Mean median and mode what does it have to do with marketing?

Answer 1

All three are measures of what is called central tendency. They give you an idea where the "middle" is.

So in marketing you may want to know "the center value" of the people in a survey will purchase a product that you have promoted in some way. Here are some specific examples I made up to help see this.


The mean is the arithmetic average meaning you add up all the values of n people and divide by n.
This might be useful in a survey where the product is rated 1-5. Say 100 people rate it and your total points is 160 divided by 100 is 1.6 and that is the mean rating.
Probably not too good if 5 is good and 1 is poor. So the mean here tells you that the "average' rating is 1.6.


Now maybe you want to know where half the people are in relation to a certain question.
Say you ask "does price matter on a scale of 1 to 5 with 1 being not at all and 5 being price is very important. You ask a 10 people. The median will be the middle value.
For example.


The first three people you ask, call them person 1, person 2, and person 3 say 5
and people 4 and 5 say 1
people 6,7,8, 9 and 10 say 2


So now look at how many 1, 2 ,3 4, and 5 you have with the goal of finding the middle value, also known as the median.


2 ones
5 twos
0 threes
0 fours
3 fives


If you graphed this as a histogram, you could see the median visually as the middle value.
The point it the median gives you the middle value. In this example the median is (2+2)/2= 2 (and the mean is 2.7 just to see the difference)




The mode will tell you the most common value. That is to say what is the most likely answer.
So the mode of the data set above is 2 since there are 5 of them. This means "most" people would say it matters 2 on a 1-5 scale.