ECON940 i
ECON940 – Statistics for Decision Making
[Student Name]
[Student ID card]
ECON940 ii
Executive Summary
In Australia, fashion has been a big business. Australian local luxury market worth’s for
approximately $2bn in revenue with the annual growth of 10%. Certainly, Australian designer
along with their design has turn out to be a hot export for the fashion world meccas (Clothing
Retailing in Australia, 2017). Currently, Australian domestic market worth for 28.5 billion
Australian dollars. With extensive progress, they decided to introduce new product line in order
to further increase their market share in the Australian (The 2016 Australian Fashion Report,
2016). The primary purpose of this study is to analyse the Australian fashion market and study
their characteristics of currently available clothing products so the company will be in a better
position to price its proposed new line. Different brand has been selected in order to analyse the
price and cloth style trend of the products. The brands that are selected for this study are Calvin
Klein, Zara, Tommy Hilfiger and Ralph Lauren. These are the main leader in the current market
that is preferred by the customers. Furthermore, this study will also highlights the relationship
between the product prices, brands of different styles will be analysed in order to see does prices
have impact on the brands and styles. For this purpose, Statistical tool has been used i.e.
descriptive statistics and inferential statistical technique.
ECON940 iii
Table of Content
EXECUTIVE SUMMARY ------------------------------------------------------------------------------ II
INTRODUCTION ---------------------------------------------------------------------------------------- 1
Business Problem ------------------------------------------------------------------------------------------------------------------------------ 1
Statistics Problem Methods ----------------------------------------------------------------------------------------------------------------- 1
ANALYSIS ------------------------------------------------------------------------------------------------- 2
CONCLUSION -------------------------------------------------------------------------------------------- 9
IMPLICATIONS ---------------------------------------------------------------------------------------- 10
REFERENCES ------------------------------------------------------------------------------------------ 11
APPENDIX ----------------------------------------------------------------------------------------------- 12
Figure 1.Unit Price of The Product From Different Brands ---------------------------------------------------------------------- 12
Figure 2.Unit Price of The Product From different styles ------------------------------------------------------------------------- 14
Figure 3. Zara products stores for the three different styles ---------------------------------------------------------------------- 16
Figure 4 average prices across these two gender targets -------------------------------------------------------------------------- 17
Figure 5. Average product price of the different brands --------------------------------------------------------------------------- 17
Figure 6. Average prices across the three styles ------------------------------------------------------------------------------------- 18
Figure 7. ZARA’s clothes of different styles ----------------------------------------------------------------------------------------- 18
ECON940 1
Introduction
Business Problem
Since company wants to develop new product line, they need to analyse the different
characteristics of different clothing products that are currently leading in the market in order to
be in a better position to price their new product line. Brand and price has become the significant
factors that have made the consumer choice difficult in purchasing the clothes. Therefore, the
business problem in this case study is to determine the relationship between the price, brand and
style of different clothing brands in connection with the reasons and explanation.
Statistics Problem Methods
Different methods have been introduced in order to measure the variable and provide
accurate results. The statistic problem is to compute the variables to see whether the price and
brands are interrelated to each other. Hence, sample of 120 products from different brands Calvin
Klein, Zara, Tommy Hilfiger and Ralph Lauren has been considered. These brands have different
styles which are business, sport clothes and casual for male and female. Moreover for analysis
purpose, Microsoft excel has been utilized. Addition to this, descriptive statics has been used for
the unit price of the product from different brands and for different styles. Furthermore, price
variability and brands has been computed and described via median, mean and mode. Variability
of price has been compared via coefficient of variation. Coefficient of skewness together with
Kurtosis employed for discussing distribution shape.
ECON940 2
Analysis
1. Unit price of the product from different brands has been compared from the below statistics, it
is clear that Zara price is the lowest with $51.1. The mean price of Calvin is 69.5m while
Tommy Hilfiger and Ralph Lauren is $73.86 and 71.5 respectively. For brand, mean and median
would be analysed as median is not affected by the extreme value magnitude, while, the mean
does affected by the value as well as with the extreme item. Therefore, this will further assist in
analysing the problem. As mean is higher than median in the case of Calvin Klein and Ralph
Lauren, this states a favourable position which means that these clothing brand have positive
skewness. Zara and Tommy Hilfiger mean and median are lower, they have negative skewed.
Shape of distribution: Most positive skewed shape is of Ralph Lauren i.e. obvious Leptokurtic
distribution, as far as Calvin Klein and Tommy Hilfiger is concern, they have Platykurtic
distributions.
Calvin Klein
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Zara
69.568886
4.2682872
65.058881
#N/A
23.378372
546.54827
0.1115485
0.4011992
99.088022
29.08674
128.17476
2087.0666
30
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
51.1085
2.53228
51.8144
#N/A
13.8698
192.373
-0.7767
-0.0534
50.0214
25.0698
75.0911
1533.25
30
ECON940 3
Tommy Hilfiger
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Ralph Lauren
73.869242
5.895396
76.162827
#N/A
32.290414
1042.6708
-0.86718
-0.064825
115.81856
14.383714
130.20227
2216.0773
30
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
71.5017
5.70795
64.1227
#N/A
31.2637
977.42
-0.0779
0.60002
126.944
22.0753
149.019
2145.05
30
Variability of the data, for variability of the data, Standard deviation and mean has been
computed. As per above data, the highest price is of Tommy Hilfiger with highest Standard
deviation, while, Ralph Lauren has a similar situation like Tommy Hilfiger. Hence, Tommy
Hilfiger price were volatile due to different style while Zara and Calvin Klein has moderate
price. Hence, Zara has positive and outstanding results with lowest prices with smallest price
variance as compared to others. Zara is the cheapest and steady with different style and brand
(Hamburg, 2016).
2. The mean price of business is $93.75 while mean price of sport clothes is $64.85 with causal
mean price of $40.9. Since mean of sport clothes is higher than median this means that they are
positive skewness while, mean of business and causal is lower, they have negative Skewness.
This further states that business clothes are much expensive than other sports clothes and casual
clothes of these brands. Shape of distribution: Most positive skewed shape is of Business i.e.
obvious Leptokurtic distribution, as far as Sport Clothes and Casual are concern, they have
Platykurtic distributions.
ECON940 4
Variability of the data: For variability of the data, Standard deviation and mean has been
employed. As per data, the highest price is of Business clothes with highest Standard deviation.
Hence, casual is the cheapest with lower standard Deviation.
Business
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Sport Clothes
93.7502
3.61748
94.5542
#N/A
22.8789
523.446
-0.4202
0.26754
92.5339
56.4853
149.019
3750.01
40
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Casual
64.8589
2.19925
62.6018
#N/A
13.9093
193.469
-0.3852
0.23375
62.7152
36.2176
98.9329
2594.36
40
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
40.9271
1.93668
41.1742
#N/A
12.2487
150.03
-0.2363
-0.054
50.8754
14.3837
65.2591
1637.08
40
3. Zara business clothes has the highest price with $65.8 followed by sport clothes having
second highest price $50.144 and casual with $37.3. This shows that Zara business clothes are
more expensive amount the other brands. The price range of business clothes of Zara is from $56
to $75. Furthermore, casual mean is higher than median hence, it has positive skewness having
obvious Leptokurtic distribution while business and sport has lower mean as compared to
median, and they have negative skewness having Platykurtic distributions. Hence,
Zara Business has the largest amount of prices with a second largest degree of SD with attractive
results of Zara Casual with lowest price with highest price variance. Price of Zara Causal has the
cheapest price but has highest volatility due to higher SD.
ECON940 5
Business
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Sport Clothes
65.8587
2.16925
66.6037
#N/A
6.85978
47.0565
-1.7336
-0.0704
18.6058
56.4853
75.0911
658.587
10
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Casual
50.1448
2.2087
51.8144
#N/A
6.98453
48.7837
1.05639
-0.5681
25.4507
36.2176
61.6683
501.448
10
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
37.3218
2.6469
36.6685
#N/A
8.37025
70.061
-1.3279
0.10224
23.8008
25.0698
48.8706
373.218
10
4. In order test that there is a significant difference of average prices across these two gender
targets, t-Test: Two-Sample Assuming Unequal Variances has been employed. Following is the
hypothesis,
Hypothesis:
H0: µ1 = µ2
Ha: µ1 ≠ µ2
Test Statistics:
Level of significance: α = 0.05
Decision Rule: Reject H0, if t-stat > tc
Do not Reject H0, if t ≤ tc
ECON940 6
Calculation:
t-Test: Two-Sample Assuming Unequal Variances
Mean
Variance
Observations
Hypothesized Mean Difference
df
t Stat
P(T<=t) two-tail
t Critical two-tail
Women
Men
69.12926 63.89488
903.0444 604.7279
60
60
0
114
1.044175
0.298613
1.980992
Conclusion:
Since t-stat < t-critical, we do not reject Ho at 5% significance level and we can conclude
that there is no significance difference in the average prices across two gender targets.
5. In order to test the claim that there is no significant difference of the average product price of
the different brands, ANOVA: Single Factor has been employed. Following is the hypothesis:
Hypothesis:
H0: µ1 = µ2 = µ3 = µ4
Ha: there is a significant difference in average prices of different brands
Test Statistics: F = MSC/MSE
Level of significance: α = 0.05
Decision Rule: Reject H0, if F > Fc
Do not Reject H0, if F ≤ Fc
Calculation:
Anova: Single
ECON940 7
Factor
SUMMARY
Groups
Calvin Klein
Zara
Tommy Hilfiger
Ralph Lauren
Count
30
30
30
30
ANOVA
Source of
Variation
Between Groups
Within Groups
SS
9769.178
80011.35
Total
89780.53
Sum
2087.067
1533.254
2216.077
2145.051
Average
69.56889
51.10847
73.86924
71.50168
Variance
546.5483
192.3726
1042.671
977.4204
df
MS
F
P-value
F crit
3 3256.393 4.721099 0.003811 2.682809
116 689.753
119
Conclusion:
Since F > Fc, we reject Ho at 5% significance level and we can conclude that there is a significant
difference in average prices of different brands.
6. In order to test there is a difference in product prices between Business, Sport and Casual
clothes, due to differences in fabrics, manufacturing techniques and targeted customers,
ANOVA: Single Factor has been employed has been used:
Hypothesis:
H0: µ1 = µ2 = µ3
Ha: there is a significant difference of average prices across the three styles
Test Statistics: F = MSC/MSE
Level of significance: α = 0.05
Decision Rule: Reject H0, if F > Fc
Do not Reject H0, if F ≤ Fc
ECON940 8
Calculation:
Anova: Single
Factor
SUMMARY
Groups
Business
Sport Clothes
Casual
ANOVA
Source of
Variation
Count
Sum
Average Variance
40 3750.009 93.75023 523.4461
40 2594.356 64.85891 193.4688
40 1637.083 40.92708 150.0299
SS
df
MS
F
Between Groups
Within Groups
55969.68
33810.85
2 27984.84 96.83952
117 288.9816
Total
89780.53
119
P-value
F crit
1.54E25 3.073763
Since F > Fc, we reject H0 at 5% significance level and we can conclude that there is a significant
difference of average prices across the three styles.
7. In order test whether there is significant difference between average prices of ZARA’s clothes
of different styles ANOVA: Single Factor has been employed has been used. This test will assist
in analysing that the claim that Zara have different prices for different clothes style. Following is
the Hypothesis:
Hypothesis:
H0: µ1 = µ2 = µ3
Ha: there is significant difference between average prices of ZARA’s clothes of different styles
Test Statistics: F = MSC/MSE
Level of significance: α = 0.05
ECON940 9
Decision Rule: Reject H0, if F > Fc
Do not Reject H0, if F ≤ Fc
Calculation:
Anova: Single
Factor
SUMMARY
Groups
Business
Sport Clothes
Casual
ANOVA
Source of
Variation
Count
Sum
Average Variance
10 658.5872 65.85872 47.05652
10 501.4484 50.14484 48.78372
10 373.2185 37.32185 70.06104
SS
df
MS
Between Groups
Within Groups
4085.695
1493.111
2 2042.847
27 55.30042
Total
5578.806
29
F
36.9409
P-value
F crit
1.87E08 3.354131
Since F > Fc, we reject H0 at 5% significance level and we can conclude that there is significant
difference between average prices of ZARA’s clothes of different styles.
Conclusion
From the above analysis it is clear that Zara has the cheapest price as compared to other
brands having lowest standard deviation. Tommy Hilfiger is leading in price with negative
skewness and kurtosis. Moreover, this analysis also states that different styles are priced
differently. The mean price of Business style is $93.7 which means that different brand sell
business clothes on higher price as compared to causal and sport clothes. Zara business clothes
has highest mean with 65.85 while lowest for causal with 37.3 for both men and women. Both
ECON940 10
gender clothes by Zara are priced on same average price. Analysis also states that different brand
priced their clothes different; they do not have same price range. The cheapest is Zara while
Calvin Klein, Tommy Hilfiger and Ralph Lauren are on same line. Business clothes are
manufactured on highest cost due to the fabrics and customer needs while, sports comes after
business and hence the cheapest cost is for causal with $40.9. Hence, there is a significant
difference of average prices across the three styles. To conclude, it is clear that Zara gave
different average prices for its clothes of different styles.
Implications
The purpose of this study was to determine the Australian fashion industry and the price
competition among the main competitors i.e. Zara, Calvin Klein, Tommy Hilfiger and Ralph
Lauren with respect to different style and genders. This study also highlights brand preference
that is being selected by the consumer. This study also take into consideration the cloth style and
brand most preferred by the consumer regardless of price. The implication of this study will
assist in price the new product as well in giving preference over which style they should produce
more with the average price that is consider by the consumer.
ECON940 11
References
Clothing Retailing in Australia (2017), https://www.ibisworld.com.au/industry-trends/marketresearch-reports/retail-trade/other-store-based-retailing/clothing-retailing.html
Hamburg M., (2016), Statistical Analysis for Decision Making, Harcourt Brace Jovanovich
The 2016 Australian Fashion Report, (2016), https://baptistworldaid.org.au/wpcontent/uploads/2016/05/2016-Australian-Fashion-Report.pdf
ECON940 12
Appendix
Figure 1.Unit Price of The Product From Different Brands
Calvin Klein
94.27
70.71
60.48
61.83
73.78
82.79
65.26
48.48
78.00
81.44
128.17
31.00
37.42
64.86
63.02
84.65
84.74
86.82
50.59
41.17
57.74
29.09
63.03
60.27
56.75
44.24
109.63
101.15
100.12
75.55
Zara Tommy Hilfiger Ralph Lauren
47.53
60.73
63.77
48.87
87.92
97.55
58.19
47.07
64.47
32.64
96.78
149.02
54.35
83.47
29.53
51.75
92.30
95.28
75.09
35.89
131.19
61.67
118.92
54.59
31.28
98.56
100.66
42.92
72.89
111.94
72.02
49.06
32.78
28.04
14.38
80.25
60.34
79.39
89.56
59.32
130.20
115.84
34.98
41.18
22.08
56.49
47.57
38.35
25.07
29.02
41.41
36.22
44.24
62.18
70.48
87.10
77.11
39.91
60.49
45.88
46.55
72.93
60.77
48.50
98.93
41.05
52.36
52.82
94.84
66.86
123.02
89.81
38.36
15.42
74.94
51.88
56.38
73.80
47.16
103.36
60.55
54.65
105.25
44.30
66.34
86.78
42.48
73.45
124.03
59.07
ECON940 13
Calvin Klein
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Zara
69.568886
4.2682872
65.058881
#N/A
23.378372
546.54827
0.1115485
0.4011992
99.088022
29.08674
128.17476
2087.0666
30
Tommy Hilfiger
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
51.1085
2.53228
51.8144
#N/A
13.8698
192.373
-0.7767
-0.0534
50.0214
25.0698
75.0911
1533.25
30
Ralph Lauren
73.869242
5.895396
76.162827
#N/A
32.290414
1042.6708
-0.86718
-0.064825
115.81856
14.383714
130.20227
2216.0773
30
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
71.5017
5.70795
64.1227
#N/A
31.2637
977.42
-0.0779
0.60002
126.944
22.0753
149.019
2145.05
30
ECON940 14
Figure 2.Unit Price of The Product From different styles
Business Sport Clothes Casual
94.27
70.71
60.48
82.79
73.78
61.83
128.17
78.00
65.26
84.65
81.44
48.48
84.74
64.86
31.00
86.82
63.02
37.42
63.03
57.74
50.59
109.63
60.27
41.17
101.15
56.75
29.09
100.12
75.55
44.24
58.19
54.35
47.53
75.09
51.75
48.87
72.02
61.67
32.64
60.34
42.92
31.28
59.32
36.22
28.04
56.49
48.50
34.98
70.48
52.36
25.07
66.86
51.88
39.91
66.34
47.16
46.55
73.45
54.65
38.36
87.92
60.73
35.89
96.78
47.07
14.38
92.30
83.47
41.18
118.92
72.89
47.57
98.56
49.06
29.02
130.20
79.39
44.24
123.02
87.10
60.49
103.36
72.93
52.82
105.25
98.93
15.42
124.03
86.78
56.38
97.55
63.77
29.53
149.02
64.47
32.78
95.28
54.59
22.08
131.19
80.25
38.35
100.66
62.18
41.41
111.94
77.11
45.88
ECON940 15
89.56
115.84
94.84
89.81
Business
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
60.77
74.94
73.80
60.55
41.05
44.30
42.48
59.07
Sport Clothes
93.7502
3.61748
94.5542
#N/A
22.8789
523.446
-0.4202
0.26754
92.5339
56.4853
149.019
3750.01
40
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Casual
64.8589
2.19925
62.6018
#N/A
13.9093
193.469
-0.3852
0.23375
62.7152
36.2176
98.9329
2594.36
40
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
40.9271
1.93668
41.1742
#N/A
12.2487
150.03
-0.2363
-0.054
50.8754
14.3837
65.2591
1637.08
40
ECON940 16
Figure 3. Zara products stores for the three different styles
ZARA
Business Sport Clothes Casual
58.19
54.35
47.53
75.09
51.75
48.87
72.02
61.67
32.64
60.34
42.92
31.28
59.32
36.22
28.04
56.49
48.50
34.98
70.48
52.36
25.07
66.86
51.88
39.91
66.34
47.16
46.55
73.45
54.65
38.36
Business
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Sport Clothes
65.8587
2.16925
66.6037
#N/A
6.85978
47.0565
-1.7336
-0.0704
18.6058
56.4853
75.0911
658.587
10
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Casual
50.1448
2.2087
51.8144
#N/A
6.98453
48.7837
1.05639
-0.5681
25.4507
36.2176
61.6683
501.448
10
Mean
Standard Error
Median
Mode
Standard
Deviation
Sample
Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
37.3218
2.6469
36.6685
#N/A
8.37025
70.061
-1.3279
0.10224
23.8008
25.0698
48.8706
373.218
10
ECON940 17
Figure 4 average prices across these two gender targets
t-Test: Two-Sample Assuming Unequal Variances
Women
Men
69.12926 63.89488
903.0444 604.7279
60
60
0
114
1.044175
0.298613
1.980992
Mean
Variance
Observations
Hypothesized Mean Difference
df
t Stat
P(T<=t) two-tail
t Critical two-tail
Figure 5. Average product price of the different brands
SUMMARY
Groups
Calvin Klein
Zara
Tommy Hilfiger
Ralph Lauren
Count
30
30
30
30
ANOVA
Source of
Variation
Between Groups
Within Groups
SS
9769.178
80011.35
Total
89780.53
Sum
2087.067
1533.254
2216.077
2145.051
df
Average
69.56889
51.10847
73.86924
71.50168
Variance
546.5483
192.3726
1042.671
977.4204
MS
F
P-value
F crit
3 3256.393 4.721099 0.003811 2.682809
116 689.753
119
ECON940 18
Figure 6. Average prices across the three styles
SUMMARY
Groups
Business
Sport Clothes
Casual
ANOVA
Source of
Variation
Count
Sum
Average Variance
40 3750.009 93.75023 523.4461
40 2594.356 64.85891 193.4688
40 1637.083 40.92708 150.0299
SS
df
MS
F
Between Groups
Within Groups
55969.68
33810.85
2 27984.84 96.83952
117 288.9816
Total
89780.53
119
P-value
F crit
1.54E25 3.073763
Figure 7. ZARA’s clothes of different styles
SUMMARY
Groups
Business
Sport Clothes
Casual
ANOVA
Source of
Variation
Count
Sum
Average Variance
10 658.5872 65.85872 47.05652
10 501.4484 50.14484 48.78372
10 373.2185 37.32185 70.06104
SS
df
MS
Between Groups
Within Groups
4085.695
1493.111
2 2042.847
27 55.30042
Total
5578.806
29
F
36.9409
P-value
F crit
1.87E08 3.354131