Compare and contrast the four key types of marketing analytics: descriptive, diagnostic, predictive, and prescriptive.

Question

What will be an ideal response?

Answer 1

An approach using descriptive analytics utilizes data to provide summary insights. Data in raw form is transformed into measures that provide insight into the past and hopefully a basis for further explorations of the data.

An approach using diagnostic analytics utilizes data to explore the relationships between different marketing-relevant factors that influence the organization's performance either directly or indirectly. There is significant value in understanding how marketing-relevant factors (for example, advertising frequency, advertisement placement, or product pricing) that can be influenced or controlled by the marketing managers can influence important firm outcomes such as product sales or customer satisfaction scores. Diagnostic analytics provide insights into the relationships of different factors with the implication being that an understanding of their relationships can have value for future marketing decisions.

An approach using predictive analytics utilizes data to make predictions about future marketing outcomes of interest. Predictive analytics can be divided into those that use historical measurements of the outcome of interest to determine a pattern that can be extrapolated in the future, and those that make predictions based on the examination of relationships between a set of factors and an outcome of interest that the factors are believed to influence. The value of predictive analytics stems from its ability to help provide greater clarity into the impact that changes that are expected to occur in different marketing-relevant factors may have on related marketing outcomes.

An approach using prescriptive analytics involves determining the optimal level of marketing-relevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes.