Abstract

The application of statistics had been used for more than 25 years in manufacturing industry, quality management process and other industries. Statistics had been so useful as it can help in achieving and analyzing the objective of decision based on the data that been collected about products and also process. (Saxena, 2011). Several statistic techniques are required to analyze and help in interpreting data obtained. This literature review is meant to explain several statistical techniques that used in market research.

Introduction Statistic application had been used extensively and commonly within organization. In an organizations market research, statistics was used to identify the gap between customers and product and services. Moreover, not only limited to that, statistics extend its usage in many different areas of management in term of analyzing and interpreting data. In business area, what statistics can assist of is, statistics can be used to predict the future value for trading and business, by provide accurate data analyzes and statistical forecasting. Nowadays, as competition was happening in global scale, the understanding of information collected, and effective use for future course of action should be within good grasp for the managers and decisionmaker. Thus good understanding of how to use statistical techniques is essential to be mastered. (Saxena, 2011).

In market research purpose, statistics can be used in two different approaches either qualitative or quantitative. However, regardless of these two different approaches, the most important in market research is how good or well is the data gathered. Thus, the way of how data are obtained is crucial to ensure data gathered can be representing the whole population. To meet this requirement, survey should be conducted based on sufficiency and randomness. (Luk, 1998).

Market research can be assisted by statistic techniques by providing sophisticated quantitative method, which had been developed to measure and analyze consumers satisfaction, perception and preferences. For example, multiple regression analysis is used. Moreover, to explain the conceptual and beneficial dimension underlying measures of product perception and preferences, factor analysis can be used. Cluster analysis at the other hand are useful for deducing homogenous group from the data set or identification of potential market segments as well as competitors. (Luk, 1998).

Literature Review To understand how statistic can assist in market research, firstly we have to understand the basic of what is market research all about. Market research is actually process of collecting information that will give contribution in capturing market share. To collect data in market research, it is achieved by

using designated survey in purpose of assessing consumer performance. Moreover, it is also very general where it is applicable to wide range of

situations, and also it can help decision-makers by providing the information they need in order to find solution for business problems. For examples, how satisfied are customers with your product and service offering? How will customers response to a decision to change a price or product? What is service representative hearing from customers?. (Albaum, 2012).

Basically, there are two channels of how these data can be collected; it may be in primary data and secondary data. Through primary data collection method, collection is conducted via Internet and telephone, focus group discussions, mail responses, or setting up booths in public places, such as shopping malls. While, via secondary data collection method, market

research analyst will devise methods and procedures in order to get the data they required by designing surveys to assess consumer preferences. Information acquired through marketing research also could be used to determine if the companys operation. (Saxena, 2011).

To use statistical technique in collecting data, analyze data and making conclusions, the objective of market research has to be identified first as appropriate statistical technique is depending on what is the market researchs objective. Furthermore, a company could had the opportunities to learn about the past, current and potential customers, include their specific likes and dislikes by having market research conducted. (Saxena, 2011).

Application of statistic used in Market Research Analyzing data is important to process the collected data. There are so many types of statistical techniques that can be used to analyze data. We shall look at few statistical techniques, which are pie charts and hypothesis testing. (Saxena, 2011)

A pie chart is a statistical, chart circular in shape, which divided into sectors, representing proportion. The arc length of each sector is proportional to the quantity it represents. Pie charts is said could be effective way in a way to show information in particular cases when comparing with the whole pie rather than comparing the slices between them. While, for next statistical technique is hypothesis testing. (Saxena, 2011). Hypothesis testing is important tool for statistics. To come out with hypothesis testing, we have to get a theory or a basic for argument, which had not been, prove yet. Hypothesis test is depending on the significance level in the test that being carried out. (Saxena, 2011)

Multiple Regression Analysis Multiple regression analysis is a systematic way for quantifying relationship between the dependent factors and one or more independent factors. This can be explained by taking an example of product, which is sold, to the final customers, Multiple Regression Analysis could be used to forecast retail sales by: (Baets, 1994)

Y= f (X1, X2, X3, X4, X5, ...) Where, Y = market demand for the product X1 = Consumers disposable income X2 = size of population X3 = price of product X4 = price of substitute X5 = price of complementary product

Discriminant Analysis Discriminant analysis (DA) is the component of statistical technique that uses available information on set of variable for classification purpose. There are two method of how to construct discriminant function. (Baets, 1994)

1) Assumption regarding the group distribution 2) The functional form of the discriminant function.

Artificial Neural Networks Distributed information processing systems, which consist of many

computational elements interacting across weighted connection, explained what Artificial Neural network is. Exploited by computer scientist to have vision and speech processing technology, it has the ability to identify patterns in the data that could be utilized in market research. (Baets, 1994)

Discussion Based on literature review read, it can be concluded that statistic is definitely have a lot of techniques which can help in market research. Statistic helps managers or decision maker by providing them with statistical tool such as pie chart. Pie chart is help managers to display their data for easy understanding and analyzing. Moreover, application of statistic extends to hypothesis testing matter. Managers can forecast a theory they have by doing t-test model. In some sense, statistical techniques can be helpful to manager for market research purpose, however, not all statistical techniques can easily satisfied all situations. A research by V. Venogopal and W. Baets in Neural Networks and Statsitical Techniques in Marketing research: A Conceptual Comparison, 1994, state that Multiple regression has been difficult to be used. In their study, Multiple Regression that is also the component in statistical techniques, need priori knowledge of the functional form. This will be difficult for

managers, as they should know the priori the forms of the equation that available information represents. In normal situation, manager will have difficulty to know the priori knowledge of the form of the equation. (Baets, 1994)

Another examples of how statistical technique is not necessarily easy applicable to all situations is by using discriminant analysis. This is because discriminant analysis only optimal to be used in minimizing misclassification if each group follows a multivariate normal distribution and the covariance matrices is same. However, when manager will use this type analysis,

problem and difficulty could arise as in real life situation, the data about the customers characteristics will not follow the normality condition.

Nevertheless, a statistical approach, which is Neural Network Approach, can solve the limitation of Multiple Regression analysis and Discriminant Analysis. Neural Network analysis can overcome Multiple Regression analysis limitation as Neural Network analysis will forecast sales by modeling the relationship between the independent factors and the depend factors in unique way. Moreover, it also using non-parametric method as specified priori is not require for functional form. Moreover, Neural network approach help in discriminant analysis as it make no assumption about statistical distribution in the data, and more general method which do better in classifying task. (Baets, 1994)

Conclusion In conclusion, statistical techniques are broadly used and able to assist managers in doing market research. There are many of statistics techniques that is very useful to be used such as hypothesis testing, t-test, Pie chart, Multiple Regression Analysis, Discriminant Analysis. Each of them is very unique in performing their function to help managers in marketing research. However, there is no absolute technique for each task in doing marketing research. Plus, statistical techniques has their own limitation but could be offset by another evolutionary approach.

References Saxena, P. (2011). Application of Statistical Techniques in Market Research: A sample survey. International Journal Of Applied Engineering Research,

Dindigul , 163-171.

Baets, V. &. (1994). Neural Networks and Statistical Techniques in Marketing Research: A Conceptual Comparison. Marketing Intelligence & Planning , 3038.

Albaum, S. M. (2012). Basic Marketing Research: Volume 1 (Vol. 1). Utah: Qualtric Labs, Inc.

Luk, R. (1998). Application Of Statistics in The Business World. International

Conference Of Teaching Statistics, (pp. 1-10). Hong Kong.