CASE on a FMCG Firm

Mr. Kaushik joined a FMCG company in Apr 2013. Kaushik reports to Ms. Kiran.
At the end of October 2013, the senior management team of that firm gets the information from the
regional heads that on average sales have gone up by 6% in Eastern and Southern regions whereas North
and West regions have shown a flat sales growth of 2% in the second quarter (July-Sep13), though the
team has not seen the actual sales figures or any such analysis. The numbers suggest that it is not different
from the trend observed in past two quarters, provided, of course, these numbers are proved to be correct.
In fact, one of the regional heads quoted that the variation in the sales growth over the past few months in
all four regions is 0.02%. The management knows that this growth is not driven by the marketing and
advertising expenses as it is almost equally assigned to each region. They think improvement in sales
growth in East and South may be driven by the change in employee composition. There has been some
new recruitment with the background of MBA in marketing in these two regions in the past one year. In
fact, the perception is that 50-60% of the employees have MBA background.
Mr. Baruah is a member of the senior management team. Ms. Kiran reports to Mr. Baruah. Mr. Baruah
has asked Ms. Kiran to analyze historical sales data and to find the likelihood of gap or the probability of
error between the perceptions of the senior management team and the actual data. The analysis and the
presentation have to be prepared in just 4 days.

Mr. Kaushik is pulled up in that project. The first review of the project is expected from Kaushik in one
day. His leader has advised to work with 2 and half years (Apr14-Sep16) of sales data (approx) for four
regions of India (North, East, South and West).

Kaushik knows the data source but he also knows that collecting 2 and half years of data would take more
than half a day. Also, sales data are not available for each region separately. There exists a variable
Region_Code which takes the character values N, E, S W. He will have to extract the employee
background information for each region too. Employee variable also takes character values MBA,
MA, ENG etc. He needs to also check if the date variable appropriately works or not.
So, he wonders how he should proceed to extract the data and analyze the results without missing the
deadline.

The questions may not exactly matchbut directionally the answers below should help you to get the
answers of the Assignment Case.
Please answer the following questions?
State clearly the project objectives for Kaushik.
Obtaining average sales growth rate for each region
Also, get the percentage of the employee having MBA or non-MBA background
Do a reality check!! Alternatively, find the difference between the numbers quoted by senior
management team and the numbers obtained from the sample and its probability based on the
extracted data.

What are the variables Mr. Kaushik should extract? Mention some common checks Kaushik must do
before extracting the variables.

Sales, Region code, Date and Employee Background

The format of each variable. Missing observations!! Records in the variables make sense or not!!

Explain the steps Kaushik should follow to collect information.

Kaushik can extract 2 and half years of information but in parallel, he should also submit a code
which would extract information of just 2 quarters containing the variables sales, employee
background and region codes. This will give quarter-wise comparison.
Or , for each quarter, do a simple random sampling.
Selection of two quarters at a stretch is not a random sampling.
Map the region_code with sales and employee background for each region.
He has to adopt a stratified sampling technique. Segment 2 quarters of data into four regions. And
then either use the entire sample or do a simple random sampling.

Once Kaushik has the required information, what population parameters or sample statistics should he
obtain which can answer some parts of project objectives?
Sample mean or average sales growth
Sample proportion. Or Percentage of people having MBA.

Ms. Kiran thinks that Central Limit Theorem is a theory, not a reality. In that situation, mention some
common checks Kaushik should do before he can use the population parameters or sample statistics to
find the accuracy of what management thinks.
For population parameters he should check if the distribution is normal for mean and proportions.
Also, for sampling distribution if it is normal, for sample mean and sample proportion.
Suppose Kaushik obtains 3% average sales growth for the second quarter of 2014 for 100 observations
and the percentage of employee having MBA background is 30% in East and South region. What is the
chance that Kaushiks estimates lie within +/-5% of managements perception in both cases? Identify the
limitations, if any, in Kaushiks analysis in relation to the objectives defined in question a)
Find P(0.057 <= x <= 0.063)
Find P(0.57<=P(est)<=0.63)
Gaps :
o MBA in marketing could not be obtained.
o Due to tight timeline sample might deviate significantly from
the true picture.

Population Mean 0.06

Population STDEV 0.0002
Population Proportion 0.6
Population STDEV 0.05

Sample Mean Case Sample Mean 0.03 0.003 0.057 0.063

Find Sample Proportion 0.3 0.03 0.57 0.63
P(0.057<=Sample Mean <=0.063)
Sample Proportion Case
Find
P(0.57<=Sample Proportion<=0.63)