MARKETING RESEARCH

Correlation and Regression

Topics to be covered:

 Data Requirement of Correlation and Regression

 Conducting Correlation Analysis
 Conducting Regression Analysis
Data Requirement of Correlation and Regression

 Both the independent and the dependent variables must be metric for
the purpose of conducting the correlation and regression analysis.
(continued…)

 Consider the following data set: A multinational company currently

operating in Bangladesh collected the following data [all numbers are in
the millions of dollars]:
Conducting Correlation Analysis

The following steps will be followed for the purpose of

conducting the correlation analysis:
 Calculate the product moment correlation
 Interpret the product moment correlation
 Test the associated hypothesis
 Determine the strength of association
 Interpret the result
Class Exercise: Correlation Analysis

 A multinational company currently operating in Bangladesh collected the

following data [all numbers are in the millions of dollars]:
(continued…)
[a] What will be the appropriate statistical analysis if the researcher is
interested to examine if there is any relationship between the yearly
promotional expenditures and yearly profits? Explain.
[b] Conduct your suggested analysis.
Conducting Regression Analysis: A Class Exercise

 The data related to total promotional expenditure (in millions)

and yearly sales (in millions) are given in the table given
below:
(continued…)
 Management is interested to know whether promotional expenditure is
influencing the yearly sales. What type of analysis would you suggest?
Why?
 Develop a bivariate regression equation and interpret it.
 Forecast the yearly sales when total promotional expenditure is set as
7 million.
 Estimate the yearly sales when total promotional expenditure is set as
3 million and calculate and interpret the residual value.
 Develop the overall hypothesis and test it by relevant statistics.
 Develop and the partial hypothesis and test it by relevant statistics.
 Interpret the coefficient of determination.
Supporting Statistical Outputs (SPSS)
Thank You!