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Banking Term : Square-Inch Analysis

Sep 15, 2015 15:03 IST

    It is a method used by the direct marketers to estimate the profits of the offers appeared in the pages of a catalog.  Square inch analysis confers the medium of estimating the costs of the each item based on the amount of space occupied by their sales offers on the pages on a percentage basis. The outcomes obtained from this are used to improve the method of assigning merchandise offers to pages and allocating space in the future catalogs. This process is widely known as Pagination. Pagination process is also exercised by most of the newspapers, magazines etc.

    Estimating the performance: - The mechanisms used in square inch analysis are time consuming but not cumbersome. It involves the following steps in managing catalog.

    i. Take the measurement of text and images are taken of each page.
    ii. Accounting of measurement of all white spaces and editorial for every inch of space on page should be done.
    iii. Place data in one column of the spreadsheet, obtained from step II and sales of each product in the other column.
    iv. Now, to find out the sales per square inch, divide the sale of each product by the space occupied on the page. Besides this, to obtain a complete picture of each product, include columns for units sold, profit per item, profit per inch, item number and product description.
    iv. At last, introduce an index column which contains  the result obtained from the division of sales per inch by the average sales per inch of the catalog.

    Now, if observed result: -

    i. Is equal to 1.0 then the product is performing equal to the average.
    ii. Is less or greater than 1.0 then, product is performing below average or above average respectively.

    Applications: - It is widely used in

    i. Printed offers like magazine display ads, travel brochures etc.
    ii. Catalog publishings
    iii. Website Marketing analytics, etc.

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