MARKETING RESEARCH

Analysis of Variance and Covariance

Topics to be covered:

 Data Requirement of One-Way ANOVA

 A Marketing Example of One-Way ANOVA
 The Steps of Conducting the One-Way ANOVA
 Two-Way ANOVA
Data Requirement of One-Way ANOVA

 One-way analysis of variance (ANOVA) can be conducted under the

following conditions:

Independent Variable (Non-metric) → Dependent Metric Variable

 Here the non-metric independent variable will be known as factor and
since we have only one factor in this analysis that is why it is known as
the one-way ANOVA. The number of categories in the factor will be
known as treatment and will be mathematically indicated by C.
A Marketing Example of One-Way ANOVA

Problem: A CMO of a company marketing carbonated soft-drinks has

developed three new flavors of cola and decided to measure the customers’
preference for these three flavors from 12 customers (each flavor will be given to
4 customers) by using 9 point Likert Scale where 1 will indicate least favored
and 9 will indicate most favored. Which test you conduct here?
Solution: Here we can identify the following two variables:

So, one-way ANOVA is the appropriate analysis here.

The Steps of Conducting the One-Way ANOVA

 The procedure for conducting one-way analysis of variance may be

summarized below:
 Identify the Dependent and Independent Variables
 Decompose the Total Variation (Between Variation and Within
Variation: SStotal= SSbetween + SSwithin or mathematically, 𝑆𝑆𝑦 = 𝑆𝑆𝑥 +
𝑆𝑆𝑒𝑟𝑟𝑜𝑟
 Test the Significance (test the associated hypothesis)
 Measure the Effects (measure the strength of association)
 Interpret the Results (interpret the result and report it to the
marketing manager)
Problem: One-Way ANOVA

A CMO of a company marketing carbonated soft-drinks has developed three

new flavors of cola and decided to measure the customers’ preference for these
three flavors from 12 customers (each flavor will be given to 4 customers) by
using 9 point Likert Scale where 1 will indicate least favored and 9 will indicate
most favored. The table shows the data collected from all these customers:

[a] Which analysis would you suggest here? Why?

[b] Conduct your suggested analysis.
Two-Way ANOVA

 Here our discussion will center on the following aspects:

 Data Requirements for Conducting Two-Way ANOVA
 Two-Way ANOVA: A Marketing Example
 Decomposition of Total Variation: A Comparison between
One-Way and Two-Way ANOVA
 Hypotheses to be tested in Two-Way ANOVA
 Problem: Two-Way ANOVA
Data Requirements for Conducting Two-Way ANOVA

 Consider the following diagram to comprehend the data

requirements for conducting two-way ANOVA:
Two-Way ANOVA: A Marketing Example
 Tommy Hilfiger Clothing has collected data from 45
respondents in terms of the following three dimensions:
 Usage: Light User (1), Medium User (2), and Heavy User (3)
 Gender: Female (1) and Male (2)
 Attitude toward Tommy Hilfiger Clothing: Measured by 7-
point Likert Scale (1 = Very Unfavorable, 7 = Very Favorable)
 Problem: Now the Chief Marketing Officer of Tommy Hilfiger
Clothing is interested to know if Gender and Usage may
affect the attitude toward Tommy Hilfiger Clothing. What will
be appropriate statistical analysis here?
(continued …)

 Solutions: Now the given variables can be summarized below:

 Since we have two non-metric independent variables (two factors:

Gender and Usage), and a metric dependent variable (attitude toward
Tommy Hilfiger Clothing), two-way ANOVA will be appropriate
statistical method here.
Decomposition of Total Variation:
A Comparison between One-Way and Two-Way ANOVA

 A comparison of decomposition of total variation between

One-Way ANOVA and Two-Way ANOVA can be presented in
the table below:
Hypotheses to be tested in Two-Way ANOVA

 Here the following hypotheses are usually tested in

conducting Two-Way ANOVA:
 Model Hypothesis
 Interaction Hypothesis
 Main Effect Hypotheses
Problem: Two-Way ANOVA

 Tommy Hilfiger Clothing has collected data from 45

respondents in terms of the following three dimensions:
 Gender: Female (1) and Male (2)
 Usage: Light User (1), Medium User (2), and Heavy User (3)
 Attitude toward Tommy Hilfiger Clothing: Measured by 7-
point Likert Scale (1 = Very Unfavorable, 7 = Very Favorable).
 Now the Chief Marketing Officer of Tommy Hilfiger Clothing is
interested to know if Gender and Usage may affect the
attitude toward Tommy Hilfiger Clothing.
(continued …)
 The statistical output generated by SPSS is shown in the table given below:

 Explain which statistical analysis will be appropriate here.

 Test the associated hypotheses.
 Calculate and interpret the multiple η2 value.
 Calculate and interpret the multiple ω2 value for each of the factor.
Thank You!