Marketing Research 8th Edition

Aaker, Kumar, Day

Marketing Research
Kumar, Aaker Day
Eighth Edition
Instructors Presentation Slides
Marketing Research 8th Edition
Aaker, Kumar, Day
Chapter Eighteen
Hypothesis Testing:
Means and Proportions
Marketing Research 8th Edition
Aaker, Kumar, Day
Hypothesis Testing For Differences
Between Means
Commonly used in experimental research
Statistical technique used is analysis Of variance
(ANOVA)
Hypothesis Testing Criteria Depends on
Whether the samples are obtained from different or related
populations
Whether the population is known on not known
If the population standard deviation is not known, whether
they can be assumed to be equal or not
Marketing Research 8th Edition
Aaker, Kumar, Day
The Probability Values (P-value)
Approach to Hypothesis Testing
P-value provides researcher with alternative
method of testing hypothesis without pre-
specifying o
Largest level of significance at which we would
not reject h
o

Difference Between Using o and p-value
Hypothesis testing with a pre-specified o
Researcher is trying to determine, "is the probability
of what has been observed less than o?"
Reject or fail to reject h
o
accordingly
Marketing Research 8th Edition
Aaker, Kumar, Day
The Probability Values (P-value)
Approach to Hypothesis Testing
(Contd.)
Using the p-Value
Researcher can determine "how unlikely is the
result that has been observed?"
Decide whether to reject or fail to reject h
o
without
being bound by a pre-specified significance level
In general, the smaller the p-value, the greater is
the researcher's confidence in sample findings
P-value is generally sensitive to sample size
A large sample should yield a low p-value
P-value can report the impact of the sample size
on the reliability of the results
Marketing Research 8th Edition
Aaker, Kumar, Day
Hypothesis Testing About
a Single Mean - Step-by-Step
1) Formulate Hypotheses
2) Select appropriate formula
3) Select significance level
4) Calculate z or t statistic
5) Calculate degrees of freedom (for t-test)
6) Obtain critical value from table
7) Make decision regarding the Null-hypothesis
Marketing Research 8th Edition
Aaker, Kumar, Day
Hypothesis Testing About
a Single Mean - Example 1

H
o
: = 5000 (hypothesized value of population)
H
a
: = 5000 (alternative hypothesis)
n = 100
X = 4960
o = 250
o = 0.05

Rejection rule: if |z
calc
| > z
o/2
then reject H
o
.
Marketing Research 8th Edition
Aaker, Kumar, Day
Hypothesis Testing About
a Single Mean - Example 2
H
o
: = 1000 (hypothesized value of population)
H
a
: = 1000 (alternative hypothesis)
n = 12
X = 1087.1
s = 191.6
o = 0.01

Rejection rule: if |t
calc
| > t
df, o/2
then reject H
o
.
Marketing Research 8th Edition
Aaker, Kumar, Day
Hypothesis Testing About
a Single Mean - Example 3
H
o
: s 1000 (hypothesized value of population)
H
a
: > 1000 (alternative hypothesis)
n = 12
X = 1087.1
s = 191.6
o = 0.05

Rejection rule: if t
calc
> t
df, o
then reject H
o
.
Marketing Research 8th Edition
Aaker, Kumar, Day
Confidence Intervals
Hypothesis testing and Confidence Intervals
are two sides of the same coin.



interval
estimate of
x
s
X
t
) (
=
=
x
ts X
Marketing Research 8th Edition
Aaker, Kumar, Day
Confidence Interval Estimation


If o = .05 then,


Problem:
o = .01 n = 75 o =
.01

Since CI is for both sides, z-value is got for o/2 = .005
Z o/2 = 2.58



Test the hypothesis that the true mean weight of the
Hawkeyes football team is greater than or equal to 300
pounds with o = .05
Marketing Research 8th Edition
Aaker, Kumar, Day
H
0
: u
W
> 300
H
1
: u
W
< 300




At o = 0.05, CV
Z
= -1.645 (for a one-tailed test)
Since Z
ts
falls in the critical region

We ______________________ the null hypothesis
Marketing Research 8th Edition
Aaker, Kumar, Day
Test the hypothesis that the true mean weight of the Hawkeyes
football team is equal to 286 pounds with o = 0.01

H
0
: u
W
= 286
u
W
= 286



AT o = .01

CV
Z
= 2.58

Since Z
ts
< Cv
Z
we __________________ the null hypothesis
Marketing Research 8th Edition
Aaker, Kumar, Day




H
0
: P
A
= P
B

H
A
: P
A
not equal to P
B



Chain N Proportion of Stores
Open for 24 hours
A 40 -45
B 75 -40
Marketing Research 8th Edition
Aaker, Kumar, Day
And

= weighted average of sample proportions
Computation of t
ts
would proceed as follows:
df = n
1
+n
2
-2
(n
1
-1) + (n
2
-1)
o= .05
df = 113
Marketing Research 8th Edition
Aaker, Kumar, Day
Since

then
and
-1.96
.025
+1.96
.025
- +
Marketing Research 8th Edition
Aaker, Kumar, Day
Descriptive Statistics for two samples of students, liberal arts majors (n = 317)
and engineering majors (n = 592) include




The smaller the mean, the more students agree with the statement. The formula
for a t-test of mean differences for independent samples is



With being the standard error of the mean difference



Where

Is a weighted average of sample standard deviations. In this situation the
hypothesis:
Liberal arts majors Engineering majors
X 2.59 2.29
S 1.00 1.10
Marketing Research 8th Edition
Aaker, Kumar, Day



Pooled Std. dev
T
ts
= 2.59-2.29 / .07 = .30 / .07 = 4.29
= 1.07
Marketing Research 8th Edition
Aaker, Kumar, Day
Statistical techniques

Analysis of Variance (ANOVA)

Correlation Analysis

Regression Analysis
Marketing Research 8th Edition
Aaker, Kumar, Day
Analysis of Variance

ANOVA mainly used for analysis of
experimental data

Ratio of between-treatment variance
and within- treatment variance


Marketing Research 8th Edition
Aaker, Kumar, Day
Analysis of Variance (ANOVA)
Response variable - dependent variable (Y)
Factor(s) - independent variables (X)
Treatments - different levels of factors
(r
1
, r
2
, r
3
, )
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor Analysis of Variance
Studies the effect of 'r' treatments on one response variable
Determine whether or not there are any statistically
significant differences between the treatment means
1
,

2
,...
R

H
o
: all treatments have same effect on mean responses
H
1
: At least 2 of
1
,
2
...
r
are different
Marketing Research 8th Edition
Aaker, Kumar, Day
Example
Product Sales
1 2 3 4 5 Total X
p

39 8 12 10 9 11 50 10
Price
Level 44 7 10 6 8 9 40 8

49 4 8 7 9 7 35 7

Overall sample mean: X = 8.333
Overall sample size: n = 15
No. of observations per price level: n
p
= 5
Marketing Research 8th Edition
Aaker, Kumar, Day
Example
Grand Mean
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor ANOVA -
Intuitively
If: Between Treatment Variance
Within Treatment Variance

is large then there are differences between treatments
is small then there are no differences between treatments

To Test Hypothesis, Compute the Ratio Between the
"Between Treatment" Variance and "Within
Treatment" Variance
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor ANOVA Table
Source of Variation Degrees of Mean Sum F-ratio
Variation (SS) Freedom of Squares

Between SS
r
r-1 MSS
r
=SS
r
/r-1 MSS
r

(price levels) MSS
u


Within SS
u
n-r MSS
u
=SS
u
/n-r
(price levels)

Total SS
t
n-1
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor Analysis of Variance
Between Treatment Variance
SS
r
= E n
p
(X
p
- X)
2
= 23.3

Within-treatment variance
SS
u
= E E (X
ip
- X
p
)
2
= 34

Where
SS
r
= treatment sums of squares r = number of
groups
n
p
= sample size in group p X
p
= mean of
group p

X = overall mean X
ip
=sales at store i at
level p
r
i=1 p=1
n
p
r
=
=
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor Analysis of
Variance
Between variance estimate (MSS
r
)
MSS
r
= SS
r
/(r-1) = 23.3/2 = 11.65

Within variance estimate (MSS
u
)
MSS
u
= SS
u
/(n-r) = 34/12 = 2.8

Where
n = total sample size r = number of groups
Marketing Research 8th Edition
Aaker, Kumar, Day
One - Factor Analysis of
Variance
Total variation (SS
t
): SS
t
= SS
r
+ SS
u
= 23.3+34 = 57.3


F-statistic: F = MSS
r
/ MSS
u
= 11.65/2.8 = 4.16

DF: (r-1), (n-r) = 2, 12

Critical value from table: CV
(o, df)
= 3.89