Statistics is a branch of applied mathematics that collects and organizes data to interpret and predict future behavior or results. Almost every industry uses statistics, including insurance, consumer products, retail, pharmaceuticals and even the federal government. Statistics are important for a number of reasons and can be used for various purposes.
The government uses statistics to measure ongoing economic indicators that greatly affect business and industry. For example, tracking the gross domestic product, or GDP, determines quarterly increases or decreases in business and industry expenditure. Productivity, expenditures on durable goods, retail sales and unemployment statistics help the government determine if there is an impending recession on the horizon or if economic conditions are improving.
Companies can use statistics to measure market share and market potential, the percent of the market they hold in dollars, and the total amount of dollars and units sold in their industries. They can then use these current statistics to examine and develop marketing strategies to increase their market share.
Marketing Research Statistics
Statistics are a core component of marketing research techniques. Companies use marketing research agencies to conduct quantitative research with consumers to evaluate new and existing products. Developing models from these statistics can show the potential trial, usage and success of these products.
Sales Forecasting Statistics
Statistics help companies develop sales forecasts one, two and even five years into the future. Companies can then modify or improve their products, hire additional sales reps and put the necessary resources in place to meet these targets. Sales forecasting statistics are also a useful tool in business and marketing plan development.
Life insurance companies rely on statistics to assess whether to give coverage and how much to charge. Actuaries plug in massive amounts of data to evaluate the likelihood of a person getting illnesses or injuries based on factors such as age and occupation. Life expectancy statistics help determine the cost of life insurance premiums.
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