Chapter 13

Question 1

What is market segmentation?

Answer 1

It is based on differences between groups of consumers.

One commonly used basis for market segmentation is the discovery of differences that are the following:
– Statistically significant
– Meaningful
– Stable
– Actionable differences

Question 2

What are the different types of segmentation?

Answer 2

1. Demographic
2. Geographic
3. Behavioural
4. Psychographic

Question 3

What are four necessary qualities of differences in market segmentation?

Answer 3

1. Differences must be statistically significant
2. Differences must be meaningful
3. Differences should be stable
4. Differences must be actionable

Question 4

What do statistical tests compare in 2 groups?

Answer 4

Statistical tests are used when researcher wants to
compare the means or percentages of two different
groups or samples

Question 5

What are the 2 types of statistical tests?

Answer 5

t Test: statistical inference test to be used with small
sample sizes (n < 30)
z Test: statistical inference test to be used when the
sample size is 30 or greater

Question 6

What is the null hypothesis?

Answer 6

Null hypothesis: the hypothesis that the difference in the population parameters is equal to zero

With a differences test, the null hypothesis states that
there is no difference between the percentages (or means) being compared

Question 7

How do you know when test results are significant?

Answer 7

If the null hypothesis is true, we would expect no differences between the two percentages

If the z value is greater than +1.96 or −1.96, its not likely the null hypothesis of no difference is true. Rather, there is a real statistical difference between the two percentages.

➔ but we do not know for certain because there could be differences due to sampling error, or sample size error

Question 8

What is ANOVA (analysis of variance)?

Answer 8

Analysis of variance (ANOVA): used when comparing the means of three or more groups

• ANOVA is the differences between the group means to ascertain whether sampling errors or true population differences explain their failure to be equal

Question 9

What are the three methods of testing the difference between means?

Answer 9

1. Differences between 2 means from independent samples
2. Differences between 3 or more means from independent samples
3. Differences between paired means

Question 10

What are the advantages of ANOVA?

Answer 10

ANOVA has two distinct advantages over performing multiple t tests of the significance of the difference between means.

1. Immediately notifies researcher if there is any significant difference
2. Arranges the means so the significant differences can be located and interpreted easily

Question 11

What are Post Hoc tests?

Answer 11

Post hoc tests: options that are available to determine
where the pair(s) of statistically significant differences between the means exist(s)

Duncan’s multiple range test: provides output that is
mostly a “picture” of what means are significantly
different

Question 12

What are paired sample tests?

Answer 12

Paired samples test for the differences between two
means: a test to determine if two means of two different questions using the same scale format and answered by the same respondents in the sample are significantly different