Quantitative data can help business people make good decisions.
Quantitative techniques use surveys, tests, experiments and other data-gathering methods to assemble information. The facts gathered in this way can be used to help make business decisions about marketing, advertising, packaging, assembly techniques, financial decisions, which services to offer and many other business considerations. Both gathering and analyzing information is crucial to applying quantitative data to good business decisions.
Finances
One area where quantitative techniques are applied in business is in the area of finances. Some of the models that financial managers and analysts use are return on investment, decision trees and net present value. Financial analysts determine how much profit a particular product brings in versus the costs of producing that product. They run regressions and analyses to note trends over time and determine how much to invest in a particular business line. Financial analysts also use quantitative methods to determine productivity and whether or not to hire, retain or lay off workers. They use quantitative data to manage risk and create investment vehicles.
Advertising
Advertisers use quantitative data to determine how many viewers or readers will see a particular advertisement in a particular medium. They use data from rating services to find out how many people click on a certain website or watch a particular television show at any time. Advertisers also use quantitative data to do pre- and post-testing of advertisements. Advertisers use surveys to test ad recall in viewers, and attitudes about proposed advertisements, among other things.
Marketing
Companies make heavy use of statistics to determine market their products, which markets their products and services will do best in and which consumers will buy their products. There are thousands of companies in the United States that gather and analyze data about consumer interests, desires, likes, dislikes, motivations and concerns. Marketers use this data to focus sponsorships, direct mail campaigns and position their companies in the general culture. Marketers also use data from UPC codes at stores (often in combination with shopper discount cards) to determine who is buying their products, how often and where. This also gives them important information to use in making decisions about stocking, delivery and promotions.
Insurance
Insurance companies have a multitude of applications for quantitative data. Although many of these applications could transfer to other businesses, insurance companies have dozens of statisticians or actuaries on staff. Therefore, they have the manpower and know-analyze mountains of data. For example, insurance companies gather data about each salesperson in each line of business. They then analyze the data to see if there are similarities in the top salespeople so they can recommend improvements to those not doing so well. They also see which lines of business produce profit and which should be closed down because they are unprofitable. Insurance company actuaries also analyze data on accidents, fires, floods and other mishaps that require them to pay out money and use these analyses to set insurance rates for their customers.
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