Business Statistics

Hypothesis Testing
Submitted by: 1. Bhavin Mehta
2. Kajal Neve

FACULTY NAME: - Ms. Pravida Raja

SIGN: - _____________________
DATE: - _____________________
Introduction:-
From a modest start in 1937, when handcarts were used to distribute Colgate Dental Cream Toothpaste,
Colgate-Palmolive (India) today has one of the widest distribution networks in India - Colgate available
in almost 5.8 + million retail outlets across the country. The Company has grown to an Rs.4490 crore plus
organization with an outstanding record of enhancing value for its strong shareholder base. The company
leads the 7600 crore Indian toothpaste market by holding 53.2% of the value market share in 2016-17.

Since 1976, Colgate has worked in close partnership with the Indian Dental Association (IDA) to spread
the message of oral hygiene to children across the country under its 'Bright Smiles, Bright Futures' Schools
Dental Education Program. This program has successfully reached more than 142 million school children
between the age of 6-14 years across 3,27,000 schools in urban and rural India across the country since
its launch. In the year 2016-17 alone, the BSBF program reached 8.2 million children across the country.
The program focuses on children so that the message of good oral hygiene is carried home to families and
the community at large. In 2004, as an additional effort to create awareness for good oral hygiene 'Oral
Health Month' (OHM), was introduced. Since its launch, OHM is conducted each year during October-
November, where free dental check-ups are conducted by Colgate in partnership with Indian Dental
Association across the country.

The strong relationship and the trust of generations of consumers, trade and the dental profession built
over decades of operations in India has made Colgate a trusted household name. Colgate was ranked as
India's #1 Most Trusted Brand across all categories for seven consecutive years from 2011 to 2017 by
Brand Equity's Most Trusted Brand Survey, conducted by Nielsen. It is the only brand to be in the top
three since the inception of the survey in 2001. Prior to this, Colgate was also rated as the no.1 brand by
the A&M - MODE Annual Survey for India's Top Brands for eight out of nine years during the period
1992 to 2001.

Objective: To find out is there any difference in volume of share price of Colgate Palmolive
Toothpaste and Dabur Red Toothpaste.
 T-test: Assuming two sample equal Variance

 About the hypothesis testing:

Hypothesis testing was introduced by Ronald Fisher, Jerzy Neyman. Karl

Pearson and Pearson’s son, Egon Pearson. Hypothesis testing is a statistical
method that is used in making statistical decisions using experimental
data. Hypothesis Testing is basically an assumption that we make about the
population parameter.

Key terms and concepts:

 Level of Significance: In this, we accept or reject the null hypothesis.
E.g.: α=0.05

Assumption:
1. Volume of share price of Colgate Palmolive Toothpaste and Dabur Red
Toothpaste are Normally Distributed.
2. Population variance is unknown and equal.
3. Samples of both Colgate Palmolive and Dabur Red are Independent.
Hypothesis testing:
µ1: Population mean of share price of Colgate Palmolive Toothpaste
µ2: Population mean of share price of Dabur Red Toothpaste

H0:μ1-μ2=0
H1:μ1-μ2≠

Level of significance α = 0.01

Data: We have collected online monthly share price of Colgate Palmolive & Dabur
Red Toothpaste from this web site: www.yahoofinance.com
 Colgate
Dabur Red
Palmolive
Toothpaste
Toothpaste
(currency
(currency in
in USD)
Date USD)
01-10-16 71.360001 384.75
01-11-16 65.230003 426.9
01-12-16 65.440002 478.75
01-01-17 64.580002 421.55
01-02-17 72.980003 391.45
01-03-17 73.190002 383.3
01-04-17 72.040001 369.4
01-05-17 76.360001 328.4
01-06-17 74.129997 325.05
01-07-17 72.199997 355.6
01-08-17 71.639999 349.7
01-09-17 72.849998 344.3
01-10-17 70.449997 332.85
01-11-17 72.449997 305
01-12-17 75.449997 315.1
01-01-18 74.239998 310
01-02-18 68.970001 292.1
01-03-18 71.68 279.95
01-04-18 65.230003 286.75
01-05-18 63.09 277.35
01-06-18 64.809998 276.9
01-07-18 67.010002 276
01-08-18 66.410004 278.15
01-09-18 66.949997 283.55
01-10-18 67.07 291.55

Test Statistics:
(̅̅̅
𝑥1 ) − (̅̅̅
𝑥2 ) − (𝜇1 − 𝜇2 )
𝑡=
𝑠12 (𝑛1 − 1) + 𝑠22 (𝑛2 − 1) 1 1
√ √ +
𝑛1 + 𝑛2 − 2 𝑛1 𝑛2

𝑑𝑓 = 𝑛1 + 𝑛2 − 2
Analysis:
t-Test: Two-Sample Assuming Equal Variances

Colgate
Palmolive Dabur Red
Toothpaste Toothpaste
Mean 69.8324 334.576
Variance 15.2236619 3071.465233
Observations 25 25
Pooled Variance 1543.344448
Hypothesized Mean Difference 0
Df 48
t Stat -23.82588519
P(T<=t) one-tail 1.51465E-28
t Critical one-tail 1.677224196
P(T<=t) two-tail 3.0293E-28
t Critical two-tail 2.010634758

Rejection Rule:
Reject H0 if,
|t| ≥ tα/2, df
Therefor; 23.83 > 2.01
Hence reject H0.

Statistical Conclusion:
There is a difference in share price of Colgate Palmolive & Dabur red toothpaste
during the year of 2016-2018.
Business Implication:
The above conclusion shows the volume of share price of Colgate Palmolive is
greater than Dabur Red toothpaste, so both the product Colgate Palmolive & Dabur
Red toothpaste are independent to each other.