Use of Statistical Analysis in MR Broadly we can classify analysis into 3 types- univariate (single variable at a time), bivariate (two

variables at a time), Multivariate (3 or more variables at a time). The choice of which of the above types of data analysis to use depends on at least 3 factors 1. Scale of measurement of data (like nominal, ordinal, interval and ratio), 2. Research design, 3. Assumptions about test statistic being used. We will briefly discuss below with their implicationsScale of measurement: If the variables being measured are nominally scaled (involving categories such as age, income, gender, etc.,) many of the advanced multivariate analysis techniques such as factor, discriminant analysis cannot be used. Even average or standard deviation doesnt have meaning. The commonly used univariate analysis is referred here as a frequency distribution. For e.g., age variable, we can say that 50% of the sample were below 25 years old and so... Mostly univariate or bivariate analysis is used on Ordinal data. For e.g., a ranking of 5 brands of audio systems by a sample of consumers may produce ordinal scale of data consisting of these ranks. Bivariate analysis of certain types with the use of chi-square test of association of 2 variables can be performed with 2 nominally scaled variables. For e.g., brand ranked as no 1 and income group to which respondents belongs (a nominal variable). This would tell us if a significant association exists between these variables. Nominal and ordinal scale data are non metric data and generally non parametric tests are used on non metric data. Interval or ration scaled data are known as metric data. Research Design: For e.g., whether one sample is taken or two, and whether one set of measurement is independent of the other or dependent on the other determine the analysis technique- let us consider the followingAttitude towards a brand measured from buyers and non buyers of the brand. The two are independent samples and a t test for independent samples can be used to measure if the mean attitude is different among the users and non users, if the attitude is measured with an interval scale. If there had been 3 means to compare instead of two, we can use ANOVA instead of t test. As an example of dependent samples, assume that a group of respondents is given a new product to try. Before and after trial, their opinion about the product is measured using an interval scale. This is a set of dependent samples and a type of t test called the paired difference t test is used to to find out any significant difference in their opinion. In general, if the number of variables associated with or causing simultaneous change in another variable are two or more, we need a multivariate technique of analysis rather than a univariate or bivariate. This is because multivariate techniques assume that many variables simultaneously affect a given variable. For e.g., we can measure simultaneous effect of advertising, pricing and sales promotion on sales through multiple regression analysis. About test statistic: For e.g., independent samples t test assumes that the two populations from which samples are drawn is independent. In additions, it assumes that the populations are normally distributed and have equal variances.

Hypothesis testing Example: Suppose as marketers of branded jeans we wanted to find out whether a set of customers in Delhi and Mumbai thought of our brand in the same way or not. A survey is conducted in both cities and a statistical test is done to find out if the two sets of ratings are significantly different from each other or not. The null hypothesis is used to perform a statistical test to prove or disprove (reject) a statement. In this case, null hypothesis for t test would be There is no significant difference in the ratings given by customers in Mumbai and Delhi. In other words, null hypothesis states that the mean rating from these two places is the same. Analysis of Variance (ANOVA) Experimentation Whenever a marketing mix variable (independent variable) such as price, promotion or type of distribution even specific elements like shelf space or colour packaging and so on is changed, one would like to know the effect. Under proper conditions, an experiment can tell us the effects of specific variation in one or more elements of marketing mix. A one independent variable experiment is called one way ANOVA and name refers to a set of techniques studying the cause and effect of one or more factors on a single dependent variable. When more than one dependent variable is studied, the technique called MANOVA (multivariate analysis of variance). Correlation and Regression Explaining Association and Causation The application of correlation analysis is to measure the degree of association between two set of quanti data. For e.g., how are sales of product A are correlated with sales of product B. The regression analysis is to explain the variation in one variable (called dependent) based on variation in one or more other variables (independent). The application areas in explaining variations in sales of a product based on advertising expenses, or no. of sales people. Its a technique used in sales forecasting. If there is only one independent and one dependent, its known as simple regression and more than one multiple regression. It could be linear or non linear. Discriminant Analysis For classification and prediction The technique is used to distinguish between two or more sets of objects or people, based on knowledge of some of their characteristics. For e.g., selection process for a job, admission process of an educational program in a college or dividing a group into potential buyers and non buyers. In fact, banks use them to classify the good and bad lending risks. Factor Analysis For Data Reduction It is a useful method of reducing data complexity by reducing the number of variables being studied. For e.g., it helps a marketer to find out what exactly makes a consumer buy his product after eliminating the possible purchase criterion (which may range from 1- many) and so factor analysis is used to identify the latent or underlying factors from an array of seemingly important variables. Cluster analysis - for market segmentation It is a multivariate procedure ideally suited to segmentation applications in MR. This is because a cluster by definition is a group of similar objects. And segmentation involves identifying groups of

target customers who are similar in buying habits, demographic characteristics, etc., there could be cluster of brands for instance... Multidimensional Scaling (MDS) For brand positioning MDS can be used for product or brand positioning. For e.g., a product category of shampoos could be identified as having 5 attributes important to consumer price, lather, fragrance and so on... if these were to be rated on a 7 point scale and say 6 competing brands... then we could pick 2 attributes and plot the 6 brands on a map according to consumer ratings. This would help the company to figure out whether to re-position or not.... Conjoint analysis (CA) - for product design It is used to address the question how does the customer value the various tangibles and intangible benefits/features offered by the product? CA is a multivariate technique that captures the exact level if utility that an individual customer puts on various attributes of product offering say a product priced at Rs. 400 vs. Rs. 500.