Correlations Analysis: Sales Sales Del Boys Ad cost Outlets Variants .953** .000 15 .845** .000 15 .904** .

000 15 1 Comp. Int .725** .002 15 .672** .006 15 .702** .004 15 .794** .000 15 .794** .000 15 -.036 .897 15 .856** .000 15 15 -.178 .527 15 .819** .000 15 15 .006 .983 15 15 15 1 No of Ext Customer -.040 .886 15 -.103 .715 15 -.189 .500 15 -.036 .897 15 -.178 .527 15 1

Pearson 1 .902** .934** Correlation Sig. (2.000 .000 tailed) N 15 15 15 Del Boys Pearson .902** 1 .905** Correlation Sig. (2.000 .000 tailed) N 15 15 15 Ad cost Pearson .934** .905** 1 Correlation Sig. (2.000 .000 tailed) N 15 15 15 Outlets Pearson .953** .845** .904** Correlation Sig. (2.000 .000 .000 tailed) N 15 15 15 Variants Pearson .725** .672** .702** Correlation Sig. (2.002 .006 .004 tailed) N 15 15 15 Comp. Pearson -.040 -.103 -.189 Int Correlation Sig. (2.886 .715 .500 tailed) N 15 15 15 No of Ext Pearson .880** .841** .867** Customer Correlation Sig. (2.000 .000 .000 tailed) N 15 15 15 ** Correlation is significant at the 0.01 level (2-tailed).

.880** .000 15 .841** .000 15 .867** .000 15 .856** .000 15 .819** .000 15 .006 .983 15 1

The Pearson Correlation Coefficient tells us the strength of association (magnitude of relationship) between two variables and also the direction of change. Here Sales is the dependent variable and there are six independent variables: No. of Delivery Boys No. of Outlets Competitive Intensity Advertising Cost No. of Variants No. of existing customers

The Pearson Correlation coefficient shows that Sales is highly positively correlated with No. of Delivery Boys, Advertising Cost and No. of Outlets. Also it is positively correlated with No. of variants and No. of existing customers. There is a weak negative correlation between Sales and competitive intensity. Also from the significance level we see that all correlations between Sales and other variables are significant at 99% confidence interval except for correlation between sales and competitive intensity.

Also we see that the problem of multi-collinearity exists here, i.e., the independent variables chosen are not independent of each other. They are rather dependent on each other. To solve this problem we perform the regression analysis. Regression Analysis: Variables Entered/Removeda Model Variables Entered No of Ext Customer, 1 Comp. Int, Variants, Del Boys, Outlets, Ad costb a. Dependent Variable: Sales b. All requested variables entered. Model Summary Model 1 R .976
a

Variables Removed

Method

. Enter

R Square .953 ANOVAa

Adjusted R Square .918

Model Regression 1 Residual Total

F 27.254

Sig. .000b

Coefficientsa Model Unstandardized Coefficients B (Constant) Del Boys Ad cost 1 Outlets Variants Comp. Int No of Ext Customer 6.372 .919 .699 1.620 -1.978 .067 .242 Std. Error 32.586 .910 1.303 .618 2.310 2.211 .299 .850 .342 .606 .031 .417 .977 .442 Sig.

We perform linear regression to analyse the relationship between dependent variable sales and six independent variables. As can be seen from the R2 value that 95.3% variation in sales can be attributed to these six

independent variables. Also from the Anova table we can see that the p-value is .000 (<.05) which means that the independent variables can reliably predict Sales or in other words the model obtained is reliable. From the coefficients table we can use the unstandardized coefficients (B) to obtain an equation that can predict sales from the independent variables. The equation is: Sales= 6.372+ 0.919* No. of Delivery Boys+ 0.699* Advertising Cost+ 1.620* No. of Outlets- 1.978* No. of Variants+ 0.067* Competitive Intensity+ 0.242* No. of Existing Customers We also see from the p-values that of the six variables only the coefficient of no. of outlets is statistically significant as it is 0.031 (<0.05). We also observe some anomalies in the results as no. of variants decreases sales whereas the level of competitive intensity has a slight positive impact on sales. This problem arises due to multi-collinearity. To solve this problem we perform stepwise regression (forward and backward regression). Forward Regression: Variables Entered/Removeda Model Variables Entered Variables Removed Forward (Criterion: 1 Outlets . Probability-ofF-to-enter <= .050) Forward (Criterion: 2 Del Boys . Probability-ofF-to-enter <= .050) a. Dependent Variable: Sales Model Summary Model 1 2 R .953a .970
b

Method

R Square .908 .940

Adjusted R Square .900 .930

a. Predictors: (Constant), Outlets

b. Predictors: (Constant), Outlets, Del Boys ANOVAa Model Regression 1 Residual Total Regression 2 Residual Total a. Dependent Variable: Sales b. Predictors: (Constant), Outlets c. Predictors: (Constant), Outlets, Del Boys Coefficientsa Model Unstandardized Coefficients B 1 (Constant) Outlets (Constant) 2 Outlets Del Boys -13.013 2.503 -11.817 1.753 1.640 Excluded Variablesa Beta In t Sig. Std. Error 3.746 .222 3.172 .347 .641 .004 .000 .003 .000 .025 Sig. 94.288 .000c F 127.676 Sig. .000b

Model

Partial Correlation

Del Boys Ad cost 1 Variants Comp. Int No of Ext Customer Ad cost Variants 2 Comp. Int No of Ext Customer

.338b .400
b

2.556 2.361 -.600 -.064 1.560 1.085 -.732 .257 .736

.025 .036 .560 .950 .145 .301 .480 .802 .477

.594 .563 -.171 -.018 .411 .311 -.215 .077 .217

-.085b -.006
b

.241b .226c -.087

c

.019c .113c

a. Dependent Variable: Sales b. Predictors in the Model: (Constant), Outlets c. Predictors in the Model: (Constant), Outlets, Del Boys

From the forward regression analysis we see that we obtain two major variables, i.e., no. of outlets and no. of delivery boys that explain about 94% variation in sales. Also from the p-values we can conclude that the model obtained is a good fit. In the stepwise forward regression we include only two of the four independent variables and the equation obtained for predicting sales is: Sales= -11.817+ 1.753*No. of Outlets+ 1.640* No. of Delivery Boys

Backward Regression: Variables Entered/Removeda Model Variables Entered No of Ext Customer, 1 Comp. Int, Variants, Del Boys, Outlets, Ad costb Backward (criterion: 2 . Comp. Int Probability of F-to-remove >= .100). Backward (criterion: 3 . Ad cost Probability of F-to-remove >= .100). Backward (criterion: 4 . Variants Probability of F-to-remove >= .100). Backward 5 . No of Ext Customer (criterion: Probability of F-to-remove >= .100). a. Dependent Variable: Sales b. All requested variables entered. . Enter Variables Removed Method

Model Summary Model 1 2 3 4 5 R .976a .976 .971

b c

R Square .953 .953 .951 .943 .940

Adjusted R Square .918 .927 .932 .927 .930

.975 .970

d e

a. Predictors: (Constant), No of Ext Customer, Comp. Int, Variants, Del Boys, Outlets, Ad cost b. Predictors: (Constant), No of Ext Customer, Variants, Del Boys, Outlets, Ad cost c. Predictors: (Constant), No of Ext Customer, Variants, Del Boys, Outlets d. Predictors: (Constant), No of Ext Customer, Del Boys, Outlets e. Predictors: (Constant), Del Boys, Outlets ANOVAa Model Regression 1 Residual Total Regression 2 Residual Total Regression 3 Residual Total Regression 4 Residual Total Regression 5 Residual Total a. Dependent Variable: Sales b. Predictors: (Constant), No of Ext Customer, Comp. Int, Variants, Del Boys, Outlets, Ad cost c. Predictors: (Constant), No of Ext Customer, Variants, Del Boys, Outlets, Ad cost d. Predictors: (Constant), No of Ext Customer, Variants, Del Boys, Outlets e. Predictors: (Constant), No of Ext Customer, Del Boys, Outlets f. Predictors: (Constant), Del Boys, Outlets 94.288 .000f 60.640 .000e 48.657 .000d 36.789 .000c F 27.254 Sig. .000b

Coefficientsa Model Unstandardized Coefficients B (Constant) Del Boys Ad cost 1 Outlets Variants Comp. Int No of Ext Customer (Constant) Del Boys 2 Ad cost Outlets Variants No of Ext Customer (Constant) Del Boys 3 Outlets Variants No of Ext Customer (Constant) 4 Del Boys Outlets No of Ext Customer (Constant) 5 Del Boys Outlets Excluded Variablesa Model 2 3 Comp. Int Comp. Int Ad cost Comp. Int 4 Ad cost Variants Comp. Int 5 Ad cost Variants No of Ext Customer Beta In .003b -.026 .147 .012 .201 -.170
c c

Sig.

Std. Error 6.372 .919 .699 1.620 32.586 .910 1.303 .618 2.310 2.211 .299 21.908 .858 1.035 .522 1.868 .245 19.733 .721 .429 1.769 .227 3.445 .723 .409 .204 3.172 .641 .347 .850 .342 .606 .031 .417 .977 .442 .755 .311 .529 .012 .309 .342 .543 .127 .002 .226 .225 .004 .076 .002 .477 .003 .025 .000

-1.978 .067 .242 7.061 .920 .678 1.629 -2.014 .246 12.422 1.200 1.811 -2.285 .294 -12.690 1.413 1.602 .150 -11.817 1.640 1.753

Sig. .977 .756 .529 .883 .385 .226 .802 .301 .480 .477

d d d e e

.019 .226

-.087e .113
e

From the backward regression analysis we again obtain the same two major variables, i.e., no. of outlets and no. of delivery boys that explain about 94% variation in sales. This verifies the earlier tests. Also from the p-values we can conclude that the model obtained is a good fit. In the stepwise backward regression we exclude the other four independent variables and the equation obtained for predicting sales is: Sales= -11.817+ 1.753*No. of Outlets+ 1.640* No. of Delivery Boys Conclusions & Recommendations: As can be seen, out of the six independent variables chosen only two variables i.e., No. of Outlets and No. of Delivery Boys significantly affect sales. The owners of Pizza Corner should thus focus majorly on these two factors and improve them. The spending on other factors such as Advertising cost can be reduced without much effect on sales. Also factor such as level of competitive intensity does not significantly affect Pizza Corners sales. Thus Pizza corner should focus on expanding by increasing the number of outlets and hiring more delivery boys to provide better and faster services to the consumers.