Analysis for Consumer Insight

AMB 305

Quantitative Analysis & Research Brief

Fabian Valado
n9875026

1/06/2018

Word count: 1631

Table of contents:

1.0 Research purpose

2.0 Data Analysis
2.1 Descriptive of the sample
2.2 Analysis of individuals pirating – T- Test / ANOVA
2.3 Correlation of intent to pirate
2.4 Bivariate regression analysis
2.5 Multiple regression analysis
3.0 Critical marketing insights
4.0 References
1.0 Research Purpose

Piracy has been an illegal solution to acquiring free digital products such as music, tv shows
& movies which has become a social norm within today’s market. Piracy has become such a
powerful factor within the industry due to the high perceived benefit and low perceived risk
that a mass of consumers use this service to gain the digital good for free. (Cheuk. 2012). It’s
essential to understand the factors behind the consumers thought process to be understand
the intent to pirate.

The research questions proposed are:

1. Who is most likely to pirate digital goods?
2. What factors are most at play in the thought process or characteristics when a
consumer intents to pirate?

2.0 Data Analysis

Before the analysis it is important to run a factor analysis on the categories for correlations
and significant data is present to create accurate analytical results.
The figure bellows shows the KMO and Bartlett’s test, with each category passing this test
due to the significance level and sampling adequacy.

Construct Sampling Sig.

Adequacy
Risk Aversion (RA) 0.719 0.001
Past Piracy (PP) 0.715 0.001
Past Consciousness (PC) 0.692 0.001
Impulsiveness (IMP) 0.687 0.001
Price Unfairness (PU) 0.779 0.001
Intent to Pirate (OMPI) 0.790 0.001

The next two tests anti-image was performed and all categories have passed. With all scores
passing or very close to the 0.7 mark.

2.1 Descriptive of the sample.

The data contained a total of 885 samples, with 91% being Australian and 9% being non-
Australian. To provide a cleaner sample set, the analysis will focus on only Australian
samples which reduces the sample size to 809. This includes 430 being male and 379 being
female. Of that 48.7% of the sample are aged between 18 to 30, 21.4% are aged between 31
to 50 and 29.9% are aged 51 and over. With that 35.4% are single and 64.6% are in a
relationship. The samples were questioned among 6 main constructs to determine their
opinions on piracy.
1. Online Music piracy intention
2. Past piracy Behaviour
3. Risk Aversion
4. Price Consciousness
5. Perceived unfairness
6. Impulsiveness

2.2 Analysis of individuals pirating – T- Test / Anova

The first part of this analysis is to determine which gender/age group has the highest
intention to pirate. First performing an independent samples t-test on significance between
male and female for future intention of pirating. Results shown that there is no statistical
difference if a man or woman would pirate, t=-1.391, P<0.305. Females would have a mean
of 4.37 towards an intention to pirate with a std. deviation of 1.44, whilst men would be
0.07 points lower making their descriptive extremely like females. Showing no statistical
difference if it’s more likely for a male or female to pirate.

The ages were separated into three generations between 18 -30, 31 to 50 & 51+ to have a
greater insight into each cohort. Running a one-way ANOVA across the generations and
intent to pirate, we compare each generations intent to pirate among each other. The
original ANOVA showed a statistical difference among the generations with a p<0.001,
f=80.90. Using a post hoc tests with a Bonferroni correction it was shown that; both the age
group 31 to 50 & 51+ had a similar result within each with a mean difference of 0.149 and a
p<0.469 showing no statistical difference among the age groups. Though compared to 18 –
30 their P<0.001 showed a significant statistical difference. The tests concluded that 18 to
30 year old age group with a mean of 4.89 and a std deviation of 1.297 had the highest
intent to pirate compared to the older age groups.

Performing a descriptive test on each age group using the focal construct categories of risk
aversion, price consciousness and impulsiveness. This is to determine what factors stand out
that make 18-30 year old age group more prone to pirate. Results show that risk aversion
has a mean of 4.23 which is lower then of the 30 to 50 and 51+ age group whilst also
impulsiveness scores at 4.02 which is highest for the 18-30 group. It can be theorised that
both the lower risk aversion and higher impulsiveness play important factor in why the 18 to
30 year old age group has a higher intent to pirate in the near future then of any other age
group. Since these factors differ so much from the two other age groups.
 Mean
Risk Aversion 18 - 30 4.23
31 - 50 4.82
51+ 4.96
Price Consciousness 18 - 30 4.94
31 - 50 4.82
51+ 4.86
Impulsiveness 18 - 30 4.02
31 - 50 3.57
51+ 3.38
Figure 2 – Descriptive mean of the individual characteristics constructs compared to each
age group

2.3 Correlation of Intent to pirate

A correlation analysis was performed to understand how risk aversion, price unfairness and
price consciousness correlated with intent to pirate. Results shows a significant relation
between OMPI (Intent to pirate) with PU (Price unfairness) r=0.440 & p=0.01 a positive
relationship. Whilst intent to pirate correlating with RA (Risk aversion) shows a significant
negative relationship of r=-.439 & p-0.01. The positive correlation with price unfairness
shows having a negative reaction to the current pricing scheme on these digital products
gives the consumer a higher chance with future intent to pirate.

Whilst risk aversion with a negative correlation shows that the risks included can counter
act and sway the consumer from the intent to pirate. A non-significant factor of PC (Price
consciousness) with a r=0.54 & p=0.111 correlating with OMPI fails to show any statistical
difference towards the intent to pirate. Regardless of how price conscious the consumer is,
it is not an important factor that play when they want to pirate a digital good.

PU PC OMPI RA
OMPI 0.440 0.54 1 -0.439
Significance 0.001 0.111 0.001

Figure 3 – Correlation matrix with the dependant of intent to pirate (OMPI)

2.4 Bivariate regression analysis

To further consider the previous correlations a bivariate regression was performed for both
IV risk aversion and IV price unfairness to form a model for DV intent to pirate. The first
regression was performed for IV price unfairness to DV Intent to pirate with an adjusted R
square = .193 indicating that 19.3% of variation for intent to pirate is explained by this
model. The standardised coefficient was shown to be moderately significant with a score of
0.440. With every point towards an intent to pirate the model predicts that they will have a
0.586 positive point towards finding pricing of digital good unfair.

The same bivariate regression can be used against IV risk aversion to DV Intent to pirate.
With an adjusted R square =0.192 showing for 19.2% of the variation. With a negative
standardized coefficient of -0.439. This construct is shown be a significant predictor due to
co efficient size and the p=0.01 meaning a statistical difference. The model predicts that the
consumer is aware with the higher intent to pirate they understand the risks and even vote
they tend to avoid unethical behaviour.

2.5 Multiple Regression Analysis

The final part of this analysis we analysed the significance of impulsiveness, risk aversion,
price unfairness and past piracy against future intent of piracy. This was done with a
multiple regression. The analysis was done against the two age groups within the cohorts of
a younger and older audience to thoroughly compare between the two generations and find
differences.

The first regression of the younger demographic came with an adjusted R square = .352
showing for 35.2% of the variation within the intent to pirate of the DV. The only non-
significant value shows to be impulsiveness with a p value of 0.051 representing that a
characteristics impulsiveness has no effect on the intent to pirate. Whilst two positive
statistical Significance factors are past piracy habits and price unfairness towards a product.

The second regression of the older demographic came with an adjusted R square= 0.241
representing 24.1% in variation towards the DV. These findings show a negative statistical
impact of impulsiveness and risk aversion, with positive impacts of price unfairness and past
piracy behaviour.

Comparing both the younger and older demographics multiple regressions shows that a
higher impulsive behaviour among the older generation show to have negative impact
towards piracy. The older generation is also more concerned with the risk of piracy
representing a figure of -0.607 compared to the younger ages of -0.341. The next notable
finding is that within the younger demographic having past piracy behaviour leads to a
higher Beta of 0.429 whilst the older demographic has 0.259
These finding suggest that the major difference among younger vs older participants in
pirating that the older generation has less of intent to pirate due to the higher risk aversion
and lower past piracy behaviour. Also, impulsive behaviour is not only statistically important
but plays a negative factor for the intent to pirate compared to the younger generation due
to the negative beta value of -0.138.

Figure 4 –
Regression model younger

Figure 5 – Regression model older.

3.0 Critical Marketing Insights

1. The rise of streaming services

Music piracy is on the decline with downloaded music files over file sharing services are
down 26 percent. This can be due to services such as Spotify, iTunes and Pandora with
digital sales at $16.5 billion. (Hayley, 2013) The service of streaming outweighs the
service of piracy, compared to our analysis this can be directly linked to the risk aversion
between streaming and piracy. The growth of these new services outweighs the benefits
of piracy and with such a low cost can be seen as fair pricing which entices today’s
consumers.

2. Perceived risk

Risk plays an important factor within pirating, some consider it a social norm with a low
perceived risk and high benefit. Though these “attitudes to risk will usually be determined by
culture, economic well-being and the geographic.” (Irena, Monika, Elfriede 2015) These
factors plays an important factor in what a consumer perceives to be the real risk. Even
though marketing campaigns have been implemented to circumvent pirating, the only real
solution was to provide a higher benefit solution such as streaming and take risk out of the
picture.

3. Digital supply chain

With the new emergence of distribution and supply chain of digital goods, the younger
generations are adapting to new technologies and reduce pirating due to greater ease of
access. (Jeong, 2010) Though through the analysis the younger generations have a higher
intent to pirate, it has been circumvented with new supply chain models that allow for a
service greater then pirating.
4.0 References

B.K. Jeong, 2010. DIGITAL PIRACY: AN ASSESSMENT OF CONSUMER PIRACY RISK AND
OPTIMAL SUPPLY CHAIN COORDINATION STRATEGIES. The university of North Carolina
retrieved from https://search-proquest-
com.ezp01.library.qut.edu.au/docview/757914576/fulltextPDF/E834DF7FD8214C12PQ/13?
accountid=13380

Cheuk.L, (2009) economics of intellectual property. University of Minnesota retrieved from

https://search-proquest-
com.ezp01.library.qut.edu.au/docview/304954087/fulltextPDF/6274201E44214D60PQ/1?ac
countid=13380

Hayley.T. (2013) Music piracy on the decline as digital music sales grow. The Washington
post retrieved from https://search-proquest-
com.ezp01.library.qut.edu.au/docview/1312510660/6274201E44214D60PQ/3?accountid=1
3380

Irena.K, Monika.K, Elfriede.P, 2012. Predicting consumer digital piracy behavior The role of
rationalization and perceived consequences. Retrieved from https://search-proquest-
com.ezp01.library.qut.edu.au/docview/1113530635/fulltextPDF/E834DF7FD8214C12PQ/3?
accountid=13380