Quantitative Trendspotting

Abstract

Trendspotting has become an important marketing intelligence tool for identifying and tracking general tendencies in consumer interest and behavior. Currently, trendspotting is done either qualitatively by trend hunters, who comb through everyday life in search of signs indicating major shifts in consumer needs and wants, or quantitatively by analysts, who monitor individual indicators, such as how many times a keyword has been searched, blogged, or tweeted online. In this study, the authors demonstrate how the latter can be improved by uncovering common trajectories hidden behind the coevolution of a large array of indicators. The authors propose a structural dynamic factor-analytic model that can be applied for simultaneously analyzing tens or even hundreds of time series, distilling them into a few key latent dynamic factors that isolate seasonal cyclic movements from nonseasonal, nonstationary trend lines. The authors demonstrate this novel multivariate approach to quantitative trendspotting in one application involving a promising new source of marketing intelligence—online keyword search data from Google Insights for Search—in which they analyze search volume patterns across 38 major makes of light vehicles over an 81-month period to uncover key common trends in consumer vehicle shopping interest.

Marketing capability, organizational adaptation and new product development performance

“…Customer engaging -the core marketing capability -puts pressure on firms to deliver superior customer value, which in turn strengthens customer intimacy to a company and its product offerings (Day & Moorman, 2010). With the market sensing capability, a firm is able to anticipate and act on market trends, weak signals and events that inform the changing customer needs and market environment (Day, 1994;Du & Kamakura, 2012), thus providing a basis for creating superior customer value. Partner linking nurtures organizational sense-making by offering opportunities of communications with network ties and access to diverse information sources and resources (e.g., Dyer & Singh, 1998;Mu & Di Benedetto, 2012;Teece, 2007).…”

“…Market sensing capability thus helps a firm to be alert and vigilant to market trend and opportunity discovery. By mapping out the trajectory of market trend, encoding and assigning meaning to environmental cues, a firm is able to recognize emergent patterns in market environment, detecting and creating opportunities for successful development of new products that can capture both existing and latent customer needs and respond to changes in market conditions ahead of competitors (Day, 1994;Du & Kamakura, 2012;Teece, 2007).…”

“…Market sensing can help firms detect farreaching new developments in marketplaces, foretell the onset of a path-breaking shift in marketplaces or behavior emergence of a new paradigm or radical departures from the past, or allow firms not only monitor the market dynamics, but also get an early read on real-world trends (Du & Kamakura, 2012). Based on insights from market sensing, firms thus can avoid complacency with knowledge about current markets (Dickson & Giglierano, 1986), take advantage of market opportunities before they become obvious, and develop novel products to delight both existing customers and new customers.…”

Scholarly Views on Theory: Its Nature, Practical Application, and Relation to World View in Business Research

“…This measurability adds to theory development because quantitative studies can enable trend spotting. Du and Kamakura (2012) found that a multivariate quantitative approach to trend spotting is a useful method of gathering market intelligence for creating and refining theory. Quantitative models have been a default tool for operation management research for many years (Bertrand & Fransoo, 2002).…”

Advertising to Early Trend Propagators: Evidence from Twitter

“…First, they allow advertisers to identify new topics that are gaining interest or 'trending' rapidly across the platform (Du and Kamakura, 2012). Trending topics are increasingly displayed on social media such as Twitter and Facebook, and on news sites such as the BBC.…”