Posted: September 13th, 2017

BUSINESS Decision making

Background

Frostbury is a supermarket in a small conurbation in the north of England. It caters for a population of
around 3000 households. Although its main business is food, it has extended to other items such as clothes
and white/electrical/electronic goods. The management of Frostbury, anxious of the drop in retail takings,
wanted to understand the behavioural pattern of all its shopping population in order to respond correctly
to their need. It has introduced its own loyalty card and local people can apply for it using an application
form made available at the supermarket. Those shoppers opting for this card will earn loyalty points that
can be claimed via air miles and against future spending.

The application form for the loyalty card has a small questionnaire where customers can give their opinion
about five key motivations for their choice of Frostbury to do their shopping, namely, the location of the
supermarket, the presence of the car park, the opening hours, the till service and helpfulness of staff. The
questions are stated as follows:

Rate on a scale 1 to 7 (1 = Not at all important and 7 = Very important)
the following five motivations for shopping at Frotsbury.

As well as asking people for their personal details such as the gender of the applicant, their age, marital
status and the number of children still living with them, the applicants were also asked to give an estimate
of the time it takes them to get to the supermarket.

The supermarket management are interested in the following three key research questions and possible
extensions to them:

1. The demographic profile of applicants
2. Their motivation for choosing to shop at Frostbury
3. Their respective monthly spending
4. The prediction of future spending
The demographic data of applicants and their motivations for shopping with Frostbury are obtained from
the application forms whereas the data on spending was obtained from the loyalty card database. A sample
of 163 customers has elected to apply for the loyalty card. The whole information is made available on an
SPSS file named “LCholders.sav”. Some responses are missing and are represented by codes such as “99”
and “999”, therefore before you undertake any analysis, you should re-label the responses properly and
identify the missing data.

This is an individual coursework. This coursework contributes 30% of the module overall mark. The deadline for this coursework is Friday of week 13. The coursework is in two parts, Part one and

Part two: Background Frostbury is a supermarket in a small conurbation in the north of England. It caters for a population of around 3000 households. Although its main business is food, it has

extended to other items such as clothes and white/electrical/electronic goods. The management of Frostbury, anxious of the drop in retail takings, wanted to understand the behavioural

pattern of all its shopping population in order to respond correctly to their need. It has introduced its own loyalty card and local people can apply for it using an application form made

available at the supermarket. Those shoppers opting for this card will earn loyalty points that can be claimed via air miles and against future spending. The application form for the loyalty card

has a small questionnaire where customers can give their opinion about five key motivations for their choice of Frostbury to do their shopping, namely, the location of the supermarket, the

presence of the car park, the opening hours, the till service and helpfulness of staff. The questions are stated as follows: Rate on a scale 1 to 7 (1 = Not at all important and 7 = Very important)

the following five motivations for shopping at Frotsbury. As well as asking people for their personal details such as the gender of the applicant, their age, marital status and the number of

children still living with them, the applicants were also asked to give an estimate of the time it takes them to get to the supermarket. The supermarket management are interested in the

following three key research questions and possible extensions to them: 1. The demographic profile of applicants 2. Their motivation for choosing to shop at Frostbury 3. Their respective

monthly spending 4. The prediction of future spending The demographic data of applicants and their motivations for shopping with Frostbury are obtained from the application forms whereas

the data on spending was obtained from the loyalty card database. A sample of 163 customers has elected to apply for the loyalty card. The whole information is made available on an SPSS file

named “LCholders.sav”. Some responses are missing and are represented by codes such as “99” and “999”, therefore before you undertake any analysis, you should re-label the responses

properly and identify the missing data.
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Part one: Analysis of data
You work for a market research agency and the management of Frostbury have approach your agency for analysis of their data. They presented you with the data file and their research

objectives as stated in their research questions. For this part, they are interested in the first three research questions. Since your CV stated that you have experience in working with SPSS

software and a decent enough education on statistical methods, your line manager has chosen you for this project. Research question 1: The demographic profile of applicants Required: ? Using

SPSS, produce appropriate frequency tables of the demographic profile of shoppers who applied for Frostbury loyalty card. The profile will have to include their gender, marital status, and the

mode of transport they use to get to the supermarket. ? ? Using SPSS, produce three appropriate charts to describe the age, the number of children still living with the family and the type of

accommodation they live in. Comment on your SPSS output.

Note: For this section, you need to report on what the frequency tables and charts tell you. The report should be no more than 400 words in total and should include your output placed

appropriately within your report. Research question 2: Motivation for choosing to shop at Frostbury Required: ? Using SPSS, calculate the minimum, the maximum, the median, the lower quartile

and the upper quartile for the ratings of the shoppers’ motivations for choosing to shop with Frostbury. All five motivational items should be considered. ? Comment on the single most

important motivation. Also comment on the single most consistent motivation among this sample of shoppers.

Note: Again for this section, you need to produce a small report of no more than 100 words and include the SPSS output. The SPSS output, which is a single table, should be inserted with your

report. Research question 3: Monthly spending Required: ? Using SPSS, draw a histogram and calculate the descriptive statistics for the January spending among this sample of shoppers.

Comment on the shape of the spending distribution as well as its average and spread. ? Calculate the descriptive statistics of the January spending split by: o Gender o Accommodation o

Transport used o Number of children living the house You should include the sample size, the mean, median, skewness and standard deviation. Comment briefly on the results. Note: Again for this

section, you need to produce a report of no more than 300 words (excluding the SPSS output). The different parts of the SPSS output need to be inserted within your report to enable the reader

to check your results. In particular, you need to comment on the distribution of spending across the whole sample and then comment on which profile is high spender and/or low spender.

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Part two: Hypothesis testing and linear regression
Extension to research questions: Hypothesis testing Industry standards report that at least 40% of shoppers should be able to walk to their supermarket without needing public or private

transport of some sort. Equally, the same standards indicate that the location of supermarkets is such that the average travelling time is about 12 minutes. Another report, published by a

consumer research agency, suggested, among other things, that the availability of parking at supermarkets is a significant incentive among shoppers, particularly among those using their own

private transport. The same report stated that male and female shoppers see the supermarket’s opening hours as highly important, though they rate them differently. It was also stipulated in

the same report that average monthly spending per household at supermarkets depends on whether you live in a flat or a house. Required: Using information from this sample of loyalty card

applicants and an SPSS hypothesis testing facility to, ? ? ? Test one: Test if industry standards apply in relation to the proportion of all shoppers to Frotsbury able to walk to the supermarket.

Test two: Test if industry standards apply to travelling time of all Frostbury shoppers. Test three: Test the ratings of motivations for shopping at Frostbury against each of gender, marital

status, type of accommodation, number of children and mode of transport used, and identify the significant associations only. Test four: Test if the January average spending of all shoppers is

significantly different between those who live in a flat and those who live in a house. Comment on each of the four hypothesis tests above in relation to the information obtained from the two

reports stated in the preamble above.

? ?

Note: For this section, you need to produce a statistical reporting of your results in no more than 200 words. Report on each test separately. For each test, you need to state clearly the

hypotheses (Null and alternative), indicate the level of significance you have chosen and then make a decision based on your test result. You must only use SPSS to conduct your statistical test.

Each “useful” SPSS output should be placed within the report. No statements are acceptable unless they are followed by appropriate statistical evidence taken from your SPSS output.

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Modeling future spending – Simple linear regression analysis The spending by the loyalty card holders was also given for the month of February. We want to investigate whether the amounts

spent by cardholders in February can be explained by the amounts spent in January. Required: ? ? ? Use SPSS to draw a scatter diagram of spending in February against spending in January. Use

SPSS to find a linear equation between the two monthly spending amounts. Comment on your results and what they mean in this context. Your comments should include aspects of the scatter

diagram, the coefficient of determination, the significance of the model as a whole and whether gradient coefficient is statistically significant.

Note: As evidence, your output should include tables of the Model summary, Anova and coefficients. Comment on your simple linear model. Modeling future spending – Multiple linear regression

analysis The intention here is to build a linear regression model for the February spending using the following four variables: ? The spending by loyalty card holders in January (the previous

month) ? The age of applicants ? The number of children still living with the parents ? The time taken to get to the supermarket In essence, your dependent (or outcome) variable is the February

spending and your independent (or explanatory) variables are the four stated above (in bullet points). Required: ? ? Use SPSS to produce the best multiple linear model for predicting the

February spending. Comment on your multiple linear model. Your comments should include the variables included/excluded by the model, aspects of the variation of the February spending

amounts that are accounted for by the model, the significance of the model (and its gradient variables) and the outliers to this model.

Note: Your output should include tables of the model summary, Anova, Coefficients and the Casewise diagnostics (outside 3 standard deviations). Also, your comments should be written as if

they are addressed to your manager at the market research agency. Your manager is familiar with the statistical terminology so you can use technical language in this report. However, you will

also need to explain the implications of your findings in more general, formal English. General expectations: ? ? ? ? ? ? You are expected to write in a formal academic English style when

producing your report and you should not include the data set. Your comments should be written in a report form with separate paragraphs, titles and sub-titles (if needed). In the comments,

you can refer to certain parts of your SPSS output to help the readers (Markers in this case) check the evidence of your findings. Your SPSS output can be either screen-shot (or copied and

pasted) on a word processor together with your report so the reader can see your comments and check your results at the same time. The reports you are including in this coursework are

purely evidence based and should not contain any “theory” notes taken from books or the internet. Include a bibliography of any sources you have used/read to complete the coursework. Note

that comments such as “there are more males than females” or “the most important motivation is the opening hours” are not acceptable unless they are followed by appropriate statistical

evidence such as “Males represent 30% of the total” for example.

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