Assignment 1 Regression Note: Submission would be in the form of Hard copy (submit in the class) & Soft copy

copy email at zeeshan.mirajkar@gmail.com) Report should mention Group number along with Names & Roll no of each member Total Marks = 20 Answers should be filled within the rectangular boxes. Marks would be deducted for overwriting.

Question 1 Following is the Data for monthly electrical usage for various home sizes: Home_Size 1,710 1,290 2,930 2,230 1,840 2,400 1,980 1,470 1,600 1,350 Monthly_Usage 1,571 1,182 1,954 1,840 1,711 1,956 1,804 1,264 1,493 1,172

Variables: The dependent variable in this example is the electrical power usage, Y. The independent variable is the home size, X. -Electrical Power Usage, Y (Kilowatt-hours) -Home Size, X (Square feet) 1a) Draw a Scatter plot (using SPSS). Interpret the scatter plot and explain the relationship between the dependent & the independent variable. (4 marks)

As we see that it is a linear or straight line curve, which shows the absolute relationship between the two variables. And it also shows that, there is a positive correlation between the two variables. Here the r= 1 (correlation is equal to one).In this plot there is one outlier also, which is located at 2900. But such kind of outlier is non influential in nature. Such outliers sometimes work against the two variables? If we ignore that outlier or change their value or analyze the data with or without outlier, then the data will be analyzed correctly with no errors.

1b) Run a regression model and interpret the regression results.

(3 marks)

Model Summary Adjusted R Std. Error of Model R R Square Square the Estimate a 1 .912 .832 .811 133.438 a. Predictors: (Constant), Home Size, X (Square feet)

Coefficients

Model 1 (Constant) Home Size, X (Square feet) a. Dependent Variable: Electrical Power Usage, Y (Kilowatt-hours)

Unstandardized Standardized Coefficients Coefficients B Std. Error Beta 578.928 166.968 .540 .086 .912

t 3.467 6.288

Sig. .008 .000

In the above regression model the r value is above 0.7 which means that the model can be used for prediction of the electric usage based on the home size. This also means that home size is the driving force for high electrical usage. In the above regression model correlation or the R- value is .912. This is very close to (1) so the correlation between the two models is greater towards positive correlation.

1c) what strategies can company formulate based on the regression results. Motivate your answer with explanation. (3 marks) In the above regression problem the level of significance is .000 which means that there is a direct influence of home size on the electrical power usage. The company can focus on homes with big area in square feet to increase their business. The company can also formulate special offers for people having big homes with high electrical usage to attract more users. The company can also launch some scheme only for that home with more than 2000 square feet will get 7 days extra credit than others.

Question 2 Refer to the Excel Sheet (Big Bazaar.doc) for the chains database and consider the focal brand Nivea for this question Data description: For the supermarket brand "Big Bazaar" 124 weekly data points of one outlet are available (running from week 46 in 2003 until week 12 in 2006). For each brand / formula combination we have data on: Sales (stock-keeping units); Prices (Rs per l00 ml) (as observed); Regular price (Rs per 100 ml) (proxy for the price as if there were no discounts); Variable for feature-only: weighted distribution figure at the chain level for a feature-only (no display) in a certain week. A feature-only means special out-of-store attention for the brand, either in the store flier or in an ad in a newspaper or a magazine. Variable for display-only: weighted distribution figure for display-only (no feature) in a certain week. A display-only means special in-store attention for a brand: a temporary shelf or box with products in one of the aisles, or attention around the brand's regular shelf.

Question 1 Develop a regression model (Additive or Multiplicative) to predict the Sales of the focal brand Nivea and describe each parameter / term of the model. Motivate why you used this type of the model. (3 marks) Model Summary Adjusted R Std. Error of Model R R Square Square the Estimate a 1 .870 .756 .748 829.1785666 a. Predictors: (Constant), NIVEA FEATURE, NIVEA DISPLAY, NIVEA Price (Rs), NIVEA Price (Rs)

Model 1 (Constant) NIVEA Price (Rs) NIVEA Price -14.598 4.183 (Rs) NIVEA 7868.324 972.397 DISPLAY NIVEA 10902.201 1393.046 FEATURE a. Dependent Variable: NIVEA Sales (Rs)

Coefficientsa Unstandardized Standardized Coefficients Coefficients B Std. Error Beta 6147.683 819.284 -7.277 6.189 -.102 -.274 .493 .403

t 7.504 -1.176 -3.490 8.092 7.826

Sig. .000 .242 .001 .000 .000

As it is evident from the above model that R-square value is more than 0.7 which means that display and feature both has the significant effect on the price of Nivea. In this model both the dependent variables are the driving force of price. I used this particular model to see which the most influential variable between the two is. If the display plays the important role in pricing and sale of the product then we should focus on display of the product. (or) If the feature plays the important role in pricing and sale of the product then we should focus on feature of the product.

Question 2 Interpret the regression output. (4 marks)

As it is evident from the above model that R-square value is more than 0.7 which means that display and feature both has the significant effect on the price of Nivea. In this model both the dependent variables are the driving force of price. In the model level of significance is also .000 which means that there is a direct influence of display and feature on pricing.

Question 3 For the following value of coefficients, calculate the Sales for Nivea (3 marks)

(Nivea Regular price = Rs 192.11, Nivea Display = 0.0568548, Nivea Feature = 0.02669355) Sales= 0.102 * 192.11 + 0. .493 * 0.0568548 + 0.403 * 0.02669355 =19.63

(Group 7) members name and roll no.:Class P.G. Marketing

Mohd. Irfan Rizvi Reena Gupta Shruti Dubey Suroje ghosh Saad Syed

Roll No.52 Roll No.77 Roll No.99 Roll No.104 Roll No.83