A large consumer goods company ran a television advertisement for one of its soa

Question

A large consumer goods company ran a television advertisement for one of its soap products. On the basis of a survey that was conducted, probabilities were assigned to the following events. B-individual purchased the product s-individual recalls seeing the advertisement Bns- individual purchased the product and recalls seeing the advertisemen The probabilities assigned were P(B) = .20, p(S)-.40, and P(B n S) .12. a. If an individual recalls seeing the advertisement, what is the probability that the individual purchased the product? Does seeing the advertisement increase the probability that the individual will purchase the product? Select As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)? Select b. Before the television advertisement was run, what was the estimate company's market share percentage (to the nearest whole number)? Would you expect that continuing the advertisement will increase the company's market share? Select c. The company also tested another advertisement and assigned it values of P(S) .30 and P(B n s)10. What is P(B | S) for this other advertisement (to 3 decimals)? Which advertisement seems to have had the bigger effect on customer purchases? Select

Explanation / Answer

a) P(B|S) = P(B n S)/ P(S) = 0.12/0.40 = 0.30

P(B) = 0.20< P(B|S) =0.30

Yes,the probability that an individual will purchase the product will increase if the individual sees the advertisement first.  

b) 20%

Yes if advertisement increases the chance of purchasing, then continuing the advertisement will increase the companyls market share

c)

P(B|S) = P(B n S) / P(S) = 0.10/0.30 = 0.333

The 2nd advertisement has a larger effect on the customer purchases. 0.33 > 0.30

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