Question

How can marketing managers use regression model to generate insights on consumers' behavior?

Answer 1

Answer:

Here, we will talk about linear regression model because it is one of the most important tool which can be used to generate insights on consumers' behaviour. Linear regression is used to establish a relationship between two variables and how the change in one variable impacts the change in the other variable.
The dependent variable is the factor of interest, say- the sales of a product, its pricing etc whereas the independent variables are the standalone variables which which impact the dependent variables i.e. independent variables define the values for the dependent variables. They explain the factors which influence the dependent variables and also the degree of impact which can be calculated using the coefficients.
It is a strong statistical technique which can be used to generate insights on consumers' behavious, to understand business better by identifying better and profitable opportunities. It helps the company in making trend analysis and conduct forecasts. Say, if a company has seen a considerable increase in their sales over the last few months, then by using the linear regression model, it can forecast sales for future months.
Thus, the regression models, nowadays, have become of the most powerful techniques that are used to make forecasts and make trend analysis. Therefore, the managers should use it to their benefit to identify business opportunities and grab profitable opportunities.