Statistics for Decision Making: Razor Blade Market Analysis Report

This report presents a statistical analysis of the razor blade market, focusing on data analysis to aid new product development and pricing strategies for the Asian market. The analysis utilizes descriptive and inferential statistical techniques, including graphical illustrations, summary statistics, and hypothesis testing. Key findings reveal no significant price difference between male and female products, nor does the number of blade cartridges significantly impact price. Country of origin, particularly France, significantly influences pricing. The report concludes with recommendations for product pricing, emphasizing gender neutrality, minimal cartridge impact, and competitive pricing within the Asian market, while considering a potential premium for country of origin. The analysis includes hypothesis tests using t-tests and ANOVA to evaluate claims regarding gender-based pricing, cartridge blade pricing, and country of origin price differences.

STATISTICS FOR DECISION MAKING
ECON940
[DATE]
STUDENT NAME
STUDENT ID

Executive Summary
The key objective of the analysis is to provide valuable analysis to aid the new product
development and key aspects such as pricing considering the same would be launched in
Asia. The sample data has been analysed using descriptive and inferential statistics technique
based on the underlying requirement. Using descriptive statistics, sample data summary has
been provided with regards to key variables. Using inferential statistics, testing of the various
claims has been performed. It has come to light that average price of razors is not dependent
on the underlying gender being targeted by the product. Additionally, the number of
cartridges provided in the blade also does not bring about any significant difference in the
average price. The country of origin effect has been found to be significant particularly if the
product originates from France. The key takeaways for the company to ensure that the
product is not focused on any particular gender, does not have very high cartridges in blade
and is priced keeping the prices offered by Asian manufactured along with potential premium
for country of origin.
Business Problem
Our company is involved in the manufacturing of sanitary products. It aims to enter the Asian
market and is developing a new product line which is relates to razor blade. In order to
understand the various nuances about this product and related pricing decision, the objective
is to analyse the razor blades variant available in the market. This would enable the company
to understand the ongoing trends and consumer preferences. The given object aims to resolve
the business problem through analysis of sample data available in this regards.
Statistical Problem
The key statistical problem is to carry out an analysis of the sample data using appropriate
statistical techniques. In this regards, descriptive statistics technique such as graphical
illustration and summary statistics have been used to summarise the sample data. However, in
cases where the objective is to test a claim for the razor blade as a product range, then
inferential statistical technique namely hypothesis testing has been deployed. The objective of
data analysis is to represent the key characteristics of razor blade market in quantitative
terms.
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Analysis
The discussion of the findings of statistical analysis has been carried out below.
(1) Requisite graphical illustration along with descriptive summary of gender based prices of
the sample data is presented as follows.
Box & whisker plot
Descriptive statistics
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The sample based descriptive statistics highlight that average price per product used by
female is $6.90 which exceeds the median price of $6.50. The distribution shape with regards
to the prices of female products is asymmetric. This is apparent on the basis of box plot
where the quartile distribution is not even. Also, the descriptive statistics highlight the
presence of positive skew. In relation to dispersion in sample data regarding price of female
products, it is apparent that is quite high. The comparison of the measures of dispersion with
mean indicates the high amount of dispersion in the price of female products.
With regards to prices of male products, the average price is lower than the average for
females at $ 5.60. The median value is greater than the corresponding mean by $ 0.40. The
box plot highlights the asymmetric shape of this variable distribution which is also confirmed
from the non-convergence of mean and median values along with presence of skew. The
dispersion with regards to prices of male products is comparatively lower than female
products as evident from the dispersion measures
(2) Graphical display and descriptive statistics of the prices based on the total number of
cartridge blades is given below.
Column chart
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Descriptive statistics
The descriptive statistics indicate that there is some difference in the average price of blades
with different cartridges. In this regards, common sense would suggest a higher price for a
blade with higher cartridge which is also captured in the sample data. The price distribution
for neither of the three razor types is symmetric as skew is present for all the different
cartridge variants. However, the direction of skew is not the same for the three cartridge
variant for the razors captured in the sample data. Considering the various dispersion
measures for the blade varieties included in the sample, it can be concluded that the extent of
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dispersion is high. However, highest price dispersion is shown for the razor containing two
cartridges while the lowest price related deviation is registered for the razor containing five
cartridges.
(3) Graphical display and descriptive statisticsfor the prices of the product on the basis of
country of origin or product is shown below.
Box & whisker plot
Descriptive statistics
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The comparison of the average prices based on the country of country indicates highest
average prices for French products at $ 13.32. The next in line are US products ($9.09) and
finally other countries ($3.26). There is presence of positive skew for the prices of each of
three country categories which highlight that the shape of price distribution would be
asymmetric. With regards to other countries products, significant outliers are also present
which are presented in the box plot. Besides, the extent of skew is very high for other
countries goods on account of presence of outliers.
With regards to French goods, the extent of dispersion captured by descriptive statistics
measures is quite low. With regards to US goods, the price dispersion remains low to
moderate but is higher than the corresponding levels observed for French products. The other
countries product prices tend to exhibit the highest amount of dispersion as is indicated from
the dispersion measures shown in the descriptive statistics table pasted above.
(4) Hypothesis test would be considered as a suitable inferential statistical method to test the
claim regarding the population that the average price of amale product is greater than the
average price of a female product or not.
Null hypothesis H0 :μMale product =μFemale product (There is no statistically significant difference
present in the mean price of male product and of female product.)
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Alternative hypothesis Ha : μMale product >μFemale product(The mean price of male product is greater
than the mean price of female product.)
Significance level for hypothesis test = 0.05
It is apparent from the information that the population standard deviation is not given and
thus t test would be used. Also, the price of a male product does not depend on the price of a
female product thus, it can be said that the sample variables are independent. The standard
deviation of the variables is not same and thus, the most appropriate hypothesis test would be
two independent sample t test for unequal variance.
t statistic = -1.4899 and p value (right tailed) = 0.0725
It can be conlcuded based on the above that the p value comes out to be 0.0725 which is
more than significance level (0.05).Thus, sufficient evidence is not present to reject the null
hypothsis and to accept the alternative hypothesis. Thereby, the mean price of male product is
not significantly different from the mean price of female product
(5) Hypothesis test to test the claim regarding mean price of number of cartridge blades.
Null hypothesis H0 :μtwinblade=μ3−blade=μ5−blade(The mean price of razors with different
cartridge blades is same)
Alternative hypothesis Ha :Mean price of at least one cartridge blade type is statistically
different from the mean price of other blades.
Significance level = 0.05
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Here, the comparison needs to be done for the averages of the more than two variables and
hence, the t test would not be suitable. Thus, single factor ANOVA would be taken into
consideration. The test statistic would be F stat and the decision regarding the rejection of the
hypotheses would be done based on the p value.
ANOVA Test
F statistic =0.5989 and p value= 0.5516
It can be conlcuded based on the above that the p value comes out to be 0.5516 which is
more than significance level (0.05).Thus, sufficient evidence is not present to reject the null
hypothsis and to accept the alternative hypothesis. Thereby, the mean price of cartridge
blades twin, 3- blade and 5 blade cartridges are not different from each other.
(6) Hypothesis testing needs to be performed to test the claim that average price of product
made in France is lower than the product made in USA.
Null hypothesis H0 :μProduct France ≥ μProduct USA
Alternative hypothesis Ha : μProduct France < μProduct USA
Significance level = 0.05
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t statistic = 8.2089 and t critical one tail (left tailed) = -1.6939
On the basis of the above values, it is apparent that computed t statistic is greater than the left
tailed t value which is the negative of the right tailed t value represented in the excel output.
As a result, the null hypothesis cannot be rejected. Thereby, average price of product made in
France is either equal to or greater than the product made in USA.
(7)Hypothesis testing to check the claim of difference being present in the average price of
the product of made from different countries is shown below
Null hypothesis H0 :μProduct FRANCE=μProduct USA=μProduct Other countries
Alternative hypothesis Ha : At least average priceof product made in one country is different
from others
Significancce level = 5%
Here, the comparison needs to be done for the averages of the more than two variables and
hence, the t test would not be suitable. Thus, single factor ANOVA would be taken into
consideration. The test statistic would be F stat and the decision regarding the rejection of the
hypotheses would be done based on the p value.
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F statistic = 197.95 and p value = 0.00
It can be conlcuded based on the above that the p value comes out to be 0.00 which is lower
than significance level (0.05). Thus, sufficient evidence is present to reject the null hypothsis
and to accept the alternative hypothesis. Thereby, at least of th eaverage price of product
made in different countries is not the same.
Conclusion/Recommendations
The discussion above indicates that average price for products meant for male and female
usage do not show any significant different. Also, the average price of the razor blade does
not seem to be driven by the number of cartridges provided by the manufacturer. This is quite
surprising considering that a higher average price would be expected when greater number of
cartridges is provided. The country of origin however is a significant factor for the product
pricing considering that other countries products besides US and France are quite cheaper. A
country of origin premium does seem to exist in the market which is more prevalent for
France than any other country. Further, it seems that the products available in the Asian
market which are domestically produced are quite cheap.
The above observations have significant implications for the product pricing of the new
product. Firstly, it would not be directly at any particular gender and would aim to have
variants for both genders considering their specific needs. Additionally, there seems to be no
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incentive for the manufacturer to provide more cartridges as the premium in this regards is
negligible. Considering that the new product is for Asian market, hence the price would be
low only although some premium for country of origin effect may not be ruled out.
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