Everyone is talking about Artificial intelligence, machine learning and data analytics. Technology geeks would be interested in these words, what a student pursuing distance MBA in marketing management has to do with them. You may have liking in sales and marketing and aspire to do a great career, then it is important for you to understand this terminology, its impact on your profession and see its amazing and astonishing applications about predicting the future.
Analytics and Predicting Future
Let us understand what this analytics is all about. Analytics is about analyzing, processing data to generate insights or intelligence from the data. There are various forms of analytics based on what kind of insight is delivered.
It is analysis of past data or postmortem. However, it is important from point of view of understanding the pattern. This was done with the help of databases or simply even the Excel sheet. The question answered here is “what happened?”
For example, a company has marketing budget and it spends it on various marketing activities like newspaper advertisement, TV commercials, hoardings, public seminars, digital campaigns etc. At the end of the quarter or year, you will have money spent on each channel and the number of leads you acquired from it. Based on the analysis, you may decide to shift or reallocate your budget to say digital campaigns more for urban localities and newspaper advertising in rural areas.
Predictive analytics is more advanced. Here the past data is captured more like descriptive analytics, but the way of processing is different. This past data is used as “training data” for the software. The software algorithm takes this input data and creates what is called as “statistical model” based on probability theory. So if you have got success with certain combination of input parameters, what is the likelihood of future outcome be a success can be predicted using the model. Simply put the algorithm tries to find out the co-relation between input and output parameters.
Prescriptive analytics suggests best course of action. Here once the prediction are known, it advises the business on possible outcomes and actions so that probability of success increases.
In sales and marketing there is a concept of sales pipeline. These leads are scored with a software. The action is suggested based on the score of the lead. This allows sales team to focus on leads which are with higher possibility of conversion.
Use cases of marketing analytics for a distance MBA in marketing management
To understand the analytics, discussion on real business scenarios would be of quite a help. Here are some examples of use of analytics in domain of sales and marketing.
Each customer segment has different characteristics and demands. To earn better results, each of the segment should be targeted with right promotion, product or service. In predictive analytics, there are algorithms which can be used for creating/discovering different customer segments. They are called clustering algorithms. Based on various input parameters like age, sex, capacity to spend, order value, locality, and so on, these algorithms can discover various target customer segments for your business.
Collaborative filtering is used to recommend products or services or promotional campaigns to certain customers based on their characteristics which are provided as input data. The recommendation engine, based on the input training data provided, gives a recommendation that is most likely to be accepted by the customer. For example, movie recommendations by Netflix.
Market Basket Analysis
Market basket Analysis is modeling technique based on conditional probability. If you purchase certain item then you are more likely to purchase another item. For example, if you buy a notepad there are high chances that you may also buy a pen with it. This modelling technique is used by shopping malls to arrange their display of products in more lucrative way to improve customers propensity to buy.
Factor analysis is a technique mainly used for data reduction and summarization. In this technique large number of interrelated variables are examined and then are reduced to a few critical factors. For example, a research was conducted to identify what are the attributes which are important for a consumer when he/she selects a bank. All consumers where asked to rate 15 such attributes in the order of importance. Four factors which came out of this research were namely, traditional services, convenience, visibility and competence. By working on those, one of the prominent bank in USA became one of the largest banks.
Analytics and distance MBA in marketing management
Evident from above examples, the wave of adoption of artificial intelligence (AI) and Analytics has lot of potential to trigger innovative ways in marketing arena. As a student of distance MBA in marketing management one should have basic knowledge of analytics and more importantly its tools and applications. It is confirmed that this wave of analytics is going to change the course of all future businesses and so of the marketing. It is imperative for one to assimilate this and make its best use for propelling your career.