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BRM 2
BRM 2
An Overview
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Session Objective
Basic Quantitative Techniques
Descriptive & Inferential Statistics
Data-Primary & Secondary
Basic Descriptive Statistics
Random Variable-Discrete & Continuous
Types of Variables
Normal Distribution, Central Limit Theorem
Inferential Statistics, Testing of Hypothesis ,p-value
Different Types of Scales - Nominal, Ordinal, Interval , Ratio & their
characteristics
Management Decision Problem Vs.
Marketing Research Problem
SPSS - An Introduction
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Statistical Methods
•Descriptive Statistics
Collecting and Describing Data.
•Inferential Statistics
Making Decisions based on Sample Data.
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Descriptive Statistics
Estimation
Hypothesis Testing
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Some Definitions
A Population (or universe) is the totality of items or things under
consideration.
A Sample is the portion of the population that is computed to describe a
characteristic of the entire population.
A Parameter is a summary measure that is computed to describe a
characteristic of an entire population.
A Statistic is summary measure that is computed to describe a characteristic
from only a sample population.
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Reasons for obtaining Data
Data are needed to provide the necessary input to a survey.
Data are needed to measure performance of an ongoing service or
production process.
Data are needed to evaluate conformance to standards.
Data are needed to assist in formulating alternative course of
action in a decision making process.
Data are needed to satisfy our curiosity.
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Primary and Secondary Data
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Basic Descriptive Statistics
Central Tendency
Dispersion
Skewness
Kurtosis
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Summary Measures
Summary Measures
Standard Deviation
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Central Tendency & Dispersion
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Contd.
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The Shape of a Frequency The Shape of a Frequency
Curve Curve
Skewness Kurtosis
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Continuous Random Variable
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Types of Variables
A variable is a characteristics of an individual or object that can be
measured.
There are two types of variables-Qualitative & Quantitative.
Qualitative Variables are those variables which differ in kind rather than
degree. These could be measured on nominal or ordinal scale.
The Nominal scale indicates categorizing into groups or classes.
Example - gender, religion, race, color & occupation
The Ordinal scale indicates ordering of items.
Example agreement disagreement scales(Likert Scale)
Qualitative data could be dichotomous in which there are two categories (gender)
or multinomial in there are more than two variables (geographic region).
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Quantitative Variables are those variables which differ in degree rather than
kind. These can be measured on interval or ratio scales
Interval scales indicates rank and distance from a arbitrary zero.
Example- temperature, examination scores.
Ratio scale indicates rank & distance from a natural zero
Example- height, monthly consumption, annual budget.
SPSS does not differentiate between interval & ratio scale and lists them under label
Scale.
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Characteristics of Normal Distribution
Center of distribution is .
Spread is determined by .
Most values fall around the mean, but some values are smaller and
some are larger.
The points where there is a change in curvature is one Standard
Deviation on either side of the mean.
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The Normal Distribution
The mean and standard deviation affect the flatness and center of the
curve, but not the basic shape
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Excel for Data Analysis
How to add Analysis Tool pack for data analysis:
Excel -File –Option-Add in-Excel Add-ins-Go-Analysis Tool pack-OK
How to obtain Descriptive Statistics of data:
Data-data analysis – Descriptive Statistics-Ok-Input Range-Summary
Statistics-Out put Range-OK
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Inferential Statistics
Some Important Terms
Hypothesis An assumption or speculation we make about the Population
Parameter.
Null Hypothesis It is hypothesis or assumption about the Population Parameter
we wish to test, usually an assumption of status quo.
Alternative Hypothesis The conclusion we accept when the data fails to support
the Null hypothesis.
Critical Value The value of standard statistic ( Z or t) beyond which we reject the
Null hypothesis, the boundary between the acceptance and rejection region.
Significance Level A value indicating the percentage of sample values that is
outside certain limits, assuming the null hypothesis is correct ,that is the
probability of rejecting the null hypothesis when it is true.
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Some Important Terms-contd.
Type I Error: Rejecting Null hypothesis when it is true
Type II Error: Accepting Null hypothesis when it is false
Alpha α The Probability of Type I Error
Beta β The Probability of type II Error.
Power of Hypothesis Test 1- β
The probability of rejecting Null hypothesis when it is false ,that is ,a measure
of how well the hypothesis test is working.
One tailed test A hypothesis test when there is only one rejection region.
Two tailed test A test involving two rejection regions.
What is Central Limit Theorem??
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Errors in Making Decisions
Type I Error
Rejects a true Null Hypothesis
Probability of Type I Error is called level of significance α.
It is set by the researcher
Has serious consequences
Type II Error
Fails to reject a false Null Hypothesis
Probability of Type II Error is β
Power of the test is (1-β)
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Errors in Making Decisions
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Result Probabilities
H0: Innocent
Do Not
Type II
Innocent Correct Error Reject 1-α
Error ( b )
H 0
Type I
Reject Power
Guilty Error Correct Error
H 0 (1 - b )
(a )
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Testing of Hypothesis
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Examples of Testing of Hypothesis
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Human Resource : The HR department wants to evaluate impact of 360
degree feedback system on employees’ performance.
Quality Control : The Quality Control department wants to check
whether average number of defects are within the prescribed limits.
Economics: Policy makers wishes to know performance of “Start Ups”
under Make in India program.
Research: A scientist want to compare productivity of cotton grown by
genetically modified seed & normal variety of seeds.
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Steps for Hypothesis Testing
Step 1: State null and alternate hypotheses
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One-tail Z Test for Mean
(σ Known)
Assumptions
Population is Normally distributed
If not normal, requires large samples
Null hypothesis has < or > sign only
Z - test statistic
X X X
Z
X / n
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t Test: σ Unknown
Assumption
Population is Normally distributed
t - test statistic with n-1 degrees of freedom
n <30
X
t
S/ n
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Management Decision Problem & Research Problem
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State the Research Problem for the following Management
Decision Problem- Exercise
1. Should new product be introduced?
2. Should an advertising campaign that has run for three years be changed?
3. Should the price of the brand be increased?
4. Should the price be cut in response to a price-cut by a competitor?
5. Should the product ‘X’ be introduced in the market?
6. What should be done to increase the relative market share of product ‘Y’?
7. Should the in-store promotion for an existing product line be increased?
8. What pricing strategy should be adopted for a new product?
9. Should the compensation package be changed to motivate the sales force
better?
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Management Decision Problem Vs.
Marketing Research Problem E 6/11/22
Management Decision Problem Marketing Research Problem
Should a new product be To determine consumer preferences and purchase
introduced? intentions for the proposed new product.
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Management Decision Problem Marketing Research Problem
Should the price be cut in response to a Determine the buyer- behavior at various
price-cut by a competitor? price levels
Should the product ‘X’ be Assess the probable market size and share
introduced in the market? for product ‘X’.
What should be done to increase the Determine the strengths and weaknesses
relative market share of product ‘Y’? of ‘Y’ vis-à-vis those of the competitors
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Research Questions and Hypotheses
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Department Store Project
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Research Question and Hypothesis- Exercise
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At United, Food is Uniting the Airline with Travelers
United Airlines, as other major airlines, had to deal with passenger loyalty
(management decision problem: how to attract more and more loyal passengers).
The broad marketing research problem was to identify the factors that influence
loyalty of airline travelers.
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At United, Food is Uniting the Airline with Travelers
The basic answer is to improve service. Exploratory research, theoretical
framework, and empirical evidence revealed that the consumers’ choice of an
airline is influenced by: safety, price of the ticket, frequent-flyer program,
convenience of scheduling and brand name.
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At United, Food is Uniting the Airline with Travelers
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At United, Food is Uniting the Airline with Travelers
Secondary data, like the J. D Power & Associates' survey on "current and
future trends in airline food industry," indicated that "food service is a major
contributor to customers’ loyalty." This survey also emphasized the
importance of food brands.
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At United, Food is Uniting the Airline with Travelers
The airline's Marketrak survey informed United Airlines that "customers wanted
more varied and up-to-date food.”
The following research questions and hypotheses may be posed.
RQ1 How important is food for airline customers?
H1: Food is an important factor for airline travelers.
H2: Travelers value branded food.
H3: Travelers prefer larger food portions, but with consistent quality.
H4: Travelers prefer exotic food.
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At United, Food is Uniting the Airline with Travelers
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At United, Food is Uniting the Airline with Travelers
This kind of research helped United Airlines to define their marketing research problem, and develop the
approach. Focus groups and surveys were conducted to check customers' perceptions of food in United
Airlines' aircraft. The results provided support for all the hypotheses (H1 to H4). United Airlines then made
a few changes: new "culinary menus," larger portions of food, new coffee, and branded products (e.g.,
Godiva chocolates). This resulted in better service, increasing customer satisfaction and fostering loyalty.
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Example: United Airlines
Components
1 2 3 4 5
Large Size Portions .859 .1 56 8.363E-02 .1 24 .262
Quality of Food .729 .274 .350 .1 52 7.71 6E-02
Speed of Service .204 .862 7.256E-04 .284 .1 47
. Friendly Employees-Staff .220 .75 0 .41 9 -.1 22 .1 75
Reasonable Prices .246 .1 65 .853 .242 .1 99
Conveniently Located .1 70 .11 6 .1 85 .928 .11 8
Menu Variety .255 .21 5 .1 96 .1 34 .9 04
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SPSS
Statistical Package for the Social Sciences
22.0
SPSS - An Introduction
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SPSS-what does it do?
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Features
SPSS can take data from almost any type of file and use them to generate
tabulated reports, charts, and plots of distributions and trends,
Descriptive Statistics, and conduct complex statistical analyses.
SPSS for Windows can read data files from a variety of file formats
including Excel and SAS ( Business Analytics soft ware).
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The User Interface to SPSS/Windows
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This provides view about
the data.
This view provides a platform to
define variables and their
characteristics.
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The Variable View …
This view is used to define a variable.
1. Its name.
2. Type
3. Width
4. Decimals
5. Labels
6. Values
7. Missing
8. Columns
9. Align
10. Measure
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This view is used to enter
and edit data.
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Menus
Data
Transform
Analyze
Graphs
Utilities
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SPSS Features - What it could do.
SPSS in brief will help us to:
Manage data
Transform data
Analyze data
Present data (graphs and tables)
Measurement and Scaling
Measurement and Scaling
Measurement is the assignment of numbers or other symbols to measure
characteristics of objects according to set rules.
Assignment of number permits Statistical Analysis
Numbers helps to understand measurement rules and results.
The process of assigning numbers is one to one (isomorphic) . There is one to one
correspondence between number and characteristics to be measured.
Scaling involves the generation of a continuum upon which measured objects are
located.
Scaling is extension of measurement.
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EXAMPLE
Consider a scale from 1 to 10 for locating consumers according to the
characteristics ‘attitude towards department stores’. Each respondent is
assigned a number from 1 to 10 indicating the degree of (un) favorableness,
with 1=extremely unfavorable and 10=extremely favorable.
Measurement is actual assignment of numbers from 1 to 10 to each
respondent.
Scaling is the process of placing the respondents on a continuum with respect
to their attitude towards department stores.
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Scale
A scale is any series of items that are progressively arranged
according to value or magnitude into which an item can be placed
according to its quantification.
A scale is a continuous spectrum or series of categories.
The purpose of scaling is to represent quantitatively, an item’s, a
person’s, or an event’s place in the spectrum.
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Scale
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Scale Properties
There are four primary scales of measurements in increasing order of
their properties:
Nominal: Uniquely Classifies
Ordinal: Preserves Order
Interval: Equal Intervals
Ratio: Natural Zero
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Example Primary Scales of Measurements
Scale
Runners 7 11 3
Ordinal Rank Order of Winner Finish
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Nominal Scale
Nominal Scale
A scale whose numbers serves only as labels or tags for identifying and classifying objects
with a strict one to one correspondence between the numbers and objects.
Example- Numbers assigned to football players.
Nominal Scales are used for identifying respondents, brands, attributes and stores etc.
The numbers in a nominal scale don't reflect the amount of the characteristic possessed
by the objects.
IT UNIQUELY CLASSIFIES
Numbers & letters are assigned to objects
Roll numbers:
Pooja # MBA012
Navdeep # MBAA02
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Ordinal Scale
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Ordinal Scale Properties
Uniquely classifies
Preserves order
Arrangement of objects is according to their magnitude.
Example
Excellent , Good, Fair (importance of object)
Excellent is better than Good but we do not know by how much.
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Interval Scale
A scale in which the numbers are used to rate objects such that numerically
equal distances on the scale represent equal distance in the characteristic
being measured.
An interval scale contains all information of an ordinal scale ,but it also allows
to compare the differences between objects.
There is a constant or equal interval between scale values.
The difference 1 between 2 is the same as the difference between 2 and 3, which is same as
difference between 5 and 6.
Example - temperature scale, attitudinal data, most admired company.
Interval and Nominal Scale is used for Qualitative data.
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Interval Scale Properties
Uniquely classifies
Preserves order
Equal intervals
Consumer Price Index (base 100)
Fahrenheit temperature
F=(9/5)*C+32
Location of zero point is not fixed .Both zero point and unit of measurement are
arbitrary.
Any linear transformation y=a+bx will preserve properties of scale, x is original
scale value ,y is transformed scale value.
Two interval scales that rate objects A,B,C,D as 1,2,3,4 or 22,24,26 and 28 are equivalent.
(use a=20,b=2).Zero has no value. Ratio between D to B values changes from 2:1 to
become 7:6
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Ratio Scale
It is highest scale as it possesses properties of the Nominal, Ordinal and
Interval scale in addition it has an absolute zero point.
It allows researcher to identify or classify objects, rank order the objects and
compare intervals or difference.
It is also meaningful to compute ratios of scale values.
The difference between 2 and 5 is the same as the difference between 14 and
17 but also 14 is 7 times large as 2 in the absolute terms
Example of ratio scale: height, weight, age and money
In marketing sales, costs, market share, and number of customers are variables
on a ratio scale.
It allows transformation of y=bx, b>0
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Ratio Scale Properties
Uniquely Classifies
Preserves Order
Equal Intervals
Natural Zero
Weight and Distance
Temperature (Kelvin scale)
Used for Quantitative data
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Scaling Techniques
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TYPES OF SCALES
Semantic Seven-point scale with bipolar labels Brand, product Versatile Controversy as to
and company image whether the dates are
Differential interval
Stapel Scale Unipolar ten point scale,-5 to +5 Measurement of Easy to construct; Confusing and difficult
without a neutral point (zero) attitudes and images administered over to apply.
telephone
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Thanks