict future values or outcomes with more accuracy.

            Understand past events and the impact they might have on the future.

            Monitor progress towards an objective




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                            Marketing Trend Analysis Checklist

								
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