Chapter 12

Marketing Research
Eighth Edition
Chapter 12
Using Descriptive
Analysis,
Performing
Population
Estimates and
Testing Hypotheses
Copyright © 2017, 2014, 2010 Pearson Education, Inc. All Rights Reserved.
Learning Objectives
In this chapter you will learn:
12.1 What the different types of statistical analyses used in marketing research are
12.2 Descriptive analysis and how to do it
12.3 When to use a particular descriptive analysis measure
12.4 How to perform descriptive analyses with SPSS
12.5 How to report descriptive statistics to clients
12.6 The difference between sample statistics and population parameters
12.7 How to estimate the population percent or mean with a confidence interval
12.8 How to obtain confidence intervals with SPSS
12.9 How to report confidence intervals to clients
12.10 What hypothesis tests are and how to perform them
12.11 How to report hypothesis tests to clients
“Where We Are”
1. Establish the need for marketing research.
2. Define the problem.
3. Establish research objectives.
4. Determine research design.
5. Identify information types and sources.
6. Determine methods of accessing data.
7. Design data collection forms.
8. Determine the sample plan and size.
9. Collect data.
10. Analyze data.
11. Prepare and present the final research report.
Types of Statistical Analyses Used in
Marketing Research
• Descriptive analysis
• Inferential analysis
• Differences analysis
• Associative analysis
• Predictive analysis
Descriptive Analysis
Used by marketing researchers to describe the
sample dataset in such a way as to portray the
“typical” respondent and to reveal the general pattern of
responses.
Inference Analysis
• Used when marketing researchers use statistical
procedures to generalize the results of the sample
to the target population it represents.
Difference Analysis
• Used to determine the degree to which real and
generalizable differences exist in the population to
help the manager make an enlightened decision on
which advertising theme to use.
Association Analysis
• Investigates if and how two variables are related
Relationship Analysis
• Statistical procedures and models to help allow
insight into multiple relationships among
variables
Table 12.1 Five Types of Statistical
Analyses Used by Marketing Researchers
Type Description Example Statistical Concepts
Descriptive Analysis Summarizes basic findings Describes the typical Mean, median, mode,
( Chapter 12 ) for the sample respondent, describes how frequency distribution,
similar respondents are to range, standard deviation
the typical respondent
Inference Analysis Determines population Estimates population Standard error, null
( Chapter 12 ) parameters, tests values hypothesis
hypotheses
Difference Analysis Determines if differences Evaluates the statistical t test of differences,
( Chapter 13 ) exist significance of difference in analysis of variance
the means of two groups in
a sample
Association Analysis Determines connections Determines if two variables Correlation, cross-
( Chapter 14 ) are related in a systematic tabulation
way
Relationships Analysis Finds complex Determines how several Multiple regression
( Chapter 15 ) relationships independent variables are
for the variables in the related to a key dependent
dataset variable
Understanding Data Via Descriptive
Analysis
Two sets of measures are used extensively to describe
the information obtained in a sample.
• Measures of central tendency or measures that
describe the “typical” respondent or response
• Measures of variability or measures that describe
how similar (dissimilar) respondents or responses are
to (from) “typical” respondents or responses
Summarizing the “Typical”
Respondent
Measures of central tendency:
• Mode: a descriptive analysis measure defined as that
value in a string of numbers that occurs most often.
• Median: expresses that value whose occurrence lies in the
middle of an ordered set of values.
• Mean (or average):
Measures of Variability: Visualizing
the Diversity of Respondents (1 of 4)
• All measures of variability are concerned with
depicting the “typical” difference between the values in
a set of values.
• There are three measures of variability:
– Frequency distribution
– Range
– Standard deviation
• A frequency distribution is a tabulation of the
number of times that each different value appears in a
particular set of values.
• The frequency for each value divided by the total
number of observations for all values, resulting in a
percent, called a percentage distribution.
• Range: identifies the distance between lowest value
(minimum) and the highest value (maximum) in an
ordered set of values.
• Standard deviation: indicates the degree of variation
or diversity in the values in such a way as to be
translatable into a normal or bell-shaped curve
distribution.
Formula for a standard deviation
( X
i 1
i  X )2
Standard deviation (s ) =
n 1
where
n = the number of cases
X i = each individual value
X = the mean (average)
 = signifies that all the X i values are summed
Figure 12.1 Normal Curve
Interpretation of Standard Deviation
Table 12.2 What Descriptive Statistic
to Use When
Central Tendency
Measurement (Most Typical Variability (Similarity
Example Question Level Response) of Responses)
What is your gender? Nominal scale Mode Frequency and/or
percentage
distribution
Rank these five brands from Ordinal scale Median Cumulative
your first choice to your fifth percentage
choice. distribution
On a scale of 1 to 5, how does Interval scale Mean Standard deviation
“Starbucks” rate on variety of and/or range
its coffee drinks?
About how many times did you Ratio scale Mean Standard deviation
buy fast food for lunch last and/or range
week?
Figure 12.2 IBM SPSS Clickstream to Obtain a
Frequency Distribution and the Mode
Source: Reprint Courtesy of International Business Machines Corporation, © International Business Machines
Corporation.
Figure 12.3 IBM SPSS Output for a
Frequency Distribution and the Mode
Corporation.
Figure 12.4 IBM SPSS Clickstream to Obtain
a Mean, Standard Deviation, and Range
Corporation.
Mean, Standard Deviation and Range
Corporation.
Reporting Scale Data
Descriptive For a Standard Scale Comment
Measure Variable Table…
Average (mean) Absolutely include, as Place averages in a column very
averages are the most close to the variable descriptions
commonly used central and arrange variables in
tendency measure for ascending or descending order of
scale data. the averages.
Median, mode Do not include. Managers do not relate to
medians or modes of scale data.
Standard Typically include in the If most standard deviations are
deviation table. approximately equal, do not
include as redundancy would
result.
Minimum, Include if the data have Reporting the same value several
Maximum several different values. times is redundant.
Example Scale Variables Table
Performance of the Subshop
Feature of the Subshop Average* Standard Deviation
Assortment of breads 4.5 0.5
Variety of subs 4.3 0.7
Variety of toppings 4.0 0.8
Freshness of bread 3.9 0.8
Freshness of toppings 3.8 0.7
Promptness of service 3.7 1.0
Cleanliness of facility 3.7 0.9
Value for the price 3.6 1.1
Generosity of toppings 3.5 1.0
Distinctive taste 3.2 1.3
*Based on a scale where 1 = “poor” and 5 = “excellent.”
Reporting Nominal or Categorical
data
For a Standard Categorical
Descriptive Measure Variable Table… Comment
Frequencies, Include if the researcher wants Place frequencies in a column very close
frequency the reader to note something to the variable group labels (such as
distribution about the sample, such as a male, female). If appropriate, arrange
very small sample in which the categories in ascending or
percentages are greatly descending order of the
affected by a few respondents. percentages. Include a total of the
frequencies at the bottom.
Percents, percent Absolutely include, as Place percentages in a column close to
distribution percentages are the most the variable group labels (such as male,
commonly used descriptive female) and beside the frequencies, if
measure for nominal data. used. If appropriate, arrange the
categories in ascending or descending
order of the percentages. Include a
100% total at the bottom.
Mode Highlight, but if obvious do not The largest percentage group is usually
report in the table. readily apparent in a percent distribution,
especially if ascending or descending
order can be used.
Sample Nominal or Categorical
Variable Table
What Time in the Day Do You Typically Visit the Subshop?
Time Period Percent
Before 12 p.m. 5.3%
Between 12 p.m. and 3 p.m. 56.8%
Between 3 p.m. and 6 p.m. 24.2%
After 6 p.m. 13.7%
Total 100.0%
Statistical Inference
• Statistics are sample values
• Parameters are corresponding population values
• Statistical inference is the set of procedures used in
which sample statistics are used to estimate
population parameters
Two Types of Statistical Inference
• A parameter estimate is used to approximate a
parameter using confidence intervals
• Hypothesis testing is used to compare sample
statistics to hypothesized parameter values.
Parameter Estimation: Estimating the
Population Percent or Mean
• Parameter estimation is the process of using sample
information to compute an interval that describes the
range of a parameter such as the population mean or
the population percentage.
• It involves the use of three values:
– The sample statistic
– The standard error of the statistic
– The desired level of confidence
Statistical Inference: Sample
Statistics and Population Parameters
• A sample statistic is usually a mean or percentage.
• Standard error is the measure of variability in the
sampling distribution.
• A confidence interval is the degree of accuracy
desired by the researcher stated in the form of a
range with an upper and lower boundary.
Confidence Intervals (1 of 2)
Formula for confidence interval for a mean
x  z s x
where
x  sample mean
sx  standard error of the mean
Formula for confidence interval for a percentage
p  z s p
where
p  sample percentage
sp  standard error of the percentage
z  z value for 95% or 99% level of confidence
Figure 12.6 Variability Found in the Sample
Directly Affects the Standard Error
Table 12.3 How to Compute a Confidence
Interval for a Mean or a Percentage
Step 1: Find the sample statistic, either the mean,
Step 2: Identify the sample size, n .
Step 3: Determine the amount of variability found in the sample in the form of
standard error of the mean,
sx
s
sx 
n
or standard error of the percentage, sp.
pq
sp 
n
Step 4: Decide on the desired level of confidence to determine the value for z :
z .95 (1.96) or z .99 (2.58).
Step 5: Compute your (95%) confidence interval as x  1.96s x or p  1.96s p.
Confidence Intervals (2 of 2)
Here are examples of confidence interval computation with a mean and with a percentage.
Calculation of a 95% Confidence Calculation of a 95% Confidence
Interval for a Mean Interval for a Percentage
x  1.96  s x p  1.96  sp
s pq
x  1.96  p  1.96 
n n
20 50  50
45  1.96  50  1.96 
100 100
45  1.96  2 50  1.96  5
50  9.8
45  3.9
40.2%  59.8%
41.1  48.9 minutes
where
where
p  50
mean  45
q  50
std.dev.  20 n  100
Figure 12.7 IBM SPSS Clickstream to Obtain
a 95% Confidence Interval for a Mean
Source: Reprint Courtesy of International Business Machines Corporation, © International Business

Machines Corporation.
95% Confidence Interval for a Mean

Hypothesis Tests
• Tests of an hypothesized population parameter value:
– Test of an hypothesis about a percent
– Test of an hypothesis about a mean
• The crux of statistical hypothesis testing is the
sampling distribution concept.
Test of the Hypothesized Population
Parameter Value (1 of 2)
Formula for test of a hypothesis about a percent
p  H
z
sx
where
p = sample percentage
 H = hypothesized population percentage
sp = standard error of the percentage
Test of the Hypothesized Population
Parameter Value (2 of 2)
Formula for test of a hypothesis about a mean
x  H
z
sX
where
x = sample mean
 H = hypothesized population mean
s X = standard error of the mean
Figure 12.9 Sample Findings Support
the Hypothesis in This Example
Table 12.4 The Five Basic Steps
Involved in Hypothesis Testing
Step 1: Begin with a statement about what you believe exists in the population,
that is, the population mean ( H ) or percentage ( H ).
Step 2: Draw a random sample and determine the sample mean ( x ) or percent ( p).
Step 3: Compare the statistic to the hypothesized parameter; divide by standard error to
compute z.
x  H p  H
z z
sx sp
Step 4: If z is within If z is within  1.96 /  2.58 standard errors, it supports the

hypothesis at the 95%/99% level of confidence. (Alternatively, the exact
degree of support can be assessed on SPSS output.)
Step 5: If the sample does not support the hypothesis, revise the hypothesis to be
consistent with the sample’s statistic using the confidence interval formula.
Figure 12.10 IBM SPSS Clickstream
to Test a Hypothesis About a Mean

Figure 12.11 IBM SPSS Output for the
test of a Hypothesis About a Mean

Marketing Research Insight 12.3
Practical Research
Guidelines for the Presentation of Hypothesis Tests
The step-by-step approach to the presentation of hypothesis tests is as follows.
Step 1: State the hypothesis.
Step 2: Perform appropriate hypothesis test computations. That is, if the

hypothesis test is stated as a percent, the percent formula should be used; if it is
stated as an average, the average formula should be used.
Step 3: Determine if the hypothesis is supported or not supported by comparing

the computed z value to the critical z value (normally 1.96 for a 95% level of
confidence).
Step 4: If the hypothesis is not supported, compute confidence intervals to

provide the client with the appropriate confidence intervals.
These steps are followed for each explicitly stated hypothesis. An example of
how to present hypothesis tests in a research report follows:
Results of Hypothesis Tests
Hypothesis Result of Test
Hypothesis 1: 60% of This hypothesis was supported at
consumers buy from a fastfood the 95% level of confidence by the
location at least one time findings of the survey.
per month.
Hypothesis 2: In a typical The average was found to be

month, those consumers $31.87, and the hypothesis of
who purchase from a fastfood $45 was not supported. The 95%
outlet spend about confidence interval computations
$45 for food, drinks, determined the range to be
snacks, etc. between $28.50 and $35.24.
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Marketing Research

z  z value for 95% or 99% level of confidence

Source: Reprint Courtesy of International Business Machines Corporation, © International Business

Source: Reprint Courtesy of International Business Machines Corporation, © International Business

Step 4: If z is within If z is within  1.96 /  2.58 standard errors, it supports the

Source: Reprint Courtesy of International Business Machines Corporation, © International Business

Source: Reprint Courtesy of International Business Machines Corporation, © International Business

Step 1: State the hypothesis.

Step 2: Perform appropriate hypothesis test computations. That is, if the

Step 3: Determine if the hypothesis is supported or not supported by comparing

Step 4: If the hypothesis is not supported, compute confidence intervals to

Hypothesis 2: In a typical The average was found to be

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