In the recent past there have been growing interest for the E-commerce sector of business operations partly due to its non-geographical restrictions and also for its security and ability to reach a wide range of customers despite their location.
Consequently, the interest has brewed competition between old players and new entries into the business. Infinity company is an e-commerce company that specialized in supply of Electronic products as well as other major products. The company has a range of other products with reputable brands in clothes, household commodities, toys, and gadgets. The electronic line of goods dealt with are:
The recent concern of declining of sales expressed by the executive has bee attributed to new competition as well as shift in consumer preference across the business regions. The new development therefore prompts for new methods of business approaches, even better, the innovation and adoption of suitable business methods
For our analysis we need to:
To enable us explore all the aforementioned problems, we will use data classification to explore relationships and regression to predict sales, given new business practices.
The data for this study was obtained from the sales department and the financial records department for the past three years. The entries available from the data are as in:
Variable description |
Size |
Denotation/ measure |
Product |
1386 |
Ø Samsung electronics Ø Microsoft products (laptops and accessories) Ø LG appliances Ø Hp computer products and accessories Ø Sony Home entertainment products Ø AUCMA electronics Ø Apple mobile and computer appliances Ø Techno mobile phones and accessories |
Shipping method |
1386 |
Paid- P Free- F |
Sales recorded |
1386 |
AUS dollars |
Geographical region |
1386 |
Asia America Europe Australia Other parts |
Number of customers |
1386 |
unspecified |
Price of product |
1386 |
AUS dollars |
Customer type |
1386 |
New- N Existing- E |
Advertisement |
1386 |
AUS dollars |
For our classification method we employed logistic regression and explored the relationship between data variables. We use logistic regression in examining how sales are influenced by shipping methods, also how sales are spread across the marketing regions for the company. Moreover, we will determine the interrelationship between the independent variables and the response variable. According to an article on logistic regression by NCSS (2016), “Logistic regression analysis
studies the association between a categorical dependent variable and a set of independent (explanatory) variables.” We used linear regression for predictive modelling to predict the sales given different practices, for instance, how adoption of product promotion methods such use of more sales persons and advertisement would impact the sales recorded.
Use of forecasting in determining how different variables of interest are likely to play out following a positive or negative variation of the variables against a response variable will enable the company to near-accurately forecast on how the sales will be made if we adopt different marketing methods and exportation of given good. For instance through forecasting we determine how selling of related products together are likely to affect total sales.
Product |
Price (AUS dollars) |
Cost of Advertisement |
Customers |
Sales (AUS dollars) |
APPLE |
1335055 |
1318993 |
6086 |
3054878.0 |
AUCMA |
1614704 |
1566711 |
6839 |
3206451.0 |
HP |
8580 |
7363 |
29 |
5172.0 |
Hp |
1317170 |
1239529 |
6883 |
3570759.0 |
LG appliances |
1462941 |
1483838 |
7050 |
3327564.0 |
Microsoft electronics |
1364818 |
1293901 |
6653 |
3281120.0 |
Samsung |
1482765 |
1568058 |
7652 |
3531831.0 |
Sony |
1386320 |
1386847 |
6648 |
3157285.0 |
Techno |
224344 |
266384 |
848 |
0.0 |
From our statistics we deduce that the highest sales were recorded for Samsung electronic appliances at 3531831.0 AUD while the least sales were by Techno mobile at 0.0 AUD. This indicates that there was variance in the records made by the different products. Additionally, the cost of advertisement incurred by the company was such that promoting Samsung products had the highest revenue allocation while HP and Techno had the least revenue allocated for advertisement.
The total sales for monthly sales preceding our analysis recorded were at AUD 23,135,060.
Export Region |
Price (AUS dollars) |
Cost of Advertisement |
Customers |
Sales (AUS dollars) |
Africa |
2317687 |
2308667 |
10780 |
4921036.0 |
Australia |
2015194 |
2002658 |
10372 |
4516548.0 |
Europe |
1963479 |
1890778 |
9592 |
4787998.0 |
3900337 |
3929521 |
17944 |
8909478.0 |
The highest sales were recorded from exports to North America at AUD 8909478.0 while the least were recorded from Australia at AUD 4516548.0, Africa was second with sales of AUD 4921036.0 while Europe had sales of AUD 4787998.0. Also the cost of advertisement in relation to regions were such that advertisement in North America were the highest followed by Africa and Australia while the least advertisements were done in Europe. Therefore for the business to ensure more sales, it should export more to North America where we have the largest market.
Product |
Export Region |
Price (AUS dollars) |
Cost of Advertisement |
Customers |
APPLE |
Africa |
331337 |
329349 |
1608 |
APPLE |
Australia |
218470 |
218124 |
1100 |
APPLE |
Europe |
129908 |
170510 |
607 |
APPLE |
North America |
655340 |
601010 |
2771 |
AUCMA |
Africa |
351519 |
320429 |
1420 |
AUCMA |
Australia |
327375 |
337103 |
1489 |
AUCMA |
Europe |
343520 |
296816 |
1610 |
AUCMA |
North America |
592290 |
612363 |
2320 |
HP |
North America |
8580 |
7363 |
29 |
Hp |
Africa |
283226 |
246200 |
1370 |
Hp |
Australia |
273359 |
277508 |
1498 |
Hp |
Europe |
285316 |
303365 |
1616 |
Hp |
North America |
475269 |
412456 |
2399 |
LG appliances |
Africa |
310420 |
315892 |
1340 |
LG appliances |
Australia |
324535 |
307948 |
1676 |
LG appliances |
Europe |
309128 |
285657 |
1635 |
LG appliances |
North America |
518858 |
574341 |
2399 |
Microsoft electronics |
Africa |
311746 |
260592 |
1192 |
Microsoft electronics |
Australia |
286825 |
287213 |
1664 |
Microsoft electronics |
Europe |
347178 |
279859 |
1377 |
Microsoft electronics |
North America |
419069 |
466237 |
2420 |
Samsung |
Africa |
294825 |
365183 |
1914 |
Samsung |
Australia |
268159 |
273902 |
1395 |
Samsung |
Europe |
301610 |
289465 |
1596 |
Samsung |
North America |
618171 |
639508 |
2747 |
Sony |
Africa |
316442 |
336276 |
1539 |
Sony |
Australia |
296485 |
279021 |
1403 |
Sony |
Europe |
246819 |
265106 |
1151 |
Sony |
North America |
526574 |
506444 |
2555 |
Techno |
Africa |
118172 |
134746 |
397 |
Techno |
Australia |
19986 |
21839 |
147 |
Techno |
North America |
86186 |
109799 |
304 |
Product |
Export Region |
Price (AUS dollars) |
Cost of Advertisement |
Customers |
From our analysis of the performance of different products in different regions we found out that:
Price (AUS dollars) |
Cost of Advertisement |
Customers |
Sales (AUS dollars) |
|
count |
32.0 |
32.0 |
32.0 |
32.0 |
mean |
318646.78125 |
316613.25 |
1521.5 |
722970.625 |
std |
154355.9865783103 |
152344.73382155778 |
709.3730080261928 |
384421.32040037913 |
min |
8580.0 |
7363.0 |
29.0 |
0.0 |
25% |
272059.0 |
263977.5 |
1303.0 |
591527.75 |
50% |
309774.0 |
293140.5 |
1518.5 |
710760.0 |
75% |
348263.25 |
344123.0 |
1735.5 |
843049.25 |
max |
655340.0 |
639508.0 |
2771.0 |
1462076.0 |
The average cost of advertisement was 316613.25, the average number of customers across the trade regions was 1521 while the averages of sales and total cost of the products was 722970.625 and 318646.78125 respectively. Elsewhere the individual products played across the regions as from table-4 above.
Product |
Customers |
Sales (AUS dollars) |
AUCMA |
6839 |
3206451.0 |
Samsung |
7652 |
3531831.0 |
LG appliances |
7050 |
3327564.0 |
Sony |
6648 |
3157285.0 |
Microsoft electronics |
6653 |
3281120.0 |
APPLE |
6086 |
3054878.0 |
Hp |
6883 |
3570759.0 |
Techno |
848 |
0.0 |
HP |
29 |
5172.0 |
Samsung had the most customers with the highest number of sales as well, techno had 848 customers with no sales recorded whereas HP had the least customers (29) with a sales of 5172.0.
From our analysis the company exports more of Samsung products, it will be able to increase its sales.
Price (AUS dollars) |
Customers |
Sales (AUS dollars) |
|
count |
1131.0 |
1131.0 |
1131.0 |
mean |
9015.64721485411 |
43.04862953138815 |
20455.402298850575 |
std |
6840.105141136656 |
30.01233264763024 |
9701.732328385526 |
min |
508.0 |
3.0 |
5152.0 |
25% |
4222.5 |
21.0 |
12366.0 |
50% |
7924.0 |
33.0 |
19812.0 |
75% |
12197.0 |
63.0 |
28375.0 |
max |
46813.0 |
203.0 |
70750.0 |
Advertisement had an effect of causing an average increase of AUD 20455.40 therefore there was a relationship between the sales and and the cost of advertisement. The company can utilize advertisement as a means of promoting sales volumes through increasing the advertisement budget.
shipping Method |
Price (AUS dollars) |
Cost of Advertisement |
Customers |
Sales (AUS dollars) |
Free |
5150372 |
5250000 |
25323 |
11961382.0 |
Paid for |
5046325 |
4881624 |
23365 |
11173678.0 |
Higher sales were recorded when free-shipping was used for the purchases made I.e. 11961382.0 compared to the sales for which shipping was paid for at 11173678.0. From the analysis of shipping method, we conclude that for the company to ensure return customers and also increase of sales, it should adopt measures such as free-shipping and other product promotion incentives.
Using regression we find out that there is a relationship between the geographic regions in which the company conducted business. For instance from earlier tables we inference that North America and Africa comprise the company’s product market, therefore the company should purpose to prioritize the two market spaces so as to ensure more sales. Therefore, using forecasting we can view how varying the company sales is more likely to play out owing to the current statistics and we can project the probable sales through prioritizing company sales.
From the data analysis exercise we make the following recommendations for consideration by the executive:
Below we recommend the best method through which the company can ensure that the recommendations are productive after implementation if the executive adopts the recommendations, then the sales department can anticipate more sales in the coming financial year. The implementation plan includes:
Conclusion
In conclusion, we have found out that, as time changes methods of business conducting change too, in a way we can say they are linearly related. In order to ensure the firm’s sustainability, the executive ought to employ methods that ensure the company evolves with time. One of the best measures against which the firm can program itself to adapt with change is through data analysis. Data analysis provides means through which the company can gain insights on the performance as well as gauge its sustainability prospects through factors such as how much profits it generates.
Even more interesting is the role of data analysis in business intelligence and decision making. Generally, data is key to better decisions and eventual growth of business and ought to be fully adopted.
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