Lesson 5:
Basic Data Analysis:
Descriptive Statistics
&
Qualitative Methodologies:
Focus Groups & Observation
1
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
2
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
3
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

4
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 highincome earners differ from low-income
earners in the frequency of usage of
their American Express card
5
Differences Analysis… Cont’d

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
6
How satisfied are you with the services of Singtel?
1 – very satisfied , 5 – very unsatisfied
Heavy Users
Average Rating = 1.5
Light users
Average Rating = 3.5
7
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?
8
Associative Analysis… cont’d

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 crosstabulation

E.g. spend more on customer service training
= more customer service excellence? By how
much?
9
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?
10
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
11
Understanding Data via
Descriptive Analysis… cont’d

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
12
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
13
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.
14
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
15
Measures of Variability… cont’d
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
16
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%
17
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
18
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

19
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)
20
Focus Groups & Observations
21
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
22
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 one’s product so as to improve
product or service communication with them
23
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
24
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 Moderator’s Roles and Responsibility?
How to Report and Use the Findings?
25
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
26
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 researcher’s need to have
particular types of people in the focus group
discussion
27
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
28
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
29
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
30
Operational Questions About
Focus Groups

The focus group moderator’s 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
31
Operational Questions About
Focus Groups

The focus group moderator’s 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 moderator’s introductory remarks are
influential and they set the tone of the entire session
32
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
33
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
34
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
35
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

36
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

37
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

38
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

39
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
40
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
 Moderator’s fees
 Facilities rental fees + videotaping equipments
charges
41
Brief Steps in Conducting a
Focus Group
Prepare for the Group:
Select a focus group
facility and recruit
the participants
Select a Moderator:
Create a
Discussion guide
Prepare the Focus
Group Report
Conduct the Focus Group
42
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 researcher’s 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’
43
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
44
Types of Observation
4 general ways of organizing observations:
 Direct versus Indirect
 Disguised versus Undisguised
 Structured versus Unstructured
 Human versus Mechanical
45
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
Kellogg’s used direct observation to
understand people’s behaviour during
breakfast
46
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
47
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
48
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
49
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
rep’s behaviour on sales call must all be used/done
with the subject’s 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
50
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 observer’s attention to
specific factors
51
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?)
52
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
53
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 hightechnology area recently and the combination of
telecommunications, computer hardware and
software programmes has created a very useful
research tool
54
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
55
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
56
Limitations of Observational Data


The greatest drawback is the researcher’s
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
57
Other Qualitative Research
Techniques
1. Protocol Analysis
2. Projective Techniques
 Word Association Test
 Sentence Completion Test
 Picture Test
 Cartoon or Balloon Test
 Role-Playing Activity
58