MARKETING ANALYTICS

SPSS: Statistical package for social sciences

SPSS can identify only 3 types of variable Nominal (categorical), ordinal
and continuous.
3 types of ratios:
a. Nominal (Categorical) - A categorical variable (sometimes called a nominal
variable) is one that has two or more categories (Example: Male & Female)
b. Ordinal Similar to nominal, but can rank in this type of ratio.
c. Continuous It is measured and can be in decimals. This is within certain
limits.
Discreet Variable This can take only a finite number of values. It is rounded to
the nearest number.
Interval Scale An interval variable is similar to an ordinal variable, except that
the intervals between the values of the interval variable are equally
spaced. Cannot give the magnitude.

I.
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II.
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ONE SAMPLE t TEST:

This test to used to check the significant difference between the mean
values and some required test value.
It is conducted at 95% confidence level or 5% significance level.
This test is purely for ONE SAMPLE ONLY.
In the output we look for the p-value. If it less than 0.05, there is a
significant difference between the mean value and the test value.
HYPOTHESES:
H0: There is no significant difference between the mean value and the test
value. (when p-value >0.05)
H1: There is significant difference between the mean value and the test
value. (when p-value <0.05)
INDEPENDENT SAMPLE t TEST:
This test is used to compare the means of 2 groups.

Tables to check:
1. Lovenes test Used to check the equality of variances in the 2 groups
- HYPOTHESES:
H0: There is no significant difference between the mean ages of boys and
girls in the class. (when p-value >0.05)
H1: There is significant difference between the mean ages of boys and
girls in the class. (when p-value <0.05)
III.
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ONE WAY ANOVA:

HYPOTHESES:
H0: There is no significant difference between the mean ages of students
across 4 sections. (when p-value >0.05)

H1: There is significant difference between the mean ages of students

across 4 sections. (when p-value <0.05)
While doing Anova test, we must perform a post-hoc. Post-hoc involves
grouping the variables which are similar and significantly different.
IV.

REGRESSION ANALYSIS:
Correlation: Degree of association between variables. Impact of one
variable on another.
Regression: It is used to find out how much deviation from the line.
FORMULA:
y = a+b1x1+b2x2+.
+bnxn+SE
Y Continuous variable (DEPENDENT VARIABLE)
B Regression co-efficients
X Nominal, Ordinal or Continuous (Independent variables)
-

Should consuct a co-relation test between the dependent variable y with

the independent variable x.
Must look at the significance value (should be less than 0.05 for co-relation
to exist)
Interco-relation talks about the relation between the independent
variables.

Tables to check:

V.

1. Anova (Check if the p-value <0.05)

2. Model Summary Gives the coefficient of determination (Rsquare). X%
variation is Y (dependent variable) is due to the independent variable
X.
This also provides the standard error for the fomula.
3. Co-efficients This table is used to create the equation. (again
depending on the sig value)

DISCRIMINANT ANALYSIS:

It is a linear function.
There are 2 categories substituting the independent variables, it shows, which
category it falls into.
FORMULA:
y = a+k1x1+k2x2+.+knxn

Y Categorical variable (DEPENDENT VARIABLE)

B Discriminant Score
X Continuous (Independent variables)
NOTE: The major difference between RA and DA is that in RA, the dependent
variable (Y) is continuous and in DA it is Categorical.

Tables to check:
1. Classification results This provides the accuracy of the
discriminant model.
2. Wilks Lambda The value must be between 0 to 1. If the value is
closer to 0, this means that the model has a good discriminatory
power.
3. Standard Cannonical Co-efficients This table shows which
independent variable contributes more in discriminating the
customers.
4. Cannonical Discriminant Co-efficient Functions - This table is used
for writing the discriminant function.
5. Group Centroid Table - This table helps us classify the customers
into the categories.

VI.
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CLUSTER ANALYSIS:
This tool clearly differentiates the people based on certain attributes.
It is in the form of a likert scale.

Tables to check:
1. Agglomeration Schedule With this table, we determine the number of
clusters to be considered.
2. Final Cluster Centers This table provides the opinions of each variable
in each cluster.

VII.

LOGISTIC REGRESSION:

The curvilinear function is logistic regression. This tool provides more accuracy.
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P=

The probability value will always be between 0 to 1.

It can have only 2 ranges
It can take only 2 categories.
Can accommodate any kind of independent variable like Nominal,
Ordinal and Continuous

e^ (a + k1x1 + k2x2 + ... + knxn)

(ODD)

1 + e^ (a + k1x1 + k2x2 + ... + knxn) (1+ODD)

The above equation is also known as logit function.
Tables to check:
1. Classification Table With this table, we check the prediction by the
model. If the overall % is more than 80%, this means, the prediction is
good.
2. Hosmers and Lemeshow test This value must be closer to 1, which
means, there is no significant difference between the observed and
predicted values.

3. Model Summary Both the R square values should be greater than 0.6,
which explains that, the independent variable has a high relationship
with dependent variable.
4. Variable in Equation This table is used to create the equation. Since
the sample size is small, we consider all the variables.
VIII.
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FACTOR ANALYSIS:
This is used as a predictive tool.
Before performing a foctor analysis, we must do a reliability test.
This is done by a statistic called Cronbachs alpha (it is usually more
than 0.6)
Cronbachs Alpha item if deleted. We see which statement is
instrumental in increasing the Cronbachs alpha value and accordingly rerun the reliability test, excluding this statement.

Tables to check:
1. KMO and Bartletts test - The sig value must be less than 0.05. This means
that the correlation matrix of the variable taken for the study is not an
identity matrix, which means, correlation among variables exist.

The second measure is the KMO measure of sampling adequacy. The value can reach
up to 1 which tells us that we can say that the variables we have taken are
appropriate for factor analysis.
2. Rotated Component matrix - This table shows the correlation coefficients
between the statements and the factors.
3. Naming the Factors The factors that have been produced need to be
named as per the attributes.
4. Total Variance Explained This table provides details of the how much dies
each factor contribute. The percentage that is missing is lost due to
factor analysis.