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710-13_regression_analysis

# 710-13_regression_analysis - Qing Liu Assistant Professor...

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Qing Liu Assistant Professor of Marketing 1

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Correlation Analysis S A L E S ADVERTISING  EXPENDITURES Correlation Analysis: A statistical technique used to measure the linear relationship between two or more ratio-scaled variables Y X ( 29 ( 29 ( 29 ( 29 1 2 2 1 1 n i i i n n i i i i X X Y Y r X X Y Y = = = - - = - -
Correlation Analysis Example 3 Correlations 1 -.461** .000 4368 4368 -.461** 1 .000 4368 4368 Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N DiGiorno Sales DiGiorno Price DiGiorno Sales DiGiorno Price Correlation is significant at the 0.01 level (2-tailed). **.

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Regression Analysis S A L E S ADVERTISING Regression Analysis: A statistical technique used to derive an equation that relates a dependent variable to one or more independent variables for the purpose of - Explanation - Prediction Sales = 56+7.4*Advertising
Simple Regression Example Sales = β 0 + β 1 Price Inference about β 0 = intercept and β 1 = slope Hypothesis test Model fit Prediction Scope of the model Frozen Pizza

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Correlation Plot Pearson correlation of Sales  and Price = -0.413 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 350 300 250 200 150 100 50 0 Price Sales
Simple Regression The regression equation is Sales = 176 - 22.3 Price Predictor Coef SE Coef T P Constant 175.76 26.63 6.60 0.000 Price -22.34 4.88 -4.58 0.000 R-Sq = 17.1% R-Sq(adj) = 16.3% Hypothesis Test Coefficient of Determinati on

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Hypothesis Test Focus on the slope H o : There is no relationship between sales and price ( β price =0) H a : There is a relationship between sales and price ( β price 0) What does the p-value tell us?
Prediction How much retail sales could Kraft generate if the price for its 12” frozen pizza was set at \$3.5?

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