WHAT IS HYPOTHESI TESTING

In statistics, we may divide statistical inference into two major part: one is estimation
and another is hypothesis testing. Before hypothesis testing we must know about
hypothesis. so we can define hypothesi as below-

A statistical hypothesis is a statement about a population which we want to verify on

the basis of information which contained in a sample.

Example of statistical hypothesis

Few examples of statistical hypothesis related to our daily life are given below-

o The court assumes that the indicted person is innocent.

o A teacher assumes that 80% of the student of his college is from a lower-
middle-class family.
o A doctor assumes that 3D(Diet, Dose, Discipline) is 95% effective to the
diabetes patient.
o A beverage company claims that its new cold drinks are superior to the other
drinks available in the market, etc.
A statistical test mainly involves four steps:

o Evolving a test statistic

o To know the sampling distribution of the test statistic
o Selling of hypotheses testing conventions
o Establishing a decision rule that leads to an inductive inference about the
probable truth.

Types of statistical hypothesis

o Null hypothesis
o Alternative hypothesis

Null hypothesis

A null hypothesis is a statement, which tells us that no difference exists between the
parameter and the statistic being compared to it. According to Fisher, any hypothesis
tested for its possible rejection is called a null hypothesis and is denoted by H0.

Alternative hypothesis
The alternative hypothesis is the logical opposite of the null hypothesis. The rejection
of the null hypothesis leads to the acceptance of the alternative hypothesis. It is
denoted by H1.

For example, with a coin-tossing experiment, the null and alternative hypothesis may
be formed as,

H0: the coin is unbiased.

H1: the coin is biased.

Depending on the population distribution, the statistical hypothesis are two types,

o Simple hypothesis:when a hypothesis completely specifies the distribution of

the population, then the hypothesis is called a simple hypothesis.
o Composite hypothesis: when a hypothesis does not completely specify the
distribution of the population, then the hypothesis is called a composite
hypothesis
o
Null: Two sample means are equal.

Alternate: Two sample means are not equal.

To reject a null hypothesis, one needs to calculate test statistics, then compare the result with the
critical value. If the test statistic is greater than the critical value, we can reject the null hypothesis.

A critical value is a point (or points) on the scale of the test statistic beyond which we reject the null
hypothesis. We derive the level of significance (α) of the test.

Critical value can tell us the probability of two sample means belonging to the same distribution. The
higher the critical value means the lower the probability of two samples belonging to the same
distribution

The general critical value for a two-tailed test is 1.96, which is based on the fact that 95 percent of
the area of a normal distribution is within 1.96 standard deviations of the mean.

Critical values can be used to do hypothesis testing in the following ways:

 Calculate test statistic.

 Calculate critical values based on significance level alpha.
 Compare the test statistic with critical values.

DISTRIBUTION

Another important statistical concept to understand is distribution. When the population is infinitely
large, it’s not feasible to validate any hypothesis by calculating the mean value or test parameters on
the entire population. In such cases, we assume a population is some type of a distribution.

While there are many forms of distribution, the most common are binomial, Poisson and discrete.

You must determine the distribution type to calculate the critical value and decide on the best test to
validate any hypothesis.

Now that we’re clear on population, sample and distribution, let’s learn about different kinds of tests
and the distribution types for which they are used.

P VALUE-we know, critical value is the point beyond which we reject the null hypothesis. P-value, on
the other hand, is the probability to the right of the respective statistic (z, t or chi). The benefit of
using p-value is that it calculates a probability estimate, which means we can test at any desired level
of significance by comparing this probability directly with the significance level.
For example, assume the z-value for a particular experiment comes out to be 1.67 which is greater
than the critical value at five percent (1.64). Now, to check for a different significance level of one
percent, we calculate a new critical value.

However, if we calculate p-value for 1.67 and it comes to be 0.047, we can use this p-value to reject
the hypothesis at a five percent significance level since 0.047 < 0.05

Z-TEST

In a z-test, we assume the sample is normally distributed. A z-score is calculated with population
parameters such as population mean and population standard deviation. We use this test to validate
a hypothesis that states the sample belongs to the same population.

Null: Sample mean is same as the population mean.

Alternate: Sample mean is not same as the population mean.

The statistic used for this hypothesis testing is called z-statistic, the score for which we calculate as:

z = (x — μ) / (σ / √n), where

x=sample mean

μ=population mean

σ / √n= population standard deviation

If the test statistic is lower than the critical value, accept the hypothesis.

T-TEST

We use a t-test to compare the mean of two given samples. Like a z-test, a t-test also assumes a
normal distribution of the sample. When we don’t know the population parameters (mean and
standard deviation), we use t-test.

THE THREE VERSIONS OF A T-TEST

Independent sample t-test: compares mean for two groups

Paired sample t-test: compares means from the same group at different times

One sample t-test: tests the mean of a single group against a known mean

The statistic for this hypothesis testing is called t-statistic, the score for which we calculate as:

t=(x1 — x2) / (σ / √n1 + σ / √n2),

where

x1=mean of sample 1

x2=mean of sample 2

n1=sample size 1
n2=sample size 2

There are multiple variations of the t-test.

CHI-SQUARE TEST

We use the chi-square test to compare categorical variables.

THE TWO TYPES OF CHI-SQUARE TEST

Goodness of fit test: determines if a sample matches the population

A chi-square fit test for two independent variables: used to compare two variables in a contingency
table to check if the data fits

A small chi-square value means that data fits.

A large chi-square value means that data doesn’t fit.

The hypothesis we’re testing is:

Null: Variable A and Variable B are independent.

Alternate: Variable A and Variable B are not independent.
The statistic used to measure significance, in this case, is called chi-square statistic. The formula we
use to calculate the statistic is:

Χ2 = Σ [ (Or,c — Er,c)2 / Er,c ] where

Or,c=observed frequency count at level r of Variable A and level c of Variable B

Er,c=expected frequency count at level r of Variable A and level c of Variable B

ANOVA
We use analysis of variance (ANOVA) to compare three or more samples with a single test.

THE TWO MAJOR TYPES OF ANOVA

One-way ANOVA: Used to compare the difference between three or more samples/groups of a single
independent variable.
MANOVA: Allows us to test the effect of one or more independent variables on two or more
dependent variables. In addition, MANOVA can also detect the difference in correlation between
dependent variables given the groups of independent variables.
BASIC DATA ANALYIS USING SPSS-((Statistical Package for the Social Sciences)- commonly used in
social sciences and health fields-(https://www.ibm.com/account/reg/us-en/signup?formid=urx-
19774)

How do you use SPSS for data analysis and interpretation?

Step 1: Define your research question and hypothesis. ...

Step 2: Prepare your data set. ...

Step 3: Choose your analysis method. ...

Step 4: Run your analysis and check your output. ...

Step 5: Report your results and findings. ...

Step 6: Evaluate your analysis and interpretation.

Explore your data-Numerical: expressed by numbers ■ Discrete: numbers take on integer values only
(number of children, number of siblings) ■ Continuous: numbers can take on decimal values (height,
weight)

Categorical: expressed by categories (also known as factors/groups) ■ Nominal: no meaningful order

between categories (gender, occupation) ■ Ordinal: categories can be put in meaningful order
(agreement, level of pain, etc.)

Numerical data can be parametric or non-parametric – Simply put, parametric data approximately
fits a normal distribution ■ Data are symmetric around a central point ■ “Bell curve” ■ Also known as
normally distributed
For statistical tests, we use two types of variables: – Independent Variable- variation does not
depend on another variable ■ Usually denoted as X ■ Typically represents what the researcher set up
(treatment, group, etc.) – Dependent Variable – value depends on another variable (the independent
one) ■ Usually denoted as Y ■ Represents the variable that the researcher is interested in ■ Output
or outcome

Test statistic ■ Variable calculated from sample data and used in hypothesis test ■ Used to determine
whether a test was significant or not – Degrees of Freedom ■ Number of values of quantities that
can be assigned to a statistical distribution ■ Should be reported with test results – P-value ■
Measure of significance for the test statistic ■ Typically 0.05 is the cutoff value

1. Look at data

2. Identify data

3. Graph/Describe data

4. Formulate Question (Hypothesis)

2. Analyze your data

1. Set up hypothesis

2. Check normality

3. Select and run appropriate test

3. Interpret your results

1. Find the Test Statistic, DF, and P-value

2. Determine if significant

3. State if null hypothesis rejected or not

4. Write result

5. Present appropriate plot

What Is Consumer Market Research?

Consumer market research aims to analyze companies’ target consumers. It’s the art and science of
understanding the preferences, motivations, behaviors and buying patterns of consumers. This
research often employs a mix of qualitative methods (like focus groups or one-on-one interviews)
and quantitative methods (like surveys or data analytics).

At its core, it offers insights into what consumers think about a product or service, their experience
with it, and how they perceive its value. It also delves into their lifestyle, cultural influences, and
even psychological triggers that influence their purchase decisions. Without this in-depth
understanding, businesses might be shooting in the dark, hoping their products or campaigns
resonate with an audience they don’t fully comprehend.
Moreover, consumer market research is not static. Consumer preferences evolve, new trends
emerge, and market dynamics shift. To keep pace, businesses must continuously update their
understanding of the market landscape.

Why Is It Important?

How essential is it for businesses to truly understand their consumers? Why is consumer market
research not just a nice-to-have but a need-to-have?

• Informed Decision-Making: At its most fundamental level, consumer market research provides
businesses with data-backed insights, helping them make informed decisions. Rather than relying on
gut feelings or assumptions, companies can use concrete information about their target audience to
guide product development, marketing strategies, and more.

• Risk Reduction: Launching a new product or campaign without adequate research is risky. For this
reason, market research significantly reduces uncertainties and potential financial risks by offering a
clearer picture of market reception and potential challenges.

• Competitive Advantage: Companies that invest in consumer market research often have a
competitive edge as they’re more in tune with the needs, wants, and pain points of their customers.
They can identify gaps in the market, capitalize on emerging trends faster, and offer solutions that
resonate more deeply with their target audience.

• Enhanced Customer Satisfaction: By understanding consumer preferences, businesses can tailor

their offerings to better meet customer needs, leading to increased satisfaction and loyalty. Satisfied
customers are not only more likely to repeat purchases but also act as brand advocates, spreading
positive word-of-mouth.

• Future Forecasting: This type of market research isn’t just about understanding the present; it’s
about predicting the future. By analyzing current consumer behavior and market trends, businesses
can forecast future demands, helping them stay ahead of the curve and prepare for upcoming
market shifts.

• Targeted Marketing Efforts: With insights from market research, businesses can design more
effective marketing campaigns. They can target specific demographics, utilize preferred
communication channels, and craft messages that resonate with their audience.

• Cost Efficiency: Consumer market research can save companies significant amounts in wasted
efforts and failed campaigns. By directing resources and strategies towards what’s proven to work,
businesses can achieve better results with less expenditure.
• Increased Revenue: A deeper understanding of consumer preferences and pain points leads to
improved product offerings and customer experiences. This not only results in increased sales but
also boosts customer lifetime value, as satisfied customers tend to stay loyal and make repeat
purchases.

• Building Trust and Brand Loyalty: Market research showcases a brand’s commitment to
understanding and serving its audience. When consumers see that a company values their feedback
and acts upon it, trust is fostered, leading to stronger brand loyalty.

• Enhanced Stakeholder Communication: Sharing consumer market research findings with

stakeholders, be it investors, partners, or internal teams, provides a data-driven foundation for
business strategies and decisions. It not only builds confidence but ensures everyone is aligned with
the company’s direction

Consumers today, locally, regionally, and globally are faced with a wide range of “advertising” online,
print, media, and through social networks.

Emerging Trends

The field of consumer market research is dynamic with several innovative trends reshaping how
businesses engage with their target audiences. Here’s a closer look:

• Integration of Big Data: With the rise of e-commerce and digital platforms, businesses have access
to vast amounts of data. Consumer market research is now increasingly centered around analyzing
these data points to derive actionable insights, be it purchase behavior, online interactions, or
browsing patterns.

• Mobile Research: As mobile devices become ubiquitous, market research is leveraging mobile
platforms for surveys, feedback, and even tracking consumer movement in physical retail spaces.
Mobile research offers real-time data and allows for more immediate and organic responses from
participants.

• Neuroscience in Research: Techniques like eye-tracking, facial expression analysis, and even brain
wave measurement are being incorporated into “consumer market research”. This neuroscientific
approach provides deeper insights into subconscious consumer reactions and emotions, which
traditional research methods might miss.

• AI: Consumer market research is now using AI algorithms to predict consumer behavior, segment
markets more effectively, and even generate consumer personas based on collected data.
• Ethnographic Research Goes Digital: While ethnography traditionally involved researchers
observing consumers in their natural environment, today’s digital tools allow for virtual ethnographic
research. This method captures consumer behavior in online settings, providing insights into their
digital journey.

• Increased Focus on Experience: With the experience economy in full swing, consumer market
research is placing a heightened emphasis on understanding the consumer experience. This extends
beyond the product to encompass the entire customer journey, from awareness to post-purchase.

Opportunities in Consumer Market Research

How can businesses harness the transformative power of ‘consumer market research’ to drive
growth and innovation? Let’s explore the multiple opportunities that this dynamic field presents to
forward-thinking companies:

• Personalized Marketing Strategies: With consumer market research providing more detailed
consumer insights, businesses can tailor their marketing strategies to target specific demographics,
psychographics, and behavioral segments, ensuring higher ROI on marketing investments.

• Product Development and Enhancement: Through consumer market research, businesses can
identify gaps in the market, allowing them to develop products or enhance existing ones to meet
unfulfilled needs. It reduces the risk of product failures and ensures alignment with consumer
demand.

• Competitive Analysis: Market research grants businesses the ability to understand their
competitors’ strengths and weaknesses better. By analyzing market share, brand perception, and
customer loyalty, companies can devise strategies to gain a competitive edge.

• Improved Customer Experience: A deep dive into this market research can help businesses identify
pain points in the customer journey. By addressing these issues, businesses can enhance the overall
customer experience, leading to increased loyalty and repeat business.

• Geographical Expansion: Consumer market research can provide invaluable insights into regional
consumer behaviors, preferences, and cultural nuances. Armed with this knowledge, businesses can
successfully expand into new territories with tailored offerings.

• Strengthening Brand Loyalty: Engaging in continuous market research allows businesses to remain
attuned to evolving consumer needs. By promptly addressing concerns and adapting to changing
preferences, companies can strengthen brand loyalty and foster long-term customer relationships.
• Forecasting and Future Planning: Consumer market research empowers businesses with the ability
to anticipate market shifts, emerging trends, and potential challenges. This foresight is crucial for
long-term planning, budget allocation, and strategic direction.

Challenges of Consumer Market Research

Consumer market research is not without challenges. So, what hurdles do businesses face in the
realm of consumer market research?

• Changing Consumer Behaviors: With trends emerging and fading rapidly, market research has to be
an ongoing effort. Today’s insights might be outdated tomorrow, making it crucial for businesses to
stay on their toes and continually update their understanding.

• Privacy Concerns: As businesses delve deeper into consumer market research, privacy concerns
arise. Regulations like GDPR and CCPA emphasize the protection of consumer data, making it
essential for researchers to ensure compliance and maintain public trust.

• Bias and Misinterpretation: Without a clear methodology and objective analysis, consumer market
research can be susceptible to bias. The interpretation of data is as critical as the data itself.
Misreading signals can lead to misguided strategies.

• Globalization and Cultural Nuances: For businesses operating globally, consumer market research
can be daunting. Understanding cultural nuances, regional preferences, and local competition
requires a diverse and holistic approach to research.

Research Methodologies

Consumer lifestyles are influenced on a constant basis by advertising messages from their home,
school, and work environment. SIS has expertise with innovative research methods that “tap into the
consumers’ minds” and follow them through their customer journey.

Consumer Qualitative Research

Qualitative research is an essential first step in the market research process. It helps marketers to
understand the fundamental reasons behind consumer choices. Analysts conduct this type of
research using unstructured questioning or observation. It complements quantitative analysis by
explaining its results.

Consumer Quantitative Research

Quantitative research gleans information from a healthy sample of individuals. This type of study
emphasizes the measurement side of things. Researchers produce statistical records to measure a
prevailing hypothesis or problem. Unlike qualitative analysis, quantitative research has a tight
structure.

Consumer Market Research Solutions

Consumer Market Research can help these businesses by uncovering the needs of a prospective
target market. Companies can use market research to test opinions, attitudes, usage and behaviors.
They can also use it to gain insight into the competition or new opportunities. Market research helps
firms to gauge the thought processes of the consumer. Analysts use several methods, including the
following:

• Focus Groups: Researchers can use focus groups as a type of qualitative research. They must first
gather a group of people. The researcher then asks them about their attitudes toward a product,
concept, or idea. The focus group format has several advantages. It’s a low-cost method, and
candidates are more likely to be forthright. It is handy for project evaluation and needs assessment
purposes.

• In-depth or one-on-one interviews: Market researchers use this tool to collect data from
consumers of rival products. They also use it in circumstances where their client needs an expert
opinion. They use it when gauging high-level executives, business owners, and critical opinion
influencers. They also use it for community leaders, specialists, and technicians. In-depth interviews
are useful to gain insights from experts on any delicate topic.

• Online Video Interviews: Researchers can now use FaceTime, Skype, and similar platforms to
interview participants. Video interviewing offers a real-time connection. It is cost-effective, thus
researchers can increase the variety of samples. Online interviews work well as a complement to
face-to-face interviews.

• Telephone Interviews: Researchers carry out telephone interviews, as their name suggests, over
the phone. They can use them as depth interviews, using a topic guide. Researchers also use
telephone interviews for quantitative research. They can conduct the interviews via a CATI
(Computer Aided Telephone Interviewing) system. This method allows the researcher to upload
responses right away for analysis.

• Online Surveys: Researchers favor this method for many reasons. It’s easy to profile prospective
respondents to ensure that they’re right for the survey. It’s also a cost-effective method. Researchers
can cross-link the information received with qualitative data. Online surveys also make it easy to
interview hard-to-reach respondents.

 Companies conduct market research before introducing new products

to determine their appeal to potential customers.
  Tools include focus groups, telephone interviews, and questionnaires.
 The results of market research inform the final design of the product
and determine how it will be positioned in the marketplace.
 Market research usually combines primary information, gathered
directly from consumers, and secondary information, which is data
available from external sources.
 Market research usually consists of a combination of:
 Primary research, gathered by the company or by an outside company
that it hires
 Secondary research, which draws on external sources of data

The following list is a snapshot of the kind of studies that have actually
been done in India.

 A study of consumer buying habits for detergents-frequency, pack

size, effect of promotion, brand loyalty and so forth.
 To find out the potential demand for ready-to-eat chapattis in
Mumbai City.
 To determine which of the three proposed ingredients- tulsi,
coconut oil or neem, the consumer would like to have in toilet soap.
 To find the effectiveness of the advertising campaign for a car
brand.
 To determine brand awareness and brand loyalty for a branded PC.
 To find the customer satisfaction level among consumers in
choosing a brand cellular phone handset.

Some Other Application of Marketing Research

Concept Research: During a new product launch, there would be several stages-for
example, concept development, concept testing, prototype development and
testing, test marketing in a designated city or region, estimation of total market size
based on the test marketing, and a national rollout or withdrawal of the product
based on the results.

The first stage is the development of a concept and its testing. The concept for a
new product may come from several sources

The idea may be from a brain-storming session consisting of company employees,

a focus group conducted among consumers, so the brainwave of a top executive.
Whatever may be its source; it is generally researched further through what is
termed as concept testing.
A concept test takes the form of developing a description of the product, its benefits,
how to use it, and so on, in about a paragraph, and then asking potential consumers
to rate how much they like the concept, how much they would be wiling to pay for
the product if introduced, and similar questions.

Product Research: Apart from product concept, research helps to identify which
alternative packaging is most preferred, or what drives a consumer to buy a brand
or product category itself, and specifics of satisfaction or dissatisfaction with
elements of a product. These days, service elements are as important product
features, because competition is bringing most products par with each other.

An example of product research would be to find out the reactions of consumers to

manual cameras versus automatic cameras. In addition to specific likes or dislikes
for each product category, brand preference within the category could form a part of
the research. The objective may be to find out what type of camera to launch and
how strong the brand salience for the sponsor’s brand is.

The scope of product research is immense, and includes products or brands at

various stages of the product life cycle – introduction, growth, maturity and decline.
One particularly interesting category of research is into the subject of brand
positioning. The most commonly used technique for brand- positioning studies
(though not the only one) is called Multidimensional Scaling.

Pricing Research: Pricing is an important part of the marketing plan. In the late
nineties in India, some interesting changes have been tried by marketers of various
goods and services. Newer varieties of discounting practices including buy-backs,
exchange offers, and straight discounts have been offered by many consumer
durable manufacturers. Most FMCG manufacturers/ marketers of toothpaste,
toothbrush, toilet soap, and talcum powder have offered a variety of price-offs or
premium-based offers which affect the effective consumer price of a product.

Price research can delve into questions such as appropriate pricing levels from the
customers’ point of view, or the dealer’s point of view. It could try to find out how the
current price of a product is perceived, whether it is a barrier for purchase, how a
brand is perceived with respect to its price and relative to other brands’ prices (price
positioning). An interesting area of research into pricing has been determining price
elasticity at various price points for a given brand through experiments or
simulations.
Distribution Research: Most marketing research focuses on consumers or buyers.
Sometimes this extends to potential buyers or those who were buyers but have
switched to other brands. But right now there is a renewed interest in the entire area
of logistics, supply chain and customer service at dealer locations. There is also
increasing standardization from the point of view of brand building, in displays at the
retail level, promotions done at the distribution of products including service levels
provided by current channels, Frequency of salespeople visits to distribution points,
routing/ transport related issues for deliveries to and from distribution points
throughout the channel, testing of new channels, channel displays, linkages
between displays and sales performance.

Advertising Research

The two major categories of research in advertising are:

Copy

Media

Copy Testing: It include research into all aspects of advertising-brand awareness,

brand recall, copy recall (at various time periods such as say after recall, week after
recall), recall of different parts of the advertisement such as the headline for prints
ads, slogan for TV ads, the star in an endorsement and so on. Other application
include testing alternative ad copies (copy is the name given to text or words used
in the advertisement, and the person in the advertising agency responsible for
writing the words is known as the copy writer) for a single ad, alternative layouts ( a
layout is the way all the element of the advertisement are laid out in a print
advertisement) with the same copy, testing of concepts or storyboards ( a
storyboards is a scene-by-scene drawing of a TV commercial which is like a rough
version before the ad is actually shot on film) of TV commercials to test for
positive /negative reactions, and many others.

A particular class of advertising research is known as Tracking Studies. When

advertising campaign is running, periodic sample surveys known as tracking studies
can be conducted to evaluate the effect of the campaign over a long period of time
such as six month or one year, or even longer. This may allow marketers to alter the
advertising theme, content, media selection or even longer. This may allow
marketers to alter the advertising theme, content, media selection or frequency of
siring /releasing advertisement and evaluate the effects. As opposed to a snapshot
provided by a one-time survey, tracking studies may provide a continuous or near
continuous mechanism. But here, one should be careful in assessing the impact of
the advertising on sales, because other factors could change along with time.
Media Research: The major category under this category is research into
viewership of specific television programmes on various TV channels. There are
specialize agencies like A.C. Nielsen worldwide which offer viewer ship data on a
syndicated basis (i.e., to anyone who wants to buy the data). In India, both ORG-
MARG and IMRB offer this service. Research could also focus on print media and
their readership. Here again, readership surveys such as the National Readership
Survey (NRS) and Indian Readership survey (IRS) provided syndicated readership
data.

Media research can also focus on demographic details of people reached by each
medium, and also attempt to correlate consumption habits of these groups with their
media preference. Advertising research is used at all stages of advertising, from
conception to release of ads, and thereafter to measure advertising effectiveness
based on various parameters.