T.

Ajaay
MBA23046
Section A
Marketing Management II

Case:
An oil company has introduced a new brand of lubricant in its outlets in three major cities:
Chandigarh, Delhi, and Jaipur. However, they are not sure how the new brand is selling at the
three places since there is a lot of difference in the consumption rate in the three cities. The
company selected 10 outlets in each city and tabulated the data on an average daily sale at
each of the selected outlets.
H0: There is no statistical difference of sales between the Chandigarh, Delhi, and Jaipur

Solution:
The oil company has introduced new lubricant in its outlet and its objective is to
understand the consumption of new lubricant in different cities. The null hypothesis
formulated is such that there is not much difference in sales of new lubricants in different
cities. This can be verified statistically using descriptive analysis of sales in different cities,
levene test to assess homogeneity in variance across cities, ANOVA test to assess the mean of
sales of different cities, and post hoc test analysis to check which pairs of cities have
significant differences in mean sales.

Table 1: Descriptive Analaysis

N Mean Std. Std. 95% Confidence Minim Maxim
Deviation Error Interval for Mean um um
Lower Upper
Bound Bound
Chandig 10 13.7950 1.43109 .45255 12.7713 14.8187 11.00 16.00
arh
10 9.6750 3.39536 1.0737 7.2461 12.1039 6.40 16.50
Delhi
1
Jaipur 10 15.2650 2.87035 .90768 13.2117 17.3183 11.70 21.00
Total 30 12.9117 3.54422 .64708 11.5882 14.2351 6.40 21.00

The average sales in Jaipur (15.265) are higher than Delhi (13.79) and Chandigarh
(9.67). The standard deviation of Delhi (3.39) is larger than Chandigarh (1.43) and Jaipur
(2.87). Delhi (9.76) has least average sales comparatively but higher variability (3.39) as
reflected in standard deviation. Confidence interval of Delhi (12.1039-7.2461 = 4.8578) is
wider than Chandigarh (2.0474) and Jaipur (4.1066). Chandigarh and Jaipur have higher
average sales than the overall average (12.9117), indicating lower sales in Delhi affecting the
sales of the company. These differences need to be further explored to verify statistical
significance.
Table 2: Results of the Levene Test

Test of Homogeneity of Variances

Volum_in_Litre
Levene df1 df2 Sig.
Statistic
3.030 2 27 .065

The measure of differences in variances between the three cities is given by

Levene statistic which is 3.030. The associated p-value is 0.065 for degrees of
freedom df1 = 2 and df2 = 27 which is greater the 0.05 (95% confidence level)
hence we accept the null hypothesis of the Levene test. This implies that
variances in sales are equal across different cities. This inference cannot be
taken solely based on the Levene test, since the significance level is close to
0.05 i.e., in borderline. Hence further analysis is required, hence ANOVA.

Table 3. Results of ANOVA

ANOVA
Volum_in_Litre
Sum of df Mean F Sig.
Squares Square
Between 167.945 2 83.972 11.548 .000
Groups
Within 196.339 27 7.272
Groups
Total 364.283 29

The sum of squares between the groups (167.945) shows the variation in sales
attributed to the different cities. And sum of squares of sales within groups
(196.339) shows variation in sales with each city. The F-statistic is 11.548 with
a corresponding p-value is .000 i.e., negligible significance. Hence, we fail to
accept the null hypothesis. This implies that there is a statistically significant
difference in average sales between the three cities. The assumption of
homogeneity of variances was not violated(as indicated by the Levene test) and
the ANOVA is significant, we must proceed with Post Hoc Analysis - Tukey
HSD test.
 Table 4. Post Hoc Test Analysis
Multiple Comparisons
Dependent Variable: Volum_in_Litre
Tukey HSD
(I) Metro (J) Metro Mean Std. Sig. 95% Confidence
Differenc Error Interval
e (I-J) Lower Upper
Bound Bound
Delhi 4.12000* 1.20597 .006 1.1299 7.1101
Chandigarh
Jaipur -1.47000 1.20597 .453 -4.4601 1.5201
Chandigarh -4.12000* 1.20597 .006 -7.1101 -1.1299
Delhi
Jaipur -5.59000* 1.20597 .000 -8.5801 -2.5999
Chandigarh 1.47000 1.20597 .453 -1.5201 4.4601
Jaipur
Delhi 5.59000* 1.20597 .000 2.5999 8.5801
*. The mean difference is significant at the 0.05 level.

The mean difference is low among the Chandigarh – Jaipur pair (1.47) compared to
Chandigarh – Delhi (4.12) and Jaipur – Delhi (5.59). This is supported by the significance
level which is greater than 0.05 for the Chandigarh – Jaipur pair (0.453), whereas the p-value
is less than 0.05 for the other two pairs.
Summary:
 Jaipur has the highest average sales while Delhi has the lowest.
 Delhi shows higher variability in sales compared to other cities.
 Based on the Levene test, variances are not significantly different between cities.
 Based on ANOVA, there is a significant difference in average sales between at least
two cities.
 Based on Tukey HSD, there is a significant difference in mean sales between the
Chandigarh –Delhi pair and Delhi – Jaipur pair.
Based on ANOVA and Post Hoc Analysis, we fail to accept the null hypothesis of the study.
Hence we conclude that there is significant differences in sales of new lubricant in different
cities.