DAR ANALYSIS TEST

Dataset: Credit Card

Submitted To,
Dr. Srilakshminarayana.G

Submitted By,
Deekshith Hegde
19136
1. Identify the categorical and quantitative variables, along with scaling?

Answer: Bank is a categorical variable, since we cannot do any analysis directly on the name
of the bank.

Reward point: It is Categorical variable which is ordinal in nature.

Cashback: It is quantitative variable

Interest rate: It is quantitative variable.

Free movie tickets: It is binary categorical variable.

Joining fees: It is quantitative variable.

Documentation: It is binary in nature.

Ease of payments: It is categorical variable.

Variety of cards: They are categorical in nature.

Status symbol: They are binary nominal in nature.

Services: They are ordinal variable.

Communication from the representatives: They are binary nominal.

Security: They are categorical variable with ordinal scale.

Discounts: They are quantitative.

Follow ups: They are categorical variable with ordinal scale.

Cash withdrawal limits: They are categorical variable with nominal scale.

Approval: They are binary variable.

Discounts on travel: quantitative variable.

Discounts on dining: quantitative variable.

Age limit: Categorical with nominal scale.

2. Will the average cash back be different with respect to reward points?

The Anova test in R is used to understand if there is any significance relation between the
given two variables. In this situation we are trying to understand if there is any significance
impact on reward point by the average cashback.

BUSINESS LEADERSHIP:

To find out if a significant relationship or correlation exists between the two stated variables
from the dataset, the following hypothesis must be considered for security and approval.

H0: There exists no difference between the average cash back with respect to the reward
points.

H1: There exists difference between the average cash back with respect to the reward
points.

Research Hypothesis: Probably, there exists association between the cash back of the
customer and the reward point on the credit card.

From the data we do not get a clear idea that there is no association between the two specified
variables. The observed P-value, which is greater than alpha, it can be said that they are not
associated with each other and, hence accepting the Null hypothesis

We can say there is no significant difference between the average cash back and the reward
points.

Code:

setwd("E:/sdmimd_notes/Term 4/DAR/New folder")

getwd()

install.packages("readxl")

library(readxl)

install.packages("psych")

library(psych)

install.packages("dplyr")
library(dplyr)

install.packages("FSA")

library(FSA)

install.packages("car")

library(car)

#ANOVA

Credit_card=read_excel(file.choose())

attach(Credit_card)

View(Credit_card)

fix(Credit_card)

CC_anova=aov(Credit_card$`Cash_back`~Credit_card$`Reward points`)

summary(CC_anova)

str(Credit_card)

detach(Credit_card)

Output:

CC_anova=aov(Credit_card$`Cash_back`~Credit_card$`Reward points`)
> summary(CC_anova)
Df Sum Sq Mean Sq F value Pr(>F)
Credit_card$`Reward points` 2 0.000047 2.328e-05 0.166 0.848
Residuals 27 0.003783 1.401e-04

ORGANIZATIONAL EXCELLENCE:

Since the analysis shows that, there is a no association with the Security and the approval, the
company now need not concentrate significantly on these variables. The company should
concentrate on those variables which will have significant impact on the variable and will
help the company take decision which will help them to sell more credit card and serve
customer in a better way.
VALUE CREATION:

The stake holders are:

The Customers: The customers are the direct benedictory of credit card services. The use it
in their regular purchase and transaction of monthly purpose and repay with charges in the
beginning of next month. They will choose card which offers more benefits and rewards and
ease of payments.

The Company: This information will be help totally to understand the consumers based on
their preferences. This analysis will help company to come up with different scheme and
benefits to the customer and they will be able to sell more credit cards and intern it will result
in more transaction and growth of the company.

The researchers: The researchers will be providing their clients an insight about the consumer
behaviour and preference pattern during the buying process.

3. Will there be a significant difference between the average joining fee with respect to
opinion on easy payment options?

The Anova test in R is used to understand if there is any significance relation between the
given two variables. In this situation we are trying to understand if there is any significance
impact on reward point by the average cashback.

BUSINESS LEADERSHIP:

To find out if a significant relationship or correlation exists between the two stated variables
from the dataset, the following hypothesis must be considered for security and approval.

H0: There exists no difference between the average cash back with respect to the reward
points.

H1: There exists difference between the average cash back with respect to the reward
points.

Research Hypothesis: Probably, there exists association between the cash back of the
customer and the reward point on the credit card.
From the data we do not get a clear idea that there is no association between the two specified
variables. The observed P-value, which is greater than alpha, it can be said that they are not
associated with each other and, hence accepting the Null hypothesis

We can say there is no significant difference between the average cash back and the reward
points.

setwd("E:/sdmimd_notes/Term 4/DAR/New folder")

getwd()

install.packages("readxl")

library(readxl)

install.packages("psych")

library(psych)

install.packages("dplyr")

library(dplyr)

install.packages("FSA")

library(FSA)

install.packages("car")

library(car)

#ANOVA

Credit_card=read_excel(file.choose())

attach(Credit_card)

View(Credit_card)

fix(Credit_card)

CC_anova=aov(Credit_card$`Joining fee`~Credit_card$`Easy payment options`)

summary(CC_anova)
str(Credit_card)

detach(Credit_card)

Output: CC_anova=aov(Credit_card$`Joining fee`~Credit_card$`Easy payment options`)

> summary(CC_anova)
Df Sum Sq Mean Sq F value Pr(>F)
Credit_card$`Easy payment options` 1 7085 7085 1.104 0.302
Residuals 28 179665 6417

ORGANIZATIONAL EXCELLENCE:

Since the analysis shows that, there is a no association with the Security and the approval, the
company now need not concentrate significantly on these variables. The company should
concentrate on those variables which will have significant impact on the variable and will
help the company take decision which will help them to sell more credit card and serve
customer in a better way.

VALUE CREATION:

The stake holders are:

The Customers: The customers are the direct benedictory of credit card services. The use it in
their regular purchase and transaction of monthly purpose and repay with charges in the
beginning of next month. They will choose card which offers more benefits and rewards and
ease of payments.

The Company: This information will be help totally to understand the consumers based on
their preferences. This analysis will help company to come up with different scheme and
benefits to the customer and they will be able to sell more credit cards and intern it will result
in more transaction and growth of the company.

The researchers: The researchers will be providing their clients an insight about the consumer
behaviour and preference pattern during the buying process.

4. Will the opinion on security be significantly associated with opinion on approval?

The chi-square test in R is a statistical tool used to assess if there is a meaningful association
between two categorical variables. They pick the two variables from the same population.
Thus, I used Chi-square analysis to check the degree of association between Security and
opinion of approval in the given dataset.

BUSINESS LEADERSHIP:

To find out if a significant relationship or correlation exists between the two stated variables
from the dataset, the following hypothesis must be considered for security and approval.

H0: There exists no association between the Security of the customer and the opinion of
approval.

H1: There exists association between the Security of the customer and the opinion of
approval.

Research Hypothesis: Probably, there does not exists association between the Security of
the customer and the opinion of approval.

From the data we do not get a clear idea that there is no association between the two specified
variables. The observed P-value, which is greater than alpha, it can be said that they are not
associated with each other and, hence accepting the Null hypothesis.

Code:

setwd("E:/sdmimd_notes/Term 4/DAR/New folder")

getwd()

install.packages("readxl")

library(readxl)

install.packages("vcd")

library(vcd)

credit=read_excel(file.choose())

attach(credit)

fix(credit)

View(credit)
names(credit)

str(credit)

prop.table(table(credit[,3]))

prop.table(table(credit[,5]))

prop.table(table(credit[,6]))

table(credit$`Security`, credit$Approval)

chisq.test(table(credit$Security,Approval))

fisher.test(table(credit$Security,Approval))

chisq.test(table(credit[,5], credit[,6]))

fisher.test(table(credit[,5], credit[,6]))

assocstats(xtabs(~credit[,5]+credit[,6], data=credit))

detach(credit)

Output:

> prop.table(table(credit[,14]))
h l m
0.4333333 0.2000000 0.3666667

> prop.table(table(credit[,18]))

difficult easy
0.4333333 0.5666667

Cc=table(credit$Security, credit$Approval)
> Cc

difficult easy
 h 3 10
l 4 2
m 6 5
> chisq.test(Cc)

Pearson's Chi-squared test

data: Cc
X-squared = 4.0658, df = 2, p-value = 0.131

ORGANIZATIONAL EXCELLENCE:

Since the analysis shows that, there is a no association with the Security and the approval, the
company now need not concentrate significantly on these variables. The company should
concentrate on those variables which will have significant impact on the variable and will
help the company take decision which will help them to sell more credit card and serve
customer in a better way.

VALUE CREATION:

The stake holders are:

The Customers: The customers are the direct benedictory of credit card services. The use it
in their regular purchase and transaction of monthly purpose and repay with charges in the
beginning of next month. They will choose card which offers more benefits and rewards and
ease of payments.

The Company: This information will be help totally to understand the consumers based on
their preferences. This analysis will help company to come up with different scheme and
benefits to the customer and they will be able to sell more credit cards and intern it will result
in more transaction and growth of the company.

The researchers: The researchers will be providing their clients an insight about the
consumer behaviour and preference pattern during the buying process.
5. Fit a regression model to predict joining fee based on cash back, interest rate etc.
Use all appropriate variables to build the model.

6. Can you use cluster analysis for the given data? Justify.

Cluster analysis can be used to identify the homogeneous group of segments. In the given
datasets for analysis, the zones can be clustered based on approval, reviews, documentation
and other factors. This is possible since the data gives a detailed segment between each of the
components and this lets us carry out the cluster analysis methodology.

After the clusters have been developed, businesses can keep a track of their customers and
make necessary decisions to retain them in that cluster.

BUSINESS LEADERSHIP:

Attributes such as zones, customer satisfaction, sales, budget, times of visit can be
considered. We can use clustering to explore and select customers that are potential buyers of
the product. This differentiates the most likeable customers from the ones who possess the
least tendency to purchase the product. After the clusters have been developed, businesses
can keep a track of their customers and make necessary decisions to retain them in that
cluster.
ORGANIZATIONAL EXCELLENCE:
After clustering the data based on the specific variables or factors, the organization can make
use of cluster analysis for detecting structures that are present in the data, determining
optimal clusters, for giving out readable differentiated clusters, ensuring stability of cluster
even with the minor changes in data, to carry out efficient processing of the large volume of
data and handling different data types of variables from various other recorded datasets.
VALUE CREATION:

The Customers: The customers are the direct benedictory of credit card services. The use it
in their regular purchase and transaction of monthly purpose and repay with charges in the
beginning of next month. They will choose card which offers more benefits and rewards and
ease of payments.
The Company: This information will be help totally to understand the consumers based on
their preferences. This analysis will help company to come up with different scheme and
benefits to the customer and they will be able to sell more credit cards and intern it will result
in more transaction and growth of the company.

The researchers: The researchers will be providing their clients an insight about the
consumer behaviour and preference pattern during the buying process.

7. How do you build conjoint analysis for the given situation and data?

Conjoint Analysis

In order to apply the conjoint analysis, one has to develop three data files. The first data set
should have the levels of the product considered. After this, one must design the profile
matrix. The profile matrix has all possible combinations of the attribute levels. Similarly, one
has to construct all possible combinations. After this, one must select a sample of customers
and show them all the combinations and ask them to give their preferences on a rating scale.
Note that, there are several ways of doing it. One can also ask them to rank or ask them to
give their choices etc. It is to be noted that the parameters can be estimated for the entire
sample or for an individual customer. Also, that, dummy variable regression is used to
estimate the contribution from each combination to the overall preference given by the
customers. The built-in function helps one to estimate the beta coefficients for each dummy
variable defined. The dummy variables are defined for each level of the attributes and the
same are used in model building.

In order to carry out all this, the analyst has to design the datasets into the levels specified and
only after that the outcome can be obtained in order to analyse the factors considered. In the
given dataset, the specifications for the purchase is not mentioned, staring with,
1.The type of account
2. specifications for the documentation
3. Types of cards valid
4. Specifications for easy payment etc
Implication: Using the above process, one can obtain the choices for each customer and
based on the same one can segment the customers. The segmentation or clustering is based on
the final findings of the conjoint analysis. This analysis will let the company get a closure
look at the customer base it has and how the company must work on getting a wider customer
base and retaining the already existing ones.