Predictive Modeling Capability
EWS "Headlights"
In order to support our clients' need for "headlights" capabilities into the performance of their markets in the near-term, IPR develops customized predictive models using the various economic and market-related indicator series that it tracks on a monthly basis.
The predictive models help our clients assess the implications for market growth several quarters into the future based on a formal quantification of the relationship between the various indicator series and market growth.
Separate analyses are conducted for the product and service sub-markets of focus, in each of the countries of interest, using the various indicators most closely associated with each of them.
IPR employs predictive modeling techniques using principal component analyses and regression modeling to quantify the relationships between the high-frequency economic, demographic and market-specific leading indicators and market growth. Regression models are estimated using the economic and market-related series, with unique lag structures identified and specified for each of the indicator series.
The predictive models are then used to develop short-term forecasts of market growth which enable our clients to get insights into the likely market dynamics and assess whether the existing forecasts used for planning or tactical execution are within acceptable bounds, or whether adjustments need to be made to the existing forecasts, budgets, and/or marketing plans.
