By determining how weather has predictably influenced sales in the past (and to
what extent), we can remove weather-related factors from the overall
picture. Now, instead of the containing the total number of sales made,
the "Sales, Revenue, and Profit" box in the diagram to the right only contains
how many sales could not be explained by fluctuation in weather.
An (overly) simplified example (see the table below for clarification): If you sold 71, 77,
59,
62,
69, and
97
units on days where the daily temperatures were
60F,
65F,
70F,
75F,
80F, and
85F
respectively, the daily number of sales
that could not be explained by fluctuation in temperature would be approximately
+11,
+12,
-11,
-13,
-11, and
+12
units. Please note
that this is an extremely overly-simplified example and is
neither accurate nor theoretically correct.
(The purpose of the example is to convey an intuitive understanding of the process).
We're one step closer towards establishing a direct link between Marketing and Sales. The next
step is to further simplify the picture by identifying how (and to what extent)
general trends, seasonal cycles, and holidays influence
sales.
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