Assignment 5

Problem 1 ( 25 points)

Gees Wiz, a company involved in marketing PC software and computer games, is considering marketing its latest game by direct mail. The company has acquired a mailing list of 80,000 households (HHDs) who owns a PC. To test customer's response, Gees Wiz has conducted a test mailing to 2,000 HHDs. These 2,000 HHDs were chosen at random from the main file. Half of the test sample received a brochure (describing the latest games) with a free gift offer (worth $9), for each game that a customer buys from the brochure. The other half of the test mailing received the brochure without the free gift offer. Assume that the cost of brochure is $4 per piece (including printing, mailing etc.). Assume that the variable cost of the game is $60 per piece. Assume that the selling price of the game is $90 per piece.

The number of games ordered by a customer is a variable (i.e., customers may have ordered none, one, or more than one game from the brochure) in this data set. The data for this problem is contained in the accompanying file named, assignment5.1.sav. The variables are ID (customer ID), Order (coded as 1 = placed at least one order, 0 = no order), Group (1= with gift offer, 2= without gift offer), Quantity (the exact number of games ordered by a customer).

1. Test the hypothesis (at both 5% and 10% level of significance) that the free gift offer has no effect on response rate (i.e., the % of HHDs placing at least one order is the same between the two test sample groups – with or without the free gift ).
2. Test the hypothesis that the gift offer does not change the average number of games ordered by a customer (Note: you need to use only those members who placed at least one order - think why? Therefore, for this question, , please filter out all the customers who didn’t place any order)
3. What would you recommend to the company and why? (to discard the mail campaign altogether, to do mail campaign with the gift, or to do mail campaign without the gift). (Hint: You must consider all the costs and revenues! and project your numbers on the balance 78,000 HHDs - you need to think hard about this one!).

Problem 2 ( 25 points)

Suppose an ad agency of a company has prepared three 15-seconds TV ads for introducing a new product. The first ad uses a humor appeal (H), the second uses an emotional appeal (E), and the third uses a comparative(C) approach by comparing the new product of the client company with an existing brand of competitors. An experiment was conducted with 36 subjects (18 males and 18 females) who were randomly divided into three groups of 12 subjects each. Each group was exposed to one ad and subjects in each group were asked to evaluate the ad with respect to how believable the ad was on an 11-point scale with higher numbers indicating more believable.

The data from the ad study is in the file Assignment5.2.sav. The variables in the data set should be self-explanatory.

Assume that you have been hired by the company to analyze and interpret the data and write a report explaining what you found in the data and what should the company do in light of your findings.

Price: $18.86

Solution: The downloadable solution consists of 10 pages, 886 words and 3 charts.
Deliverable: Word Document