AIRCO is a leading manufacturer of automated test equipment systems for clients in the aviation and oil and gas industry. 

Customers: Boeing, Schlumberger 

Customers relied on semi-automated test systems in 1990's that were prone to costly calibration errors.

AIRCO became a market leader by developing the first fully automated system based on its performance, reliability, and calibration accuracy.

By 2008, AIRCO expanded sales and operations globally, 58 additional centers located in North America and Europe. Products came with 3 year warranty, loaner program, and technical support and best technical support. 

Competition increased, Two types of competitors- low priced mass market players and high price niche-market players (added smart features than AIRCO). 

Challenge: Should it provide more features that are costly for AIRCO to develop, provide more value or lower prices and compete with new entrants.

Market share, Revenue, Profit and Net Income dropped two years in a row for the first time in the company's 20-year history.

Study: Survey of 575 customers about relationship marketing efforts of AIRCO.

Please answer the following questions:

What is the mean level of customer satisfaction with AIRCO's price, product features, ongoing service and support as well as overall customer satisfaction? (25 points)

What is the correlation among customers' satisfaction with AIRCO's price, product features, ongoing service and support, overall customer satisfaction and customer revenue? (25 points)

Perform a regression analysis with customer satisfaction with AIRCO's price, product features, and ongoing service and support as independent variable and overall satisfaction as the dependent variable. What can you inform the sales force based on the regression results? (25 points)

Perform a regression analysis with overall customer satisfaction as the independent variable and revenue as the dependent variable. If customer satisfaction increases by 1 point, how much does revenue increase? (25 points)

 

Table 1: Variable Description

Variable	Description
Overall Satisfaction	Overall satisfaction with AIRCO (1-7, 7 being the highest)
Fair Price	Overall satisfaction with FAIR PRICE (1-7, 7 being the highest)
Service	Overall satisfaction with SERVICE (1-7, 7 being the highest)
Product Features	Overall satisfaction with PRODUCT FEATURES (1-7, 7 being the highest)
Revenue	Revenue generated by CUSTOMER (scaled by an arbitrary number for confidentiality)

 

Table 2:Summary Statistics and Correlations

Variable	Obs	Mean	Std.Dev	Min	Max	1	2	3	4	5
1. Overall Satisfaction	575	3.96	0.86	0.92	5.34	1.00
2. Fair Price	575	5.24	1.29	1	7	0.82	1.00
3. Service	575	5.30	1.34	1	7	0.95	0.64	1.00
4. Product Features	575	4.93	1.39	1	7	0.77	0.60	0.63	1.00
5. Revenue	575	105.18	13.23	60.8	129.1	0.98	0.80	0.92	0.75	1.00

 

Table 3:Regression with Overall Satisfaction as Dependent Variable

	Coeff	Std.Err	t-value	p-value	LCL	UCL	Weights
Constant	0.20	0.02	12.04	0.00	0.16	0.23
Fair Price	0.20	0.00	52.71	0.00	0.19	0.21	0.28
Service	0.41	0.00	109.59	0.00	0.40	0.42	0.57
Product Features	0.11	0.00	31.60	0.00	0.10	0.12	0.15
R-Squared	0.99

 

Table 4:Regression with Revenue as Dependent Variable

	Coeff	Std.Err	t-value	p-value	LCL	UCL	Weights
Constant	45.41	0.56	81.45	0.00	44.32	46.51
Overall Satisfaction	15.10	0.14	109.69	0.00	14.83	15.37
R-Squared	0.955

Answer rating: 100% (QA)

Lets answer each of your questions based on the provided data Question 1 The mean levels of customer satisfaction for the different aspects are as fol... View the full answer