Research: Text and Cases

302 Marketing

CASE STUDY 3
Discriminant Analysis
Problem
arm all its TSI (Teritorial Sales
Procter and Gamble (Bangalore Divn), an FMCG Major, is planning to
enhance their performance as they could book
Inspector) agents with a palmtop system. This would
more orders faster and accurately which would help it to compete with its main rival. (HLL has already

distributed the systems to all its TSI).

the last two years. Hence the head
The Bangalore division has been achieving their sales target for
to recommend to the H.O. at Mumbai to provide all its TSI with the
of Bangalore Divn. has decided
latest palmtops.
to screen TSls of Bangalore Divn. on the
P&G Mumbai has decided to use discriminant analysis
territories. The classification will
basis of efficiency and Potential to service dealers in their respective
be 'potentially successful TSI' and 'potentially unsuccessful TSI, based on the information supplied
TSIs are being considered in terms of the above
by the Bangalore Divn. In total cases of,24
discriminant function in order to find out:
1. the percentage of TSIthat the discriminant function is able to classify correctly.

2. statisticalsignificance of the discriminant function.

between 'successful' and
3. which independent variables are relatively better in discriminating
unsuccessful' TSI.
4. how to classify a future TSI into one of the two groups-and 'potentially unsuccessful TST".

Input Data
follows:
The dependent variable is a categorical variable having two categories with codes as
Potentially Unsuccessful TSI = 1

Potentially Successful TSI = 2

of number of years, sales in rupees per year, and

Independent variables are experience in terms
number of dealers covered by each TSI.

Prepared by Biswajit Mishra, Imran Ahmed, Sharmistha Kundu, and Vikrant Shar1na
 Discriminant Analysis for Clossification and Prediction 303
Input Data for Discriminant Analysis

S. NO. POTENTIAL YEAREXP SALES_YR DLR_CVR

1 1 5 74500 32
2 2 4 185000 21
3 1 2 115000 29
4 2 7 145600 19
5 1 89500 37
6 1 5 79000 31
7 2 4 135000 23
8 1 3 115500 29
9 2 5 152000 25
10 2 7 175000 19
11 1 2 98000 17
12 2 5 130000 27

13 2 8 189500 21
14 2 5 150000 20

15 1 3 112000 39

16 1 2 94500 30

17 2 3 164500 29

18 1 4 78500 34

19 2 125500 17

20 1 5 135000 29

21 8 85000 36

22 2 5 105500 21

23 2 8 148500 27

24 1 2 94500 24