Interpretation

interpretation and analysis are closely related. If one or the other is not carried out properly, the success of a study cannot be assured. Consider the cases that follow. In the first, improper interpretation is the problem and, in the second, improper analysis is the problem.

IMPROPER INTERPRETATION

A producer of a branded fast-moving consumer product, which also markets an own-label or private brand version to a large supermarket chain, noted the following sales returns from the supermarket.

The figures show that sales of its own brand have been declining steadily for the past two years while those of the private brand have been steadily increasing. The firm concludes that its own brand sales have been dropping because consumers are switching to the private branded label. The company decided to stop supplying its own product to the supermarket.

In fact, what was happening was that another supplier to the supermarket was making huge gains in terms of market share by running very substantial promotions. The decline in sales of the company's brand was due largely to promotional efforts of the other company. The mistake the company made here was the failure to relate the data it had obtained to other pertinent data - i.e. the activities of its competitor.

Company brand sales

Private brand sales

1995 1st quarter

151,234

74,340

2nd quarter

146,530

81,188

3rd quarter

139,312

83,248

4th quarter

131,931

91,430

1996 1st quarter

125,245

101,121

2nd quarter

119,236

110,234

3rd quarter

111,125

113,122

4th quarter

102,197

122,008

IMPROPER ANALYSIS

A firm is trying to determine which of three advertisements is most likely to increase sales of its product. It tests out the three advertisements by running each at different times in newspapers in different areas.

Advertisement

Total sales associated

with the advertisement

1

39,005 units

2

31,452 units

3

29,438 units

The sales indicated that advertisement 1 was the most successful. The logical result of the research would be to use the advertisement to promote national sales. However, had an analysis of variance been carried out, it would have indicated that the three advertisements did not in fact differ significantly in terms of their impact on sales. Advertisement 1's apparent success was really due to abnormally high demand in area B. Advertisement 1 was not significantly more successful in the other areas.

Advertisment

A

B

C

D

Total

1

7072

16098

8122

7713

39,005

2

7512

7481

7859

8600

31,452

3

7120

7219

9087

6012

29,438

In order to ensure that procedures for analysing the collection of data are given the proper attention, a formal data-analysis plan should be developed in the early stages of the project. Such a plan should identify:

1 major variables to be studied

2 methods used to measure the variables

3 analysis procedures that will be used to give meaning to the collected data.

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