Basic Data Analysis: Descriptive Statistics

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• Lesson 5
• Basic Data Analysis Descriptive Statistics
• Qualitative Methodologies Focus Groups
  Observation

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Types of Statistical Analyses Used in Marketing
Research

• Five basic types of statistical analyses
• Descriptive analysis
• Inferential analysis
• Differences analysis
• Associative analysis
• Predictive analysis
• Each one has a unique role in the data analysis
  process - usually combined into a complete
  analysis of the information in order to satisfy
  the research objectives

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1) Descriptive Analysis

• The mean, median, mode, standard deviation and
  range are forms of descriptive analysis used to
  describe the sample data to portray the typical
  respondent and to reveal the general pattern of
  responses

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2) Inferential Analysis

• Using statistical procedures to generalize the
  results of the sample to the target population to
  make conclusions regarding the population
• Hypothesis testing based on sample population

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3) Differences Analysis

• Sometimes, a marketing researcher needs to
  determine whether the two groups are different,
  for instance, the researcher may be investigating
  credit card usage and want to see if high-income
  earners differ from low-income earners in the
  frequency of usage of their American Express card

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Differences Analysis Contd

• Statistically, the researcher may compare the
  average annual dollar expenditures charged on
  American Express by high vs low income buyers -
  important market segmentation information may
  come from this analysis
• Includes the t test for significant differences
  among groups and analysis of variance

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How satisfied are you with the services of
Singtel? 1 very satisfied , 5 very unsatisfied
Light users
Heavy Users
Average Rating 3.5
Average Rating 1.5
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4) Associative Analysis

• Investigates if and how two variables are related
• For example are the scores for advertising
  recall, positively associated with the intentions
  to buy the advertised brand?
• Are expenditures on customer service training
  positively associated with customer service
  excellence? E.g. spend more on customer service
  training more customer service excellence?

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Associative Analysis contd

• The analysis may indicate the strength of the
  association and/or the direction of the
  association between two questions on a
  questionnaire in a given research study
• Analyses include correlation and cross-tabulation
• E.g. spend more on customer service training
  more customer service excellence? By how much?

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5) Predictive Analysis

• Market Researcher can make use of statistical
  procedures and models to make forecasts about
  future events - useful as marketing managers are
  concern about what will happen in the future
  given certain conditions such as price increase
  or competitive pressures
• Regression or time series analyses
• Given the past sales trends and current
  conditions, what is the expected sales volume in
  the next 3 years?

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Understanding Data via Descriptive Analysis

• With SPSS, these data could be input and assigned
  variable names such as user, gender, payment
  mode etc
• We need to find some convenient means of
  summarizing the numbers in each column while
  communicating as much about the nature of this
  set of numbers as possible

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Understanding Data via Descriptive Analysis
contd

• Two sets of measures are generally used to
  describe the information obtained in a sample
• 1st set - measures of central tendency or
  measures that describe the typical respondent
  or response
• 2nd set - measures of variability or measures
  that describe how similar (or dissimilar)
  respondents or responses are to (from) typical
  respondents or responses

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Measures of Central Tendency

• Use to report a single piece of information that
  describes the most typical response to a
  question
• The term central tendency applies to any
  statistical measure used that somehow reflects a
  typical or frequently response
• 3 measures of central tendency are commonly used
  mode, median mean

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Descriptive Statistics Key Terms

• Mean
• The sum of the values for all observations of a
  variable divided by the number of observations.
• Median
• The observation below which 50 percent of the
  observations fall.
• Mode
• The value that occurs most frequently.

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Measures of Variability

• Measures of central tendency do not indicate the
  variability of responses to a particular question
  or, the diversity of respondents on some
  characteristic measured in the survey
• Measures of variability is able to indicate the
  diversity or variability of values in a data set
• Knowing the mean or some other measure of central
  tendency is important, but to be aware of how
  close to that mean or measure of central tendency
  the rest of the values fall can be meaningful

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Measures of Variability contd

• For instance, in a survey of SMS users, Singtel
  might find that the average user send 5 SMS
  messages every day
• This measure of central tendency paints only part
  of the picture as some users may make more than
  10 SMS messages daily, therefore knowledge of the
  variety of users can help the company target
  heavy users with the right marketing
  strategies
• The 3 measures of variability frequency
  distribution, range and standard deviation- each
  of them have their own unique version of
  information to describe the diversity of the
  responses

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Frequency Distribution

• A frequency distribution is a tabulation of the
  number of times that each different values
  appears in a particular set of values
• Frequencies are raw counts and normally these
  frequencies are converted into percentages for
  ease of comparison
• Example 40 respondents 30 own a car and 10 do
  not
• Drive a Car 75
• Do not own a car 25

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Range

• The range identifies the distance between the
  lowest value (minimum) and the highest value
  (maximum) in an ordered set of values
• The range specifies the difference between the
  endpoints in a distribution of values arranged in
  order
• The range does not tell you how often the maximum
  and minimum occurred but it does provide some
  information on the dispersion by indicating how
  far apart the extremes are found
• Example in a data set 1,1,2,3,4,5,6,6,7,8,9,10,
  11
• The range is between 1 to 11

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Standard Deviation

• Indicates the degree of variation or diversity in
  the values that are translatable into a normal or
  bell-shaped curve distribution
• On a normal curve, the mid-point is also the mean
• Formula s sum (xi x)2/ n-1 where
• xi individual observation
• x mean
• n no. of observations

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• Assuming if the responses approximate a bell
  shaped distribution, the size of the standard
  deviation helps you visualize how similar or
  dissimilar the typical responses are to the mean
• E.g. Distance travelled by cars in Singapore
  annually
• E.g. mean 500 km
• Standard deviation 100 km
• We can say that 95 of the responses will fall
  between 500 - 1.96 (100) and 500 1.96 (100)
• 304 km to 696 km

500 1.96 (100)
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• Focus Groups Observations

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What are Focus Groups?

• a small group of people brought together and
  guided by a moderator through an unstructured,
  spontaneous discussion about some topic.
• Some Objectives
• to generate ideas
• to understand consumer vocabulary
• to reveal consumer needs, motives, perceptions
• and attitudes on products or services
• to understand findings from quantitative studies

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Some Objectives of Focus Groups

• To generate ideas
• To use the focus group as a starting point for
  new product or service ideas, uses or
  improvements
• To understand consumer vocabulary
• To use the focus group to stay abreast of the
  words and phrases consumers use when describing
  ones product so as to improve product or service
  communication with them

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Some Objectives of Focus Groups

• To reveal consumer needs, motives, perceptions
  and attitudes on products or services
• To use the focus group to refresh the marketing
  team as to what customers really feel or think
  about a product or service
• To understanding findings from quantitative
  studies
• To use the focus groups to better comprehend data
  gathered from other surveys

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Operational Questions About Focus Groups

• What Size (no. of people)?
• Who Should Take Part?
• How to Recruit and Select Participants?
• Where Should It Take Place?
• What are the Moderators Roles and
  Responsibility?
• How to Report and Use the Findings?

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Operational Questions About Focus Groups

• What should be the size of the focus group?
• The optimal size of a focus group is 8 to 12
  people
• A small group with fewer than 8 participants is
  not likely to generate the necessary energy and
  group dynamics
• As the group becomes larger in size it tends to
  become fragmented and there may be inherent
  digressions and side comments

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Operational Questions About Focus Groups

• Who should be in the focus group?
• The best focus groups are ones in which the
  participants share similar characteristics
• The requirement is sometimes automatically
  satisfied by the researchers need to have
  particular types of people in the focus group
  discussion

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Operational Questions About Focus Groups

• How should focus group participants be recruited
  and selected?
• If the purpose of the focus group is to generate
  new ideas on product packaging, the participants
  must be consumers who have used the brand
• Companies may provide customer lists for the
  focus group recruiters to work with

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Operational Questions About Focus Groups

• How should focus group participants be recruited
  and selected?
• Strategies to entice prospective participants
  includes
• Various types of incentives ranging from monetary
  compensation to free products or gift
  certificates
• Using call-backs the day prior to the focus group
  meeting to remind prospective participants that
  they have agreed to take part
• Over-recruiting is one way to deal with no shows

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Operational Questions About Focus Groups

• Where should a focus group meet?
• If a group discussion is to take place for a
  period of 90 minutes or more, it is important
  that the physical arrangement of the group be
  comfortable and conducive to group discussion
• Ideally, focus group should be conducted in large
  rooms setup in a roundtable format

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Operational Questions About Focus Groups

• The focus group moderators role
  responsibilities
• The moderator is a person who conducts the entire
  session and guides the flow of group discussion
  across specific topics desired by the client
• A successful focus group requires an effective
  moderator
• A good moderator is experienced, enthusiastic,
  prepared, involved, energetic and open-minded

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Operational Questions About Focus Groups

• The focus group moderators role
  responsibilities
• Unless the moderator understands what information
  the researcher is after and why, he or she will
  not be able to phrase questions effectively
• Also, the moderators introductory remarks are
  influential and they set the tone of the entire
  session

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Operational Questions About Focus Groups

• Reporting and use of focus group results
• Factors to consider when analyzing data
• The translation of qualitative statements of
  participants into categories and then reporting
  the degree of consensus apparent in the focus
  groups
• Demographic and buyer behaviour characteristics
  of focus group participants should be judged
  against the target market profile to assess to
  what degree the groups represent the target
  market

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Operational Questions About Focus Groups

• Reporting and use of focus group results
• Focus group transcripts must be translated before
  they are reported
• A focus group analysis should identify the major
  themes as well as salient areas of disagreement
  among the participants

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Advantages Disadvantages of Focus Groups

• Advantages
• Generate Fresh Ideas
• Allow Clients to Observe
• Generally Versatile
• Work Well with Special Participants
• Disadvantages
• Representativeness
• Subjective Interpretation
• High Cost per Participant

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Advantages of Focus Groups

• Generate fresh ideas
• Creative honest insights are often the result
  of focus groups
• The interaction among respondents can stimulate
  new ideas and thoughts that might not arise
  during one-on-one interviews

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Advantages of Focus Groups

• Allows clients to observe the group
• the ability to observe focus groups greatly
  facilitates client understanding
• an opportunity could be made available for them
  to observe their customers or prospects from
  behind one-way mirrors

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Advantages of Focus Groups

• Generally versatile
• virtually unlimited number of topics and issues
  can be discussed in a focus group interview
  situation
• focus groups using video-conferencing and
  Internet chat rooms demonstrate the versatility
  of the technique

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Advantages of Focus Groups

• Work well with special respondents
• Focus groups permit the researcher to study
  respondents that might not respond well under
  more structured situations
• Sometimes involving hard-to-interview groups
  such as doctors and accountants the format gives
  them an opportunity to associate with their peers
  and compare notes

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Disadvantages of Focus Groups

• May not represent the population
• May not be representative of the total group
  under study
• Interpretation is subjective
• Individuals with pre-conceived notions can
  almost always find something to support their
  views, ignoring anything that does not support
  their opinions
• It is always advisable to use a trained analyst
  to interpret the findings from the focus groups
• Peer Pressure

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Disadvantages of Focus Groups

• High cost per participant
• A number of expensive items contribute to the
  high cost per participant
• Participant recruitment and the numerous
  telephone calls are usually needed to recruit the
  desired number of required participants
• Incentive cost for all participants
• Moderators fees
• Facilities rental fees videotaping equipments
  charges

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Brief Steps in Conducting a Focus Group
Prepare for the Group Select a focus
group facility and recruit the participants
Prepare the Focus Group Report
Select a Moderator Create a Discussion guide
Conduct the Focus Group
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Observation Research Defined

• Instead of asking people questions, as in a
  survey, observation depends on watching what
  people do
• Observation methods often rely on recording
  devices as the researchers memory alone can be
  faulty
• McDaniel defines Observation Research as the
  systematic process of recording the behavioural
  patterns of people, objects and occurrences
  without questioning or communicating with them

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Types of Observation

• Observation studies may appear to be without any
  structure or plan, but it is important to stick
  to a formal structure and plan so that the
  observations are consistent and comparisons or
  generalizations can be made as accurate as
  possible

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Types of Observation

• 4 general ways of organizing observations
• Direct versus Indirect
• Disguised versus Undisguised
• Structured versus Unstructured
• Human versus Mechanical

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Direct versus Indirect Observation

• Observing behaviour as it occurs is called direct
  observation
• Some examples finding out how much shoppers
  squeeze tomatoes to assess their freshness
  through the observation of people picking up the
  tomatoes
• Kelloggs used direct observation to understand
  peoples behaviour during breakfast

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Direct versus Indirect Observation

• Observing different types of past behaviour (or
  hidden behaviour) we must rely on indirect
  observation
• With indirect observation, the researcher
  observes the effects or results of the behaviour
  rather than the behaviour itself
• Example In a product prototype test, it is
  important to know how much of the test product
  was actually used the most accurate way to find
  out is to have respondents returned the unused
  product so that the researcher can measure how
  much is left

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Types of Indirect Observation

• Archives secondary sources such as historical
  records that can be applied to the present
  problem
• Examples Records of sales calls may be inspected
  to determine how often sales people make cold
  calls
• Warehouse inventory movements can be used to
  study market shifts

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Disguised versus Undisguised Observation

• With disguised observation the subject is unaware
  that he or she is being observed
• Examples Secret shopper that a retail store
  chain used to record and report on sales clerks
  assistance and courtesy
• One-way mirrors and hidden cameras are a few of
  the other ways that are used to prevent subjects
  from becoming aware that they are being observed

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Disguised versus Undisguised Observation

• Sometimes, it is impossible for the respondent to
  be unaware of the observation and here is the
  case of undisguised observation
• Some examples laboratory settings, observing a
  sales reps behaviour on sales call must all be
  used/done with the subjects knowledge
• As people might be influenced by knowing that
  they are being observed, it is advisable to
  always minimize the presence of the observer to
  the maximum extent possible

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Structured versus Unstructured Observation

• Observation may be structured or unstructured
• When using structured observation techniques, the
  researcher identifies beforehand which behaviours
  are to be observed and recorded, all other
  behaviours are ignored
• Often, a checklist or a standardized observation
  form is used to isolate the observers attention
  to specific factors

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Structured versus Unstructured Observation

• Unstructured observation places no restriction on
  what the observer would note all behaviour under
  study is monitored and the observer just watches
  the situation and records what he or she deems
  interesting or relevant
• The observer is thoroughly briefed on the area of
  general concern (what to look out for during the
  observation process?)

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Human versus Mechanical Observation

• With human observation, the observer is a person
  hired by the researcher or the observer is the
  researcher and
• When we replace the human observer with some form
  of observing device, we call it mechanical
  observation
• The substitution may be made because of accuracy,
  cost or functional reasons

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Human versus Mechanical Observation

• Example during rush hours, a human observer
  could not count the number of cars on most major
  cosmopolitan commuter roads
• Mechanical observation has moved into the
  high-technology area recently and the combination
  of telecommunications, computer hardware and
  software programmes has created a very useful
  research tool

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Advantages of Observational Data

• Ideally the subjects of observational research
  are unaware they are being studied as they should
  react in a natural manner, giving the researcher
  insight into actual, not reported behaviours
• Observers see what people actually do rather than
  having to rely on what they say they did
• Observation may be the only way to obtain
  accurate information

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Limitations of Observational Data

• The limitations of observation are the
  limitations present in qualitative research in
  general
• With direct observation, only small numbers of
  subjects are studied and usually under special
  circumstances, so their representativeness is a
  concern
• Secondly, the subjective interpretation required
  to explain the observed behaviour usually forces
  the researcher to consider his or her conclusions
  to be tentative

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Limitations of Observational Data

• The greatest drawback is the researchers
  inability to pry beneath the behaviour observed
  and to interrogate the person on motives,
  attitudes and all of the other unseen aspects of
  why what was observed took place
• Motivations, attitudes and other internal
  conditions cannot be observed

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Other Qualitative Research Techniques

• Protocol Analysis
• Projective Techniques
• Word Association Test
• Sentence Completion Test
• Picture Test
• Cartoon or Balloon Test
• Role-Playing Activity