Question

Assume you are studying the cause/effect impact of several factors on the outcomes of a marketing campaign. How can multiple regression analysis help identify the impact of a set of such factors?

Answer 1

A multiple regression analysis helps up understand the impact of different variable upon the outcome of the marketing campaign. Here, the independent variables are the variables that make impact upon the dependent variable.

A multiple regression analysis, tells the impact of change in one variable upon the outcome, while other variables are considered constant. By this way, it can be assessed the positive and or negative impact as well as the strengths of the impact of these variables upon the final outcome such as sales revenue. It can be understood by the following example of multiple regression analysis.

Sales revenue = a + B1*education + B2*family size + B3*price of the substitute + B4*income

As per the above multiple regression equation,

with 1 unit increase in income, sales revenue increases by B4 units and vice versa. Similarly, with 1 unit increase in the price of substitute products, the sales revenue increases by B3 units and vice versa. On the basis of this analysis, the outcome of the marketing campaign is designed and evaluated.