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TSR Wiki > Study Help > Subjects and Revision > Revision Notes > Business Studies > AQA A2 Business Studies Unit 4 - Marketing Maths

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In order to have a successful marketing strategy it is normally important to have diagrams graphs and calculations of various figures in order to present a convincing argument for the cause. These are the basic principles behind marketing maths:

Contents 1 Correlation 2 Index Numbers 3 Moving Averages 4 Also See 5 Comments

Correlation

Correlation - the relationship between two variables. The stronger the correlation the more a change in one will effect the other variable. Two variables that would be strongly linked would be sales and profit levels. Variables with weak correlation could be shoe size of employees and length of time remaining at business.

However, there are always more than two variables that are linked therefore a prediction of one variable on the level of another will never to totally accurate. The best way of predicting is by using a Line of Best Fit which is a line that gives an approximation of the 2 variables.

Sometimes it is wished to find data for the future that is not already known. This is called extrapolation. This is where the line of best fit is extended further along the timescale and a prediction of a variable made from it. However, this is not usually an accurate prediction due to possible unknown influences.

Index Numbers

This is where the sales (or any other figure) for a particular year is regarded as 100 points. If the sales of next year are 10% higher then it is 110.If the sales 5 years alter are 5% down on the base year (the year at 100) then it is 95. This does not give a figure for how many widgets were sold, just a figure of the percentage in comparison to the base year.

Moving Averages

This is the average over a period of time. May be the average sales figures over three years. Each year the average will changes and these can be plotted on a scatter graph to show growth over time. If you average out 2, 3 year moving averages then a 6 year moving average is created.

Marketing maths is most useful in sales forecasting, an important tool in creating and deciding on marketing planning and budgeting as well as predicting staff usage etc therefore it is important to understand these concepts.

Also See

Read these other AQA A2 Business Studies Unit 4 revision notes:

• Privatisation
• SWOT Analysis of the UK
• Balance Sheets
• Limitations of Accounts
• Profit and Loss Accounts
• Revenue and Capital Expenditure
• Market Analysis and Decision Making
• Marketing Maths
• Marketing Objectives and Decision Making
• Marketing Budgets
• Corporate Planning
• Management of Change
• Invention, Innovation and Design
• Network and Critical Path Analysis
• Business and the Law
• Employee Participation
• Human Resource Management
• Performance Measurement

Comments

These notes are aimed at people studying for AQA A2 Business Studies Unit 4, but will also be suitable for other courses and exam boards.

Originally submitted by eksman on TSR Forums.