Marketing Head’s Condurum

Group 7 :
Madan
Senthil
Rini
Syed
WSES is a software services company

 Characters :
 Jack - the CEO
 Ben - Vice President-Marketing
 Mark – Young Data analysist holding phd in statistics.
Products and Services at WSES inc

 Market leaders in there segment

 GTMsys
 Finsys
 Procsys
 Lifesys

 Learnsys
 Contactsys
 Logisys
Being market leader what worries Jack

 Competition
 Which brings margins down
 Which requires reduction in production
cost.
Where ?

 6% of revenue which is $500mn goes into marketing.

 Which includes
 Travel costs, boarding, lodging costs, time spent etc.. By sales team
 Along with that customer wants to travel development centers before buying
the deal. Which add to the cost
 And the time spent by technical experts, support staff etc..
How?

 WSES has more than 4 years of data. But how to interpret the data.
 Here is where Mark comes into picture.
 Mark with the help of Ben developed a model to run the analysis to
understand the data.
Disriminant analysis

 Mark used discriminant analysis to analyze the data.

 Why not regression.
 Discriminant analysis is technique for analyzing data when the dependent
variable ( products like procysys, lifesys etc.., and probability to clinche deal
or lose it) is categorical and independent variable (revenue split for sales, on
a point scale to identify products sold etc..) are metric.
 Example : dependent variable ( PC brand, A, B and C) independent variable
( ratings of attributes of PCs on 7 point likert scale)

 Whereas for regression analysis requires both dependent and independent

variables as metric.
 Disriminant analysis – Are variable values different
across groups?

Relative strength significantly differentiate

between the two groups

We can Observe, that the Relative strength in the segment, Profit

of the customer and profit % are clearly different between the
two groups.
Disriminant analysis – Are assumptions about
data satisfied?

Assumption of equal
The correlation numbers indicate no multicollinearity
variance-covariance is
not met
H0 = Equal Var -CoVar
H1 = Not Equal Var -CoVar
 Disriminant analysis –
The square of Canonical
correlation (0.791)2 = 0.625 (63%)
is the variance in the dependent
variable explained by this
discriminant
How good is the model?
Wilks'λ is significant at 0.05 levels,
indicating that the null hypothesis
which is that the variables ( like
segment etc) have no impact on win
or loss is rejected.
So, discriminant function has real
discriminating powers.
Disriminant analysis – How good is the model?

The model shows 97.3% correct

classification.

Considering we would have only 50%

correct without the model , we see
a 47% improvement in the classification
with Discriminant analysis.
Disriminant analysis – Interpretation

All measures seems to be indicating

Profit to the customer , Profit and Relative Strength in the segment in
that order contribute to the discrimination function
Ben’s suggestions to Jack

 After discussion with Mark Ben gave following suggestions to Jack

 For Procsys product pipeline reduce budget by 50%
 Expected value of sales to be 90% of sales opportunities.