Statistics for Decision Making

Running Head: STATISTICS FOR DECISION MAKING
Statistics for Decision Making
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1STATISTICS FOR DECISION MAKING
Executive Summary
The demand for a commodity depends on various factors. For luxury cars, the demand is
dependent on the taste and preference of the customer, to choose the brand and the model of
the cars they are to buy. The differences in the choices are observed for different brands of
cars when all of them belong to the same price range and possess almost the same
specifications. Thus, it becomes a problem for the sellers at times to find out which model
should be imposed more on which type of buyer. In this report, an analysis of the problem
related to this business to set up a marketing strategy for the luxury cars of different brands
will be presented. The chosen car brands for the analysis are BMW, Mercedes and Lexus.
Other information such as the age, the income and the years of education completed by the
customers are also considered along with the choice of their cars. The survey was conducted
on 420 people in total for the purpose of the analysis. The results obtained from the survey
show that Mercedes is preferred by most people followed by the preference for Lexus and
BMW. Younger people having lower annual income and lesser years of education have been
found to be preferring BMW. On the other hand, older people having much higher annual
income and more years of education have been found to be preferring Mercedes. According
to further analysis, it has been observed that there are significant differences in the average
age, education and annual income of the respondents, who are preferring different types of
luxury car brands.

2STATISTICS FOR DECISION MAKING
Table of Contents
1.0 Introduction..........................................................................................................................3
1.1 Introduction to the Business Problem..............................................................................3
1.2 Introduction to the Statistical Problem.............................................................................3
2.0 Data Analysis.......................................................................................................................3
2.1 Summary of the Age Groups............................................................................................3
2.2 Summary of Annual Income............................................................................................6
2.3 Summary of Years of Education......................................................................................9
2.4 Test for Difference in Ages............................................................................................12
2.5 Test for Difference in Annual Income...........................................................................13
2.6 Test for Difference in Years of Education.....................................................................14
2.7 Logistic Regression........................................................................................................15
3.0 Conclusion and Recommendation......................................................................................16

3STATISTICS FOR DECISION MAKING
1.0 Introduction
1.1 Introduction to the Business Problem
The Automobile association has been facing problems in targeting the population
group to whom which brand of car should be more advertised. The taste and preferences of
the people differ with different age group, income and education. Thus, the company wanted
to analyse the demand for the luxury cars in the households considering the factors such as
age, income and years of education. The main aim of this research will be to identify how
each of the considered attributes such as age, income and education of the buyers of luxury
cars define their preferences towards any particular brands. The customer profile information
will be useful for the association to analyse their demands so that they can come up with
some strategies to sell the cars to the potential buyers and attract new customers as well.
1.2 Introduction to the Statistical Problem
The business problem that has been discussed already needs to be evaluated with the
help of the application of appropriate statistical techniques and interpretation of the results as
well. Measures of shape and location will be used to determine the shape of the distribution
of the profiles of the customers. The Association is also interested to know the differences in
the age, annual income and years of education of the buyers of the different brands of cars.
Appropriate testing strategies will be used in order to test these differences. The preference of
the brands of the luxury cars with respect to the influence of age, education and annual
income of the customers will be evaluated with the help of logistic regression technique.
2.0 Data Analysis
2.1 Summary of the Age Groups