Statistics and Quantitative Methods – A Consultancy Project

Background Information

BuyEasy is a catalogue retailer of gift items. Its business comprises primarily of sending catalogues to potential customers to solicit sales. Its operations are relatively simple. It has a large warehouse for its impressive range of inventory, ranging from stationery sets and stuffed toys to handphones and MP3 players. The warehouse also serves as a sales and distribution centre to receive orders through its telephone hotlines and to courier ordered goods to its customers.

The remaining part of BuyEasy is a large administrative department, comprising functional sections such as accounting and finance, human resources and marketing. This project involves the marketing section which does substantial marketing research on customer purchasing patterns.

Business Issues

BuyEasy is currently preparing for a special Christmas promotion campaign. Among other things, it wants to generate more information before deciding on the important parameters of the campaign.

For the past several years, BuyEasy has set aside a non-trivial budget to encourage its customers to be Premier members by paying a nominal one-time fee. Such members are entitled to special promotions and discounts. It is expected that Premier members purchase more gifts than non-members, on average. However, there has not been any statistical analysis to empirically test this expectation.

Given the nature of the gifts in the catalogue, BuyEasy also believes that customers who are married with children are likely to make more purchases as compared to those who are single or who are married but not have children. This belief has also not been empirically tested via statistical analysis.

The marketing section has accumulated a database of 1,000 of its customers. The following variables (comprising transactional data and demographic characteristics) have been captured in the database:

1. idnum = identification number
2. expend = average expenditure per month
3. numpur = average number of purchases per quarter
4. age = age of customer
5. gender = gender of customer
6. income = annual income of customer
7. race = race of customer
8. marital = marital status of customer
9. member = whether customer is a Premier member

More information can be found in the SPSS data set "project_data.sav".

Task #1 (ANOVA)

BuyEasy is interested to find out if and how the average number of purchases per quarter (i.e., numpur) may be associated with the customer’s marital status (i.e., marital) and Premier membership status (i.e., member). Further, BuyEasy is interested to know if there is an interaction effect between marital status and Premier membership status.

The marketing section has employed a statistical consultant to do the above analysis. You are the consultant engaged by BuyEasy.

[30 marks]

Task #2 (Multiple Regression)

To further plan for its Christmas promotion campaign, BuyEasy wants to know the determinants of the average expenditure per month (i.e., expend). In particular, it wants to know if and how this dependent variable may be associated with demographic independent variables such as the customer’s age, gender, income, marital status and Premier membership status.

In addition to the above (i.e., as a separate analysis), since preliminary results show that gender is not statistically significant, BuyEasy wonders if there may be a significant gender*age interaction effect instead.

Again, you are the consultant engaged by BuyEasy to perform the above analyses.

[60 marks]

The marketing section is keen to know how business issues and problems can be addressed using ANOVA and multiple regression. In particular, it has asked you to list two examples of business applications using ANOVA and another two examples of business applications using multiple regression.

[10 marks]

Deliverables

You are required to do whatever statistical analyses are necessary to achieve both Task #1 and Task #2 as specified earlier.

At the end of the project, you are required to submit the following deliverables:

1. A report of not more than eight (8) pages, excluding computer printouts. Font size 12 and double spacing should be used to prepare the report.
2. A set of presentation slides. This should not exceed twenty (20) slides.
3. A VCD or DVD recording of your presentation to BuyEasy. This should not exceed eight (8) minutes of recording time.

[ Note: Task #3 should be included in the report but not the presentation slides and recording].

[Total = 100 marks]

Generally, a consultant’s report and presentation are expected to be concise and readable/understandable, and not full of technical jargon. Therefore, it is very important that you think and plan before you write or make a presentation.

Price: $22.26

Solution: The downloadable solution consists of 11 pages, 1126 words and 10 charts.
Deliverable: Word Document