Inferential or descriptive statistics are often used by marketing professional to take important marketing decisions. Effective marketing strategies can open new opportunities for small businesses and can provide a secure place in the market competing against powerful businesses with high budgets. Therefore, it is crucial for a marketer to understand the concept of dependent and independent variables.
The understanding of these variables will help you provide you with a top-level view of different elements of marketing research. A marketer should know when and how to use the relationship between the dependent and independent variable to measure the success of various marketing strategies.
Employing different market strategies require investments and investments in any business is subjected to financial risks. Having the knowledge and understanding of the marketing variables helps a marketer to reduce the risks of marketing investments.
A marketer can adopt various methods like a survey or focus group or limited product launch or the data on the performance of products already in the market to understand and evaluate what elements impact the marketing outcomes. Before making any investment, a marketer should assess different variables possible to get insights on how your marketing strategies would work.
Dependent and independent variables are crucial for such measurement. They will provide you with insights and scientific methods to use various strategies and tactics to get maximum positive outputs.
1) Dependent Type of Variables
This type of variables cannot be controlled. One can see direct impacts of independent variables on dependent variables, because of this reason they are also referred to as response variables. The elements like sales growth, sales revenue, an average size of transactions, new customer inquiries, and same-store repeat sales are examples of dependent variables.
The results of dependent variables reveal whether certain marketing strategies worked or not, and which marketing strategy produced better results and which marketing strategy was a fail. This analysis enables companies to invest more in certain strategies which got huge profits to them. Assess dependent variables that have influenced your marketing goals hugely.
2) Independent Type of variables
This type of variables is controllable in nature. Marketer uses these variables to manipulate the dependent variable to gauge the change. The elements like price, promotion style, product, and place are a few examples of independent variables because these elements can be modified by a marketer at any point in time. A precise amalgamation of values of various independent variables is used to augment the output of dependent variables. You can make changes in any number of independent variables to identify unexpected impacts and interrelationships between them.
To measure the impacts of independent variables on a certain dependent variable, change in one independent variable at a time to get the clearer picture of impacts of each independent variable on the outputs of dependent variables. There can be one dependent variable and many independent variables. For example, sale revenue of a product is the dependent variable and price, promotion, and place are independent variables. The change in any of these independent variables will influence the dependent variable that is sales revenue.
Measurement of the strength of a dependent variable and an independent variable
Regression analysis, a statistical tool is used by marketing researchers to find out the strength of the relationship between an independent and dependent variable. Let’s understand this analysis with the help of an example of the sale of a deodorant. For example, a store can set various independent variables like base price, time of the day, and discount for the sale of a deodorant.
This is done not only to determine the direct impacts on the sale of deodorant but to determine the strength of the relationship between both variables such as if the price of the deodorant is low discount provided don’t affect the sales of the deodorant much. However, if the price of the deodorant is high sales of the deodorant increased rapidly after availing discount.
How to select the right variable?
Choosing the right variable is very important to see the change in the sales of a product. An independent variable like discount may work for a product and does not work for others. Besides this, having a specific dependent variable is also important to measure the impacts. For example, the sales of a single smartphone rather than the sales of all smartphone models sold by a company. The more your dependent variable is specific the more chance you have to get better outcomes after altering an independent variable.
The benefit of doing this is that you can find out a strategy that works for the sale of a particular product without risking huge investment. even you can try different ways at a different time. For example, you can change the price of a product for a certain period of time to gauge the change in the sales, then change the price back as before to measure its impacts on the revenue generated. Similarly, various independent type of variables can be tested on a specific variable to measure their impacts on the sale of the product.