Statistics M101:

Introduction to
Statistics
TIME :: 30Mins

Introduction
Mathematical modelling is a key element of quantitative marketing and helps
companies around the globe in making important marketing decisions about
launching new products and managing existing ones. Most mathematical models
used in marketing research are either purely statistical or include elements of
statistical models.

Statistical techniques have been used in different areas of Management to

analyze and interpret the data. Accurate data analysis and statistical
forecasting is used to predict the future values for trading and business.
Future trends, patterns and business drives of data are used to forecast
about future business. Statistical methods are widely used to identify study
and solve various complex problems related to economy and business.
Market research is also helpful to develop advertising brochures
and commercials, sales plans, and product promotions such as rebates and
giveaways based on their knowledge of the consumer being targeted.
The information also may be used to determine whether the company should
add new lines of merchandise, open new branches, or otherwise diversify the
company's operations
Research may be defined as a search of knowledge or any short of
systematic investigation of past or future facts. The basic need of research is to
discover, interpreting and developing the various application that can
be effectively used in various fields to get the authentic outcome of problems
due to which the possibilities of diversions are increasing. Two definitions of
Market Research are given as, according to American

Marketing Association (AMA) Official Definition of Marketing Research

Marketing research is about researching the whole of a companys
marketing process.
According to Palmer (2000), Marketing research is the function that links
the consumer, customer, and public to the marketer through information
information used to identify and define marketing opportunities and problems
generate, refine, and evaluate marketing actions monitor marketing
performance and improve understanding of marketing as a process.
Marketing research specifies the information required to address these
issues, designs the methods for collecting information, manages and implements
the data collection process, analyzes, and communicates the findings and their
implications.""
It is the systematic gathering, recording, and analysis
of qualitative and quantitative data about issues relating to marketing products
and services. The goal of marketing research is to identify and assess how
changing elements of the marketing mix impacts customer behaviour. The term
is commonly interchanged with market research; however, expert practitioners
may wish to draw a distinction, in that market research is concerned specifically
with markets, while marketing research is concerned specifically about marketing
processes.
Marketing research is often partitioned into two sets of categorical pairs, either
by target market:

Consumer marketing research, and

Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach:

Qualitative marketing research, and

Quantitative marketing research

Employing statistics serves two purposes, (1) description and (2) prediction.
Statistics are used to describe the characteristics of groups. These
characteristics are referred to as variables. Data is gathered and recorded for
each variable. Descriptive statistics can then be used to reveal the distribution of
the data in each variable.

Statistics is also frequently used for purposes of prediction. Prediction is based

on the concept of ability to generalize: if enough data is compiled about a
particular context (e.g., students studying writing in a specific set of classrooms),
the patterns revealed through analysis of the data collected about that context
can be generalized (or predicted to occur in) similar contexts. The prediction of
what will happen in a similar context is probabilistic. That is, the researcher is not
certain that the same things will happen in other contexts; instead, the
researcher can only reasonably expect that the same things will happen.
Prediction is a method employed by individuals throughout daily life. For
instance, if writing students begin class every day for the first half of the
semester with a five-minute free writing exercise, then they will likely come to
class the first day of the second half of the semester prepared to again free write
for the first five minutes of class. The students will have made a prediction about
the class content based on their previous experiences in the class: Because they
began all previous class sessions with free writing, it would be probable that their
next class session will begin the same way. Statistics is used to perform the same
function; the difference is that precise probabilities are determined in terms of
the percentage chance that an outcome will occur, complete with a range of
error. Prediction is a primary goal of inferential statistics.
Definitions:: The quantities measured in a study are called random
variables, and a particular outcome is called an observation. Several
observations are collectively known as data. The collection of all
possible outcomes is called the population.

Wohooo !!! here we have few questions

{Expected Questions I must say :P :D}
Q1 (a) Explain the characteristics of Statistics.
Statistics is a science which deals with the method of collecting, classifying,
presenting, comparing and interpreting the numerical data to throw light on
enquiry.

Statistics details with an aggregate of facts

A single figure cannot be analyzed. For example, the fact Mr. Kiran is 170
cms tall cannot be statistically analyzed. On the other hand, if we know
the heights of 60 students in a class, we can comment upon the average
height and variation.

Statistics gets affected to a great extent by multiplicity of causes

The statistics of the yield of a crop is the result of several factors, such as
the fertility of soil, amount of rainfall, the quality of seed used, the quality
and quantity of fertilizer used.

Statistics are collected in a systematic manner

The facts should be collected according to planned and scientific methods
otherwise; they are likely to be wrong and misleading.

Statistics are collected for a pre-determined purpose

There must be definite purpose for collecting facts. Otherwise,
indiscriminate data collection might take place which would lead to wrong
diagnosis.

Statistics are placed in relation to each other

The facts must be placed in such a way that a comparative and analytical
study becomes possible. Thus, only related facts which are arranged in a
logical order can be called statistics.
Statistical analysis cannot be used to compare heterogeneous data.

(b) What are components of statistics? Give a brief description of each

of the components.

Collectio
n of data

Presentat
ion of
data

Analysis
of data

Interpretati
on of data

Basis components of Statistics According to Croxton and

Cowden

Collection of data :
Careful planning is required while collecting data. Two methods used for
collecting data are census method and sampling method. The investigator
has to take care while selecting an appropriate collection method.

Presentation of data :
The collection data is usually presented for further analysis in a tabular,
diagrammatic or graphic from and it is condensed, summarized and
visually represented in a tabular or graphical form.
Tabulation is a systematic arrangement of classified data in rows and
columns. For the representation of data in diagrams, we use different
types of diagrams such as one-dimensional, two-dimensional and three
dimensional diagrams.

Analysis of data

The data presented has to be carefully analyzed to make any inference

from it. The inference can be various types, for example, as measure of
central tendency, desperation, correlation or regression.

Interpretation of data

The final step is to draw conclusions from the analyzed data.

Interpretation requires high
degree of skill and experience. We can interpret the data easily from
pie-charts.
Q2. Explain the objectives of statistical average. What are the
requisites of a good average?
The statistical average or simply an average refers to the measure of middle
value of the data set. The objectives of statistical average are to:

Present mass data in a concise form: The mass data is condensed to

make the data readable and to use it for further analysis. It is very difficult
for human mind to grasp a large body of numerical figures. A measure of
average is used to summarize such data into a single figure, which makes
it easier to understand.
Facilities comparison: It is difficult to compare two different sets of
mass data. However, we can compare those two after computing the
averages of individual data sets. While comparing the same measure of
average should be used. It leads to incorrect conclusions when the mean
salary of employees is compared with the median salary of the employees.
Establish relationship between data sets: The average can be used
to draw inferences about the unknown relationships between the data
sets. Computing the averages of the data sets is helpful for establishing
the average of population.
Provide basis for decision making: In many fields such as business,
finance, insurance and other sectors, managers compute the averages
and draw useful inferences or conclusions for taking effective decisions.

Requisites of a good average

The following are the requisites of a good average:

It should be simple to calculate and easy to understand.

It should be based on all the values.
It should not be affected by extreme values.
It should not be affected by sampling fluctuation.
It should be rigidly defined, preferably by an algebraic formula, so that
different persons obtain the same value for a given set of data.
Should be suitable for further mathematical treatment.
Vigorously defined
Capable of simple interpretation
Capable of mathematical manipulation.

Not unduly influenced by one or two extremely large or small values.

Dependent on all the observed values.