Chapter 1 - Fundamental of Business analytics

Analytics – is the exploration of extensive and diverse data.

Analyst – is a skilled professional who gathers, processes, and statistically analyses extensive

data sets.

Athena – goddess of wisdom.

Census – Manual data collection involve handwritten records.

Telegraph and postal communication – communication of data or request for data often

involved telegraph or postal services.

Modern Data Gathering - In the modern era, obtaining data has significantly evolved with

the advent of technology and the proliferation of digital platforms. People started using

computers, which are relatively better and unbiased when it comes to new forms and large

volumes of data.

Software as service - Delivers software via the internet on a subscription basis, accessible

through web browsers without local installation.

Chapter 2 – Statistics

Statistics or “status” – is when we start using math concepts to work on real-life data.

Ronald fisher – Father of modern Statistics and Experimental design.

Descriptive analytics (pre-1960s to 1980s) - Entails gathering, consolidating, and analysing

historical data.

Early Data Processing and Decision support (1960s to 1980s) - utilizing computers to

handle and store increased quantities of data

Data warehousing and OLAP (1980s to 1990s) - Created to consolidate and house

substantial amounts of organized data.

Online Analytical Processing (OLAP) - tools enabled expedited and highly interactive

reporting through multidimensional analysis.

Advanced Analytics and data Mining (1990s to early 2000s) – Gained traction by

employing data mining, clustering, regression, and neural networks to derive valuable

insights from data.

Big Data Analytics (mid-2000s to early 2010s) - The surge in data driven by the internet,

social media, and digital advancements spurred the creation of tools and methods to process,

analyze, and extract insights from vast and varied datasets.

Predictive Analytics and Machine Learning (mid-2010s to present) - Advanced through

the incorporation of machine learning algorithms, enabling predictive analysis of future

trends and outcomes using historical data.

Prescriptive and Ai-Powers Analytics (late 2010 to present) - Forecasting results and

suggesting actions to attain desired goals.

Real-Time Analytics and Edge Computing (present and future) - Enabling swift decision-

making.

Types of Business Analytics

Descriptive Analytics – Summarize historical information, answering questions like what

happened? When, where, and how often did it happen?

Predictive Analytics – Forecast outcomes, answering questions like what will happen if I do

this?

Prescriptive Analytics – Recommends actions and answers questions like What can I do to

maximize revenue from this?

Decision Analytics – Facilitates human decision making by utilizing visual analytics that

represent the user’s models reflecting their thought process and reasoning.

Resource allocation – is the optimal level a company spends on each of its marketing levers

to maximize success.

Resource Allocation: Four Steps

Determine the objective metric - Develop a function - Employ marketing analytics –

Reverse the process.

Step 1: Determine the Objective

- The first step in resource allocation is to determine the objective metric. The company

need to set a goal such as maximizing the profits or improve brand awareness.
Step 2: Develop a Function

- The second step is to connect the firm’ marketing input to its resource allocation

objective metrics.

Step 3: Employ Marketing Analytics or Parameter Estimation

- A common method for identifying these weights is to build an econometric, or

regression model.

- The process of finding the value of a and b is called parameter estimation.

Step 4: Reverse the Process

- Last step of the resource allocation process is to keep the parameter identified in step

3 fixed and reserve step 1-3 to identify the optimal value of the marketing inputs and

maximize the objective metric.

Measuring ROI – is to determine the effectiveness of a company’s various marketing

strategies, or its marketing mix.

Financial ROI – is equal to profit over investment value; it is a yearly average rate,

comparable to rate of return.

Marketing ROI or Marginal ROI – is equal to profits related to marketing measure divided

by the value of the marketing investment which I actually money risked not invested.

Incremental Sales – refers to an increase in sales as a result of marketing measures.

Chapter 3 - Clustering

Cluster Analysis or Clustering – a technique used in data analysis and machine learning.

Segmentation – a way of organizing customers into groups with similar traits.

Clustering – a broader analytical technique used in various domains to identify patters and

grouping in data.

Likert-Scale - is a frequently employed psychometric measurement tool for evaluating

individuals ' attitudes, opinions, perceptions, or behaviors.

Cluster Analysis Goal - measures of similarity between customers, such as (a) correlation

coefficients and (b) distance measures.

Correlational coefficients - Measure the association between two variables.

Distance measures - measures of the difference between two customers on the variables used

for segmentation.
Step in cluster Analysis

- Formulate the problem.

- Compute distance between customers along the selected variables.

- Apply the clustering procedures to the distance measure.

- Decide on the number of clusters.

- Profit clusters.

Step 1: Formulate the Problem

- select the variables that you wish to use as the basis for clustering. Those variables

determine how well your segmentation works in terms of marketing.

Step 2: Compute the Distance

- is a measure of distance between individuals who are being clustered.

Step 3: Apply the clustering procedures.

- K-means clustering is one of the more popular algorithms used for clustering, and it is

gaining even more popularity with the growth of machine learning.

Step 4: Decide on number of clusters.

- A commonly used method to determine the optimal k is the “elbow criterion.”

Step 5: Profile clusters

- Profiling clusters means describing them in terms of the variables used for

clustering—or in terms of additional data, such as demographics.

Chapter 4 - Marketing Optimization

Marketing Optimization – involes enhancing your approuch to meet your business

objective.

Web Analysis – allows maketers to collect session-level information about interaction on a

website.

Cookies – a small snippet of code that monitors a user’s online activities.

Portolio Analysis – involes evaluating each product individually regarding its profitability

and contribution to the company earning and potential growth.

BCG Matrix – Developed by Boston Consulting Group, Serves as toll for long term

stratigic planning.

Market Share

Dogs – Low Market share, Low Market growth

Cash Cows – High Market share, Low Market growth

Question Marks – Low Market, High Market growth

Stars - High Market share, High Market growth

Risk analytics - involves recognizing and assessing potential issues that could adversely

affect crucial business endeavors or projects.

5x5 Risk Assessment Matrix - utilizes a color-coded chart to display different risk levels,

with red indicating high risks, orange or yellow for moderate risks, and green for low risks.

Severity – the first axis of a risk assessment and it measure the amount of damage could

create.

Probability – the second axis in matrix and it measures the likelihood of the hazard occuring.

Chapter 5 – Population and Samples

Population - includes all of the entities of interest in a study.

Data sets – a rectangular array of data.

Variables – characteristics of members.

Observation – raw information collection during a study.

Numerical - a consists of numbers and represents measurable quantities.

- continuous data and discrete data.

Categorical data - cannot be measured in the same way as numerical data.

Measure of central tendency

Mean – average of all values.

Median – middels observation.

Mode – value appears most often.