INTRODUCTION

The word statistics is used every day to refer to numerical facts. However, the field or subject
of statistics involves much more than that. Broadly, statistics is the art and science of
collecting, presenting, analyzing and interpreting data. In otherwords, "statistics" refers to a range
of techniques and procedures for analyzing, interpreting, displaying, and making decisions based on data.

Business statistics can be described as the collection, presentation, analysis, and reporting of
numerical findings relevant to a business decision or situation. Because of the diversity of
business, statistics can be applied to many kinds of business settings. In business, the major
reason for collecting, presenting, analyzing, and interpreting data is to give managers and
decision makers a better understanding of the business and economic environment and thus
enable them to make more informed and better decisions.

Importance of Statistics
1. Statistics are often presented in an effort to add credibility to an argument or advice. You can see
this by paying attention to television advertisements. Many of the numbers thrown about in this
way do not represent careful statistical analysis. They can be misleading and push you into
decisions that you might find cause to regret. For these reasons, learning about statistics is a long
step towards taking control of your life.
2. Statistics provides tools that you need in order to react intelligently to information you hear or
read. In this sense, statistics is one of the most important things that you can study.

DESCRIPTIVE AND INFERENTIAL STATISTICS

The applications of statistics can be divided into two broad areas: descriptive statistics and
inferential statistics.

Descriptive statistics

Descriptive statistics are numbers that are used to summarize and describe data. These utilizes
numerical and graphical methods to look for patterns in a data set, to summarize the
information revealed in a data set, and to present the information in a convenient form. In
descriptive statistics, we simply summarize and describe the data we’ve collected.

Most of the statistical information in newspapers, magazines, company reports, and other
publications consists of data that are summarized and presented in a form that is easy for the
reader to understand. Such summaries of data, which may be tabular, graphical, or numerical,
are referred to as descriptive statistics.

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In addition to tabular and graphical displays, numerical descriptive statistics are used to
summarize data. The most common numerical descriptive statistic is the average, or mean.
Descriptive statistics are just descriptive. They do not involve generalizing beyond the data at hand.

Inferential statistics

It is the mathematical procedures whereby we convert information about the sample into intelligent
guesses about the population. These utilizes sample data to make estimates, decisions,
predictions, or other generalizations about a larger set of data. In inferential statistics,
sometimes referred to as inductive statistics, we go beyond mere description of the data and
arrive at inferences regarding the phenomenon or phenomena for which sample data were
obtained.

Many situations require information about a large group of elements (individuals, companies,
voters, households, products, customers, and so on). But, because of time, cost, and other
considerations, data can be collected from only a small portion of the group. The larger group
of elements in a particular study is called the population, and the smaller group is called the
sample. The process of conducting a survey to collect data for the entire population is called
a census. The process of conducting a survey to collect data for a sample is called a sample
survey. As one of its major contributions, statistics uses data from a sample to make estimates
and test hypotheses about the characteristics of a population through a process referred to
as statistical inference.

Key Terms for Inferential Statistics

Population Sometimes referred to as the universe, this is the entire set of people or objects of
interest. Put differently, it is a set of units (usually people, objects, transactions, or events)
that we are interested in studying. For example, populations may include (1) all employed
workers in Nigeria, (2) all registered voters in Kogi State, (3) everyone who has purchased a
Nokia brand of cellular telephone, (4) all the cements produced in 2016 by Dangote in Obajana.

Sample This is a smaller number (a subset) of the people or objects that exist within the larger
population. It is a subset of the units of a population. A sample is said to be representative if
its members tend to have the same characteristics (e.g., voting preference, shopping
behavior, age, income, educational level) as the population from which they were selected.

Parameter This is a numerical characteristic of the population. If we were to take a complete

census of the population, the parameter could actually be measured. Typical parameters
include the population mean, median, proportion, and standard deviation.

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Statistic This is a measured characteristic of the sample. The sample statistic can be a measure
of typicalness or central tendency, such as the mean, median, mode, or proportion, or it may
be a measure of spread or dispersion, such as the range and standard deviation.

DATA
Data are the facts and figures collected, analyzed, and summarized for presentation and
interpretation. There are not very meaningful until they are processed to become information.
Example of data are age, scores in a test, height, share price etc. take a class of 50 students
for instance, you can collect data on their age, weight, height, scores in examinations.

Elements, Variables, and Observations

Elements are the entities on which data are collected. For the example, if the average age of
50 students is 25years, each of the 50 students is an element. With 50 students, the data set
contains 50 elements.

A variable is a characteristic of interest for the elements. Variables are properties or characteristics
of some event, object, or person that can take on different values or amounts (as opposed to constants
such as π that do not vary). The data set in the example includes the following four variables:
 Age of each students
 Weight of each students
 Height of each students
 Examination scores for each student.
Measurements collected on each variable for every element in a study provide the data. The
set of measurements obtained for a particular element is called an observation.

Scales of Measurement
Data collection requires one of the following scales of measurement: nominal, ordinal,
interval, or ratio. The scale of measurement determines the amount of information contained
in the data and indicates the most appropriate data summarization and statistical analyses.
The characteristics that can be combined to classify data into these four scales are; order,
distance, and origin. The followings are the three conditions that can be used to know the
scale of measurements of any data:
 Values of variables in this category can be arranged in either ascending or descending
order.
 Comparisons such as X2 ≤ X1 or X1 ≥ X2, are meaningful.
 The ratio between the two values can be expressed X2/X1; or the distance between the
two can be calculated.

Nominal scale

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When the data for a variable consist of labels or names used to identify an attribute of the
element, the scale of measurement is considered a nominal scale. A nominal data does not
satisfy any of the conditions mentioned above. Example are gender (male or female), state of
origin, marital status (married, unmarried, divorced), skin color, hair color etc. these examples
of data does not satisfy any or all the three conditions mentioned earlier. Thus, their
measurement scales are nominal.

Ordinal scale

The scale of measurement for a variable is called an ordinal scale if the data exhibit the
properties of nominal data and the order or rank of the data is meaningful. An ordinal data can
only satisfy the first condition mentioned above. For example, Diamond Bank Plc. sends
customers a questionnaire designed to obtain data on the quality of its banking services. Each
customer provides service rating of excellent, good, or poor. Because the data obtained are
the labels—excellent, good, or poor—the data have the properties of nominal data. In
addition, the data can be ranked, or ordered, with respect to the service quality. Data
recorded as excellent indicate the best service, followed by good and then poor. Thus, the
scale of measurement is ordinal. This example satisfied only the first condition enumerated
above, thus it is an ordinal scale. Note that the ordinal data can also be recorded using a
numeric code.

Interval scale

The scale of measurement for a variable becomes an interval scale if the data show the
properties of ordinal data and the interval between values is expressed in terms of a fixed unit
of measure. Interval data are always numeric. An interval data can only satisfy the first two
conditions mentioned above. In interval scale, the value zero has meaning (e.g. 00). For
/example; temperature readings for three cities in Nigeria are: Jos – 150, Kaduna – 200, Kano –
300. These temperatures can be ranked or ordered in terms of hotness. In addition,
comparison such as Kano is hotter than Kaduna or the differences between the scores are
meaningful. But, one saying, Jos is twice as cooler as Kano is meaningless. This example satisfy
the first two conditions but not the third one.

Ratio scale

The scale of measurement for a variable is a ratio scale if the data have all the properties of
interval data and the ratio of two values is meaningful. A ratio data satisfy all the conditions
mentioned above. Variables such as distance, salary, examination scores, height, weight, and
time use the ratio scale of measurement. This scale requires that a zero value be included to
indicate that nothing exists for the variable at the zero point. For example; salaries of three

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employees are N50,000; N100,000; and N150,000. The salaries are arranged in ascending
order; N50,000 < N100,000 < N150,000 is meaningful; and if we compare the salary of N50,000
with N150,000 for the third person, it shows that the third person is N150,000/N50,000 = 3
times, or thrice, the salary of the first person. This example satisfied all the three conditions

Qualitative and Quantitative Data

Data can also be classified as either qualitative or quantitative. Qualitative data are those that
cannot be expressed numerically. They include labels or names used to identify an attribute
of each element. Qualitative data use either the nominal or ordinal scale of measurement and
may be nonnumeric or numeric. Examples are gender, marital status, colors etc.

Quantitative data require numeric values that indicate how much or how many. Quantitative
data are obtained using either the interval or ratio scale of measurement. Examples are
temperature, height, weight, distance etc.

A qualitative variable is a variable with qualitative data, and a quantitative variable is a variable
with quantitative data. The statistical analysis appropriate for a particular variable depends
upon whether the variable is qualitative or quantitative. If the variable is qualitative, the
statistical analysis is rather limited. We can summarize qualitative data by counting the
number of observations in each qualitative category or by computing the proportion of the
observations in each qualitative category. However, even when the qualitative data use a
numeric code, arithmetic operations such as addition, subtraction, multiplication, and division
do not provide meaningful results. On the other hand, arithmetic operations often provide
meaningful results for a quantitative variable. For example, for a quantitative variable, the
data may be added and then divided by the number of observations to compute the average
value. This average is usually meaningful and easily interpreted. In general, more alternatives
for statistical analysis are possible when the data are quantitative.

Cross-Sectional and Time Series Data

For purposes of statistical analysis, distinguishing between cross-sectional data and time series
data is important. Cross-sectional data are data collected at the same or approximately the
same point in time. The data of the prices of shares for 50 companies on 6th of June, 2017 are
cross-sectional because they describe the variables for the 50 companies at the same point in
time (6th June, 2017).

Time series data are data collected over several time periods. For example, daily sales of a
supermarket for a year are time series data because it provides the sales for the supermarket
daily for 365 days.

Primary and Secondary Data

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There are basically two types of data: Primary and Secondary data. The primary data are those
which are collected afresh and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical process. This
classification of data is based on when there are collected.

COLLECTION OF DATA

Depending on the study, the marketing researcher would have to decide which type of data
to be collected and accordingly he will have to select one or the other method of data
collection. The methods of collecting primary and secondary data differ since primary data are
to be originally collected, while in case of secondary data the nature of data collection work
is merely that of compilation.

Collection of primary data

Primary data can be collected using observation, experiment, interview, questionnaire,

schedules. Others includes (a) warranty cards; (b) distributor audits; (c) pantry audits; (d)
consumer panels; (e) using mechanical devices; (f) through projective techniques; (g) depth
interviews, and (h) content analysis.

Observation method

Under the observation method, the information is sought by way of investigator’s own direct
observation without asking from the respondent. For instance, in a study relating to consumer
behaviour, the investigator instead of asking the brand of wrist watch used by the
respondent, may himself look at the watch.

The main advantages of this method are:

i. subjective bias is eliminated, if observation is done accurately.

ii. the information obtained under this method relates to what is currently
happening; it is not complicated by either the past behaviour or future intentions
or attitudes.
iii. this method is independent of respondents’ willingness to respond and as such is
relatively less demanding of active cooperation on the part of respondents as
happens to be the case in the interview or the questionnaire method.

This method is particularly suitable in studies which deal with subjects (i.e., respondents) who
are not capable of giving verbal reports of their feelings for one reason or the other.

Observation method has the following limitations.

 it is an expensive method.

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  the information provided by this method is very limited.
 sometimes unforeseen factors may interfere with the observational task.

Observation can be classified as participant and non-participant types of observation in the

context of studies, particularly in business studies and other management and social sciences.
This distinction depends upon the observer’s sharing or not sharing the life of the group he is
observing.

If the observer observes by making himself, more or less, a member of the group he is
observing so that he can experience what the members of the group experience, the
observation is called as the participant observation.

When the observer observes as a detached emissary without any attempt on his part to
experience through participation what others feel, the observation of this type is often
termed as non-participant observation. But, when the observer is observing in such a manner
that his presence may be unknown to the people he is observing, such an observation is
described as disguised observation.

Interview Method

The interview method of collecting data involves presentation of oral-verbal stimuli and reply
in terms of oral-verbal responses. This method can be used through personal interviews and
telephone interviews.

(a) Personal interviews: Personal interview method requires a person known as the
interviewer asking questions generally in a face-to-face contact to the other person or
persons. (At times the interviewee may also ask certain questions and the interviewer
responds to these, but usually the interviewer initiates the interview and collects the
information.) This sort of interview may be in the form of direct personal investigation or
it may be indirect oral investigation.

The main advantages of the interview method are as follows:

1. More information and that too in greater depth can be obtained.

2. Interviewer by his own skill can overcome the resistance, if any, of the
respondents; the interview method can be made to yield an almost perfect sample
of the general population.
3. There is greater flexibility under this method as the opportunity to restructure
questions is always there, specially in case of unstructured interviews.
4. Observation method can as well be applied to recording verbal answers to various
questions.
5. Personal information can as well be obtained easily under this method.

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 6. Samples can be controlled more effectively as there arises no difficulty of the
missing returns; non-response generally remains very low.
7. The interviewer can usually control which person(s) will answer the questions. This
is not possible in mailed questionnaire approach. If so desired, group discussions
may also be held.
8. The interviewer may catch the informant off-guard and thus may secure the most
spontaneous reactions than would be the case if mailed questionnaire is used.
9. The language of the interview can be adopted to the ability or educational level of
the person interviewed and as such misinterpretations concerning questions can
be avoided.
10. The interviewer can collect supplementary information about the respondent’s
personal characteristics and environment which is often of great value in
interpreting results.

The disadvantages of personal interviews are

1. It is a very expensive method, specially when large and widely spread geographical
sample is taken.
2. There remains the possibility of the bias of interviewer as well as that of the
respondent; there also remains the headache of supervision and control of
interviewers.
3. Certain types of respondents such as important officials or executives or people in
high income groups may not be easily approachable under this method and to that
extent the data may prove inadequate.
4. This method is relatively more-time-consuming, specially when the sample is large
and recalls upon the respondents are necessary.
5. The presence of the interviewer on the spot may over-stimulate the respondent,
sometimes even to the extent that he may give imaginary information just to make
the interview interesting.
6. Under the interview method the organisation required for selecting, training and
supervising the field-staff is more complex with formidable problems.
7. Interviewing at times may also introduce systematic errors.
8. Effective interview presupposes proper rapport with respondents that would
facilitate free and frank responses. This is often a very difficult requirement.

(b) Telephone interviews: This method of collecting information consists in contacting

respondents on telephone itself. It is not a very widely used method, but plays important
part in industrial surveys, particularly in developed regions.

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The advantages of telephone interview are:

1. It is more flexible in comparison to mailing method.

2. It is faster than other methods i.e., a quick way of obtaining information.
3. It is cheaper than personal interviewing method; here the cost per response is
relatively low.
4. Recall is easy; callbacks are simple and economical.
5. There is a higher rate of response than what we have in mailing method; the
non-response is generally very low.
6. Replies can be recorded without causing embarrassment to respondents.
7. Interviewer can explain requirements more easily.
8. At times, access can be gained to respondents who otherwise cannot be
contacted for one reason or the other.
9. No field staff is required.
10. Representative and wider distribution of sample is possible.

The disadvantages of telephone interview are:

1. Little time is given to respondents for considered answers; interview period is

not likely to exceed five minutes in most cases.
2. Surveys are restricted to respondents who have telephone facilities.
3. Extensive geographical coverage may get restricted by cost considerations.
4. It is not suitable for intensive surveys where comprehensive answers are
required to various questions.
5. Possibility of the bias of the interviewer is relatively more.
6. Questions have to be short and to the point; probes are difficult to handle.

Questionnaire

A questionnaire consists of a number of questions printed or typed in a definite order on a

form or set of forms. The questionnaire is given directly or mailed to respondents who are
expected to read and understand the questions and write down the reply in the space meant
for the purpose in the questionnaire itself. The respondents have to answer the questions on
their own. This method of collecting data by mailing the questionnaires to respondents is
most extensively employed in various economic and business surveys.

The advantages are:

1. There is low cost even when the universe is large and is widely spread geographically.
2. It is free from the bias of the interviewer; answers are in respondents’ own words.
3. Respondents have adequate time to give well thought out answers.
4. Respondents, who are not easily approachable, can also be reached conveniently.

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 5. Large samples can be made use of and thus the results can be made more dependable
and reliable.

The main disadvantages are:

1. Low rate of return of the duly filled in questionnaires; bias due to no-response is often
indeterminate.
2. It can be used only when respondents are educated and cooperating.
3. The control over questionnaire may be lost once it is sent.
4. There is inbuilt inflexibility because of the difficulty of amending the approach once
questionnaires have been despatched.
5. There is also the possibility of ambiguous replies or omission of replies altogether to
certain questions; interpretation of omissions is difficult.
6. It is difficult to know whether willing respondents are truly representative.
7. It is likely to be the slowest of all.

Before using this method, it is always advisable to conduct ‘pilot study’ (Pilot Survey) for
testing the questionnaires. In a big enquiry the significance of pilot survey is felt very much.
Pilot survey is infact the replica and rehearsal of the main survey. Such a survey, being
conducted by experts, brings to the light the weaknesses (if any) of the questionnaires and
also of the survey techniques. From the experience gained in this way, improvement can be
effected.

Through Schedules

This method of data collection is very much like the collection of data through questionnaire,
with little difference which lies in the fact that schedules (proforma containing a set of
questions) are being filled in by the enumerators who are specially appointed for the purpose.
These enumerators along with schedules, go to respondents, put to them the questions from
the proforma in the order the questions are listed and record the replies in the space meant
for the same in the proforma. In certain situations, schedules may be handed over to
respondents and enumerators may help them in recording their answers to various questions
in the said schedules. Enumerators explain the aims and objects of the investigation and also
remove the difficulties which any respondent may feel in understanding the implications of a
particular question or the definition or concept of difficult terms.

Other methods of collecting data

1) Warranty cards: Warranty cards are usually postal sized cards which are used by dealers
of consumer durables to collect information regarding their products. The information
sought is printed in the form of questions on the ‘warranty cards’ which is placed inside

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 the package along with the product with a request to the consumer to fill in the card and
post it back to the dealer.
2) Distributor or store audits: Distributor or store audits are performed by distributors as
well as manufactures through their salesmen at regular intervals. Distributors get the
retail stores audited through salesmen and use such information to estimate market size,
market share, seasonal purchasing pattern and so on. The data are obtained in such
audits not by questioning but by observation. For instance, in case of a grocery store
audit, a sample of stores is visited periodically and data are recorded on inventories on
hand either by observation or copying from store records.
3) Pantry audits: Pantry audit technique is used to estimate consumption of the basket of
goods at the consumer level. In this type of audit, the investigator collects an inventory
of types, quantities and prices of commodities consumed. Thus in pantry audit data are
recorded from the examination of consumer’s pantry. The usual objective in a pantry
audit is to find out what types of consumers buy certain products and certain brands, the
assumption being that the contents of the pantry accurately portray consumer’s
preferences. Quite often, pantry audits are supplemented by direct questioning relating
to reasons and circumstances under which particular products were purchased in an
attempt to relate these factors to purchasing habits.
4) Consumer panels: An extension of the pantry audit approach on a regular basis is known
as ‘consumer panel’, where a set of consumers are arranged to come to an understanding
to maintain detailed daily records of their consumption and the same is made available to
investigator on demands. In other words, a consumer panel is essentially a sample of
consumers who are interviewed repeatedly over a period of time.
5) Use of mechanical devices: The use of mechanical devices has been widely made to
collect information by way of indirect means. Eye camera, Pupilometric camera,
Psychogalvanometer, Motion picture camera and Audiometer are the principal devices
so far developed and commonly used by modern big business houses, mostly in the
developed world for the purpose of collecting the required information.
6) Projective techniques: Projective techniques (or what are sometimes called as indirect
interviewing techniques) for the collection of data have been developed by psychologists
to use projections of respondents for inferring about underlying motives, urges, or
intentions which are such that the respondent either resists to reveal them or is unable
to figure out himself. In projective techniques the respondent in supplying information
tends unconsciously to project his own attitudes or feelings on the subject under study.
Projective techniques play an important role in motivational researches or in attitude
surveys.
7) Depth interviews: Depth interviews are those interviews that are designed to discover
underlying motives and desires and are often used in motivational research. Such

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 interviews are held to explore needs, desires and feelings of respondents. In other words,
they aim to elicit unconscious as also other types of material relating especially to
personality dynamics and motivations. As such, depth interviews require great skill on the
part of the interviewer and at the same time involve considerable time. Unless the
researcher has specialised training, depth interviewing should not be attempted.
8) Content-analysis: Content-analysis consists of analysing the contents of documentary
materials such as books, magazines, newspapers and the contents of all other verbal
materials which can be either spoken or printed. The analysis of content is a central
activity whenever one is concerned with the study of the nature of the verbal materials.
A review of research in any area, for instance, involves the analysis of the contents of
research articles that have been published.

Collection of Secondary Data

Secondary data means data that are already available i.e., they refer to the data which have
already been collected and analysed by someone else. When the researcher utilises secondary
data, then he has to look into various sources from where he can obtain them. In this case he
is certainly not confronted with the problems that are usually associated with the collection
of original data. Secondary data may either be published data or unpublished data. Usually
published data are available in:

(a) various publications of the central, state are local governments;

(b) various publications of foreign governments or of international bodies and their
subsidiary organisations;
(c) technical and trade journals;
(d) books, magazines and newspapers;
(e) reports and publications of various associations connected with business and industry,
banks, stock exchanges, etc.;
(f) reports prepared by research scholars, universities, economists, etc. in different fields;
and
(g) public records and statistics, historical documents, and other sources of published
information.

The sources of unpublished data are many; they may be found in diaries, letters, unpublished
biographies and autobiographies and also may be available with scholars and research
workers, trade associations, labour bureaus and other public/private individuals and
organisations.

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