The Reliability of Input/Output Analysis for Marketing

by James Rothe



Numerous quantitative and analytical techniques have been developed and applied to marketing problems in the past decade. Among these techniques is input/output (I/O) analysis. Although the I/O analysis is based on the simple concept that the sales of one industry are the purchases of another industry. Expansion of this simple concept shows that the whole economy is interrelated. A change of output in one industry will affect its input requirements. This will change the output of other industries whose inputs in turn will affect the output of still more industries. Many articles dealing with the use of I/O in marketing were published since the development of I/O analysis. These articles suggested that I/O analysis was a well developed new tool which would greatly facilitate marketing analysis. The I/O technique was touted as useful for the identification and location of new markets, determination of market shares, market growth rates, optimal product-market mixes, and so forth. Furthermore, the firms which are knowledgeable in I/O analysis have raised some serious questions which are directed at the data rather than the technique itself. A basic data problem is the considerable time lag between the collection of the data and the publication of the tables.

California Management Review

Berkeley-Haas's Premier Management Journal

Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

Learn more
Follow Us