Statistics for Decision-making: Analysis of Luxury Car Brands

This report analyzes the marketing strategies and customer preferences of luxury car brands BMW, Lexus, and Mercedes. The report includes data analysis and descriptive statistics on the age, income, and education of buyers. The marketing strategy of the brands is discussed, along with implications for policy-making and competition in the market.

STATISTICS FOR DECISION-MAKING
Statistics for Decision-making
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Executive Summary:
The car brands such as BMW, Lexus and Mercedes campaign the custom agency of the brand. The marketing campaign is proved to
be the product of both the new global agency model of the market and refocused brand communicating strategies. The marketing mix
indicates a fantastic company. The recognized company is the top-most recognized automobiles brands. The implemented automobile
company established the fiercely competitive automobile industry. The age, annual income and education of the car buyers are the
investigating facts about preferences of cars. The marketing strategy is dependent upon the performances of the cars available in the
market. The target market gets increased by proper communication, marketing strategy and accessibility. The major thing that the cars
managed to construct a reputation of quality and exclusively in all its products. With the help of proper policy making, the brands
would be more recognizable in the market. The influencing factors are the determinants for strategy making of the managements.
These companies understand that consumers would be more approachable due to well applied policies. The car brands deal with a
niche segment where the customer is more concerned with the values they are receiving in the companies. The activities, planning,
processes, delivery and exchange of the car brands completely satisfy the profitability of customer requirements created to fulfil the
customer needs. ‘Mercedes’ is found to be more powerful competitor of the other two car companies that are ‘BMW’ and ‘Lexus’. To
keep competition in market and survive in other situations too, the low performing countries are needed to cope up the measurable
policies.

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Table of Contents
1. Introduction:............................................................................................................................................................................................2
2. Marketing Strategy:.................................................................................................................................................................................2
3. Data Analysis:..........................................................................................................................................................................................3
3.1. Data description:...............................................................................................................................................................................3
3.2. Answers:............................................................................................................................................................................................3
Answer 1...............................................................................................................................................................................................0
Answer 2...............................................................................................................................................................................................1
Answer 3...............................................................................................................................................................................................0
Answer 4...............................................................................................................................................................................................2
Answer 5...............................................................................................................................................................................................3
Answer 6...............................................................................................................................................................................................5
Answer 7...............................................................................................................................................................................................7
4. Conclusion:..............................................................................................................................................................................................0
5. Implications:............................................................................................................................................................................................1
References:..................................................................................................................................................................................................2

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1. Introduction:
The report was based on the case study of the buyers of 2012. To find the buying of various types of luxury cars, automobile
association carried out a survey of luxury car buyers. The three types of luxury cars that are BMW, Lexus and Mercedes are collected
during this analysis. The ages of the buyers, household incomes (in dollars) and years of education are investigated as the effective
factors.
The luxury car manufactures divide its offerings based on ‘demographics’, ‘behavioral factors’ and ‘psychographics’. ‘BMW’
cars deliver a huge amount of successful growth as a result of its robust strategy as resolute approach in the implementation and
absolute commitment to all customers and their requirements (Peter, Olson and Grunert 1999). ‘Mercedes’ cars create challenges and
changes a healthy growth. ‘Lexus’ is a subsidiary division of its parent company Toyota that manufactures a huge number of cars
worldwide. It is associated with automotive industry and trades in producing and marketing of premium vehicles. The statistics of
surveyed data of purchase of three types of cars are visualized and analyzed in this research method.
The advantages that are required by the people are ‘superiority’, ‘performance’, ‘quality’ and ‘reliability’. The brands of cars
target ‘upper social group’ customers as they are the people for whom these cars would be affordable and moreover appreciated. The
brands of cars and global frontrunners have positioned itself as a symbol of ‘technological advancement’, ‘quality’ and ‘high
performance’. The following case study is going to highlight the combination of customer preferences and sales.
2. Marketing Strategy:
In the context of market value, these three brands “BMW”, “Lexus” and “Mercedes” are positioned in the top ten largest global
brands. These brands have gained world-wide recognition and are being marketed in Europe, Latin America and South-East Asia.
These brands generally aim the “Elite class” as potential market. These brands of cars look for perfection, comfort and ultimate luxury
for their potential consumers. The brands face inter-market and intra-market competition in global scenario. These brands were
interested in forming the covert project by their founder to manufacture the best luxury vehicle.

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The marketing strategy includes reformation in “Regional distributors”, “Dealership network” and “Exhibition canters”. The
key success of the marketing strategy and policies of the brands on a great extent are projected on the basis of customer market. The
advertisements and commercials highlight the distinctive features such as ‘relentless’, ‘perfection’, ‘precision’, ‘smoothness’ and
‘balance’ (Atwal and Williams 2009). The brands especially ‘BMW’ and ‘Lexus’ should take help of social, electronic and print
media to advertise with the help of television, newspapers, magazines and online platforms. The brand awareness of the three brands
is very much necessary with regard to this (Kapferer and Bastien 2012). The international brands coordinate its global pricing policy
with competitive pricing policy that generates a distinctive competitive advantage results in larger sales volume and better profits. The
marketing strategy must be based on the analyses of surveyed data of the car brands and companies. The companies cover up the
aspects of ‘Product’, ‘Price’, ‘Place’ and ‘Promotion’ elaborating the sales and performance (Dickson and Ginter 1987).
3. Data Analysis:
The analysis is quantitative in nature. MS-Excel 2016 is utilized for data analysis. Descriptive statistics, One-way ANOVA and
binary logistic regression are executed in the data analysis. Descriptive statistics discusses about average, median, standard deviation,
kurtosis, skewness, maximum, minimum and range of the numerical variables. One-way ANOVA tests find the equality of averages of
the variables. The binary logistic regression finds the association between dependent variable and independent variables.
3.1. Data description:
In this case study, the data is surveyed and collected for three types of luxury cars that are BMW, Lexus and Mercedes. The
age of the buyers, household incomes of the buyers and years of education of each types of luxury cars were gathered in this survey.
The quantitative variables are age of the customers, household income of the buyers in dollars and years of education of the car
buyers. The nominal variable is the types of car. The nominal variable is numerated by three levels. The data analysis is majorly
quantitative. This exploratory data analysis is utilized to find the hidden association between dependent variable and independent
variables of the data set.

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3.2. Answers:
Answer 1.
The average age of the buyers in terms of years are BMW cars (45.22), Lexus cars (50.46) and Mercedes (51.99). The age of
the buyers of BMW ranges from 36 to 57 years, the age of the buyers of Lexus ranges from 36 to 68 years and the age distribution of
the buyers of Mercedes ranges from 35 to 70 years. The distribution of age of buyers of Lexus is highly peaked and the distribution of
age of buyers of Mercedes is least peaked (Bartz 1988). The distribution of age of buyers of Mercedes is mostly scattered followed by
Lexus in terms of standard deviation and range. However, the distribution of age of buyers of BMW is least scattered. The
distributions of ages of buyers of BMW is positively skewed followed by the positively skewed distribution of ages of buyers of
Lexus. The distribution of ages of buyers of Mercedes is negatively skewed and almost normal.

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The distribution of ages of various buyers of cars is symmetric for BMW cars and an outlier is observed in the distribution of
ages of different buyers of Lexus cars. The median of the distribution of ages of Mercedes cars is highest and median of the
distribution of ages of BMW cars is lowest.
30 35 40 45 50 55 60 65 70 More
0
10
20
30
40
50
60
Histogram of Age of buyers of BMW
Bin Range
Frequency
Most of the buyers of BMW cars have age around 45 years.
30 35 40 45 50 55 60 65 70 More
0
10
20
30
40
50
Histogram of Age of buyers of Lexus
Bin Range
Frequency
Most of the buyers of Lexus cars have age around 55 years. The distribution is almost normally distributed.

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30 35 40 45 50 55 60 65 70 More
0
10
20
30
40
50
Histogram of Age of buyers of Mercedes
Bin Range
Frequency
Most of the buyers of Mercedes cars have age around 55 years.
Answer 2.

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The average annual income of the buyers are BMW cars ($139271.34), Lexus cars ($154186.857) and Mercedes
($184423.947) (Hafner 1998). The average annual income of the buyers of BMW ranges from $46068 to $216720, the average annual
income of the buyers of Lexus ranges from $96069 to $248134 and the average annual income of the buyers of Mercedes ranges from
$49941 to $334823. The median of the average income is highest for the buyers of Mercedes cars followed by the buyers of Lexus
cars. The median of the average income is least for the buyers for BMW cars. The distribution of annual income of buyers of
Mercedes is highly peaked and the distribution of annual income of buyers of BMW is least peaked (Bluman 2009). The distribution
of annual income of the buyers of Mercedes is mostly scattered followed by BMW in terms of standard deviation and range (Kvanli,
Pavur and Guynes 2000). However, the distribution of annual income of buyers of Lexus is least scattered. The distributions of annual
income of buyers of Lexus is highly positively skewed followed by the positively skewed distribution of annual income of buyers of
Mercedes. The distribution of annual income of buyers of BMW is slightly negatively skewed and almost normal.

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Although the distribution of annual income ($) of users of BMW cars do not have significant outliers, the distributions of
annual incomes ($) of users of Lexus and Mercedes cars have outliers. More or less, the distributions of annual incomes ($) of users of
Mercedes and Lexus cars are symmetric to each other. The median annual income ($) of the users of Mercedes cars is highest and the
median annual income ($) of the users of BMW cars is the lowest.

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50000 100000 150000 200000 250000 300000 350000 More
0
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60
70
Histogram of annual income of buyers of BMW
Bin Range
Frequency
The histogram of annual income of buyers of BMW cars depicts that most of the buyers earn around $150000 annually.
50000 100000 150000 200000 250000 300000 350000 More
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70
80
Histogram of annual income of buyers of Lexus
Bin Range
Frequency

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The histogram of annual income of buyers of Lexus cars depicts that most of the buyers earn around $200000 annually.
50000 100000 150000 200000 250000 300000 350000 More
0
10
20
30
40
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60
70
Histogram of annual income of buyers of Mercedez
Bin Range
Frequency
The histogram of annual income of buyers of Mercedes cars depicts that most of the buyers earn around $200000 annually.
Answer 3.

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The average education level of users of Lexus is least (15.8 years) followed by average education level of users of BMW
(15.83 years). The average education level of users of Mercedes is highest (17.29 years). The median of education of the users is
maximum for “Mercedes” cars (17) followed by the users of “BMW” and “Lexus” cars (16). The scatter-ness of educational years of
Lexus is maximum in terms of range and standard deviation followed by BMW. The educational years of Mercedes is least scattered
(SD = 1.739963) (McCluskey and Lalkhen 2007). The median and mode of the average educational level in terms of years are 16
years for the buyer of BMW and Lexus cars. The median and mode of the average educational level in terms of years is 17 years for
the buyers of Mercedes cars. The range of the education of years of buyers are almost equal for all the three types of cars (Weiss and
Hassett 1999). The educational years of Lexus is BMW cars is negatively skewed (Doane and Seward 2005). The distribution of
education of buyers of Lexus and Mercedes is positively skewed. The distribution of education years of Mercedes cars is least peaked
and near to normality.

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No outlier is observed in the distributions of education years of buyers of different cars. The median of the distributions of
educational years of buyers of BMW and Lexus cars are equal to each other. The median of the distribution of education years of
buyers of Mercedes cars is maximum.
10 12 14 16 18 20 22 More
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Histogram of educational years of users of BMW
Bin Range
Frequency

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Most of the buyers of BMW cars have educational experience around 17 years to 19 years.
10 12 14 16 18 20 22 More
0
5
10
15
20
25
30
35
40
Histogram of educational years of users of Lexus
Bin Range
Frequency
Most of the buyers of Lexus cars have educational experience from 13 years to 17 years.
10 12 14 16 18 20 22 More
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30
40
50
60
70
80
Histogram of educational years of users of Mercedes
Bin Range
Frequency
Most of the buyers of Mercedes cars have educational experience from 17 years to 19 years.

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Answer 4.
Some car dealers believe that the types of luxury car the people purchase do not rely on their ages. Therefore, to establish the
assumption of insignificant difference of the average ages of the buyers of the three various luxury cars, the ANOVA test (test of
equality of means) are applied in this analysis.
Hypotheses:
Null hypothesis (H0): The averages of ages of buyers of three types of cars are equal to each other (Heiberger and Neuwirth 2009).
Alternative hypothesis (HA): There exists at least one inequality in the averages of ages of buyers of three types of cars.
Test applied: One-way ANOVA test.
Level of significance: 5%.

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Test statistics: F (2, 417, 0.05) = 49.80171.
Calculated p-value: 0.0.
Decision-making: As calculated p-value < critical value, therefore, the null hypothesis is rejected with 5% level of significance.
Interpretation: It could be easily interpreted that the averages of the ages of the buyers of three types of cars are unequal to each other.
Conclusion: The age is one of the significant factors that bring deviation in the choices for three different types of cars (Ross and
Willson 2017). Hence, the proposition and assumptions of some dealers was absolutely wrong. The below bar chart also provides its
evidences.
Age (Years) of buyers for BMW Age (Years) of buyers for Lexus Age (Years) of buyers for Mercedes
40
42
44
46
48
50
52
54
Distribution of average age
Answer 5.

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Some car dealers believe that the types of luxury car the people purchase do not rely on their annual income ($). Therefore, to
establish the assumption of insignificant difference of the average annual incomes of the buyers of the three various luxury cars, the
ANOVA test (test of equality of means) are applied in this analysis.
Hypotheses:
Null hypothesis (H0): The averages of annual incomes of buyers of three types of cars are equal to each other.
Alternative hypothesis (HA): There exists at least one inequality in the averages of annual incomes of buyers of three types of cars.
Test applied: One-way ANOVA test.
Level of significance: 5%.
Test statistics: F (2, 417, 0.05) = 52.1761.

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Calculated p-value: 0.0.
Decision-making: As calculated p-value < critical value, therefore, the null hypothesis is rejected with 5% level of significance
(Christensen 2002).
Interpretation: It could be easily interpreted that the averages of the annual incomes of the buyers of three types of cars are unequal to
each other.
Conclusion: The annual income ($) is one of the significant factors that bring deviation in the choices for three different types of cars.
Hence, the proposition and assumptions of some dealers was absolutely wrong. The below bar chart also provides its evidences.
Annual Income ($) of users of BMW Annual Income ($)of users of Lexus Annual Income ($)of users of Mercedes
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
Average annual income ($)
Answer 6.

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Some car dealers believe that the types of luxury car the people purchase do not rely on their education in years. Therefore, to
establish the assumption of insignificant difference of the average education in years of the buyers of the three various luxury cars, the
ANOVA test (test of equality of means) are applied in this analysis.
Hypotheses:
Null hypothesis (H0): The averages of educational years of buyers of three types of cars are equal to each other.
Alternative hypothesis (HA): There exists at least one inequality in the averages of educational years of buyers of three types of cars.
Test applied: One-way ANOVA test.
Level of significance: 5%.
Test statistics: F (2, 417, 0.05) = 25.92566.

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p-value: 0.0.
Decision-making: As calculated p-value < critical value, therefore, the null hypothesis is rejected with 5% level of significance.
Interpretation: It could be easily interpreted that the averages of the educational years of the buyers of three types of cars are unequal
to each other (Tamhane 1977).
Conclusion: The education (years) is one of the significant factors that bring deviation in the choices for three different types of cars.
Hence, the proposition and assumptions of some dealers was absolutely wrong. The below bar chart also provides its evidences.
Education (Years) of users of BMW Education (Years)of users of Lexus Education (Years)of users of Mercedes
15
15.5
16
16.5
17
17.5
Average Education (years)
Answer 7.
Some car dealers claimed that the older people with higher household income and more years of education are fond of
Mercedes cars rather than BMW or Lexus. To verify the claim, the significant relationships are established here. The logistic

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regression model assuming types of cars as dependent variable and other variables such as “Age (Years)”, “Annual Income ($)” and
“Education (Years)” as independent variables are executed in this analysis. In this case, the car type ‘1’ and ‘2’ are transformed in ‘0’
(failure in case of having Mercedes cars) and ‘3’ is transformed in ‘1’ (success in case of having Mercedes cars).
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
ROC Curve
False Positive Rate
True Positive Rate
Model:
The logistic model could be written as-

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Log-odds of having Mercedes car = -14.8573 + 0.09784* ‘Age (Years)’ + 2.42e-5* ‘Annual Income’ + 0.326147* ‘Education’.
Hence, the probability of having Mercedes cars =
1
1+ exp (− (−14.8573+0.09784∗Age+2.42∗exp ( −5 )∗Annual Income+0.326147∗Education ) ) (Menard 2000).
Interpretation:
All the p-values of the predictors are less than 5%. Therefore, all the three independent variables (“Age (years)”, “Annual
Income ($)” and “Education (Years)”) have positive significant association with “Types of car”. Hence, for the increment of age,
annual income and education years, the probability of “Types of car” also increases (Peng, Lee and Ingersoll 2002). For the greater
values of the independent factors, the probability of the value of the dependent factor also tends to be higher (Neter et al. 1996). Level
“3” of types of cars denote “Mercedes”.
Conclusion:
Hence, it could be easily said that the buyers of Mercedes cars are older in age, earn high annual income and higher education.
4. Conclusion:
In this analyzed report, age of the buyers, household income of the buyers and years of education of buyers are visually
represented and discussed. The distribution of ages of shows that the buyers of Mercedes cars are elder and the buyers of BMW cars
are comparatively younger. The distribution of household income depicts that the buyers of Mercedes cars are higher and the buyers
of BMW cars are lesser. The distribution of years of education shows that the buyers of Mercedes cars are much educated and the
buyers of BMW cars are less educated. Further, there exists inequalities for all the independent variables due to the three types of cars
that are BMW, Lexus and Mercedes. The regression model defines a positive association between all the three independent variables
that are age of the buyers, household income and years of education with the dependent variable “Types of car”. Therefore, it is
overall established that for various types of cars, the variation arises in the ages, household income and years of education of the
buyers.

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All the three companies should have adopted policy of customer service as the underlying principle to enhance its market.
Policy makers’ assumptions are found to be false regarding the issues. Therefore, they should make the correct decisions for good
policy making and business expansion.
5. Implications:
Different types of cars are available in the market. The preference of the buyers is also not always same. Many a factor could
be the probable reason of it. The car companies manufacture the different models of the cars as per demand and selling opportunities.
Mercedes has established a ‘Firm foothold’ in the premium segment for upmarket customers (Omar 1998). These brands offer high-
end products at affordable rates as it has undertaken a ‘Mid-premium’ policy. As per analysis, ‘BMW’ faces severe competition in the
consumer market. The cars face severe competition in the consumer market to deal successfully with its competitors compared to
product prices of competitive brands (Ihlen 2002). The ‘BMW’ and ‘Lexus’ should adopt a competitive pricing policy and the brands
have provided it with a distinctive ‘competitive advantage’. It would result a larger sale in terms of volume and better profits. It would
make the brands as the world’s leading provider of premium products and premium services for individual mobility. Policy makers
must consider the greater values of independent variables for better implications of the car brands. For greater businesses, these car
companies may also look for merger or acquisition of other brands (Smith 2003).

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