Question: ( a ) test for difference in means between test vs controls for both products ( watch the # of stores ) , ( b

(a) test for difference in means between test vs controls for both products (watch the # of stores),(b) provide a unit sales forecast with and without ads (use the "sales potential" information and the "represented X% of sales" information),(c) estimate profits with and without ads for Arizona and California (assume they are running the same ad that was used in the experiment, ie treat the development of the ads as a sunk cost, and the 3M ad budget in this roll-out is the national total, i.e. you need to adjust it for Arizona and California combined based on population (tracks with the retailer's national sales percentages))
In other words, you only do AZ and CA; you need to think of them as one joint market; the 3M national ad budget needs to be prorated for AZCA based on population (the 12 and 2 figure can be used for this purpose (actual numbers are 12.18 and 2.12)
Arizona for four weeks from June 17,2007, to July 14,2007. The company purchased 600 gross
rating points (GRPs) for the television advertisements for a total cost of $31,500. The ads were
aimed at girls between the ages of 2 and 11 and were aired on local cable channels, such as
Nickelodeon and the Cartoon Network. Management also purchased 64 GRPs for radio
commercials for a total cost of $8,022. The radio commercials were aired during morning and
evening commutes. Each of the television and radio programs selected for the commercials
reached about 1.8% of the population in Phoenix. The cost of developing the commercial
through an outside agency was $150,000.
Management estimated that an equivalent ad budget for eight to ten weeks of preholiday
advertising, factoring in certain economies as well as the higher seasonal cost of media, would be
approximately $3 million. The average retail selling price of Betty Spaghetty during the test was
about $15.00. Retailer and Ohio Art margins were about the same as for EAS, 36% and 58%,
respectively. Given that some time would be required to read the test, obtain shelf space, and
ship product to stores, management estimated that the four-week test market sales period
represented about 10% of the total remaining sales potential for the year.
Table 4 reports weekly sales in 23 Arizona stores (test) and in 24 stores of the same mass
merchant in California (control) for two versions of Betty Spaghetty. The stores represented 50%
of the retailer's Arizona sales and 10% of California sales, respectively. Arizona and California
represented 2% and 12%, respectively, of the retailer's national sales, and that same retailer was
expected to account for 25% of total Betty Spaghetty sales. Management intended to use the test
to help estimate Betty Spaghetty sales with and without advertising.
Table 4. Weekly unit sales of Betty Spaghetty in test and control cities.
Data source: Ohio Art. Used with permission. Please show step by step setup in Excel for questions a, b, and c above.
( a ) test for difference in means between test

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!