BVAR as a category management tool: An illustration and comparison with alternative techniques

BVAR as a category management tool: An illustration and comparison with alternative techniques

0.00 Avg rating0 Votes
Article ID: iaor1996669
Country: United Kingdom
Volume: 14
Issue: 3
Start Page Number: 181
End Page Number: 199
Publication Date: May 1995
Journal: International Journal of Forecasting
Authors: , , ,
Keywords: marketing
Abstract:

Categroy management-a relatively new function in marketing-involves large-scale, real-time forecasting of multiple data series in complex environments. This paper illustrates how Bayesian Vector Autoregression (BVAR) fulfils the category manager’s decision-support requirements by providing accurate forecasts of a category’s state variables (prices, volumes and advertising levels), incorporating management interventions (merchandising events such as end-aisle displays), and revealing competitive dynamics through impulse response analyses. Using 124 weeks of point-of-sale scanner data comprising 31 variables for four brands, we compare the out-of-sample forecasts from BVAR to forecasts from exponential smoothing, univariate and multivariate Box-Jenkins transfer function analyses, and multivariate ARMA models. Theil U’s indicate that BVAR forecasts are superior to those from alternate approaches. In large-scale forecasting applications, BVAR’s ease of identification and parsimonious use of degrees of freedom are particularly valuable.

Reviews

Required fields are marked *. Your email address will not be published.