The marketing manager of a well -known automobile engine additive suspects that
ID: 391334 • Letter: T
Question
The marketing manager of a well -known automobile engine additive suspects that the use of an in-store display affects the price elasticity of his product. Specifically, he suspects that the presence of an in-store display increases the products price elasticity relative to no on-store display. To test this hunch, he would like to do a sales experiment with the 654 retail stores that carry this product. Currently the additive is being sold for $7.99 a bottle. Specifify the variable and groups that would describe the experiment that this manager could use to test this huch. Explain your choices.
They did not give choices.
Explanation / Answer
The variable to be observed is the demand and the sales of the additives. The independent variable will be the price of the in-store display. The dependent variable will be the number of orders placed or the demand for the in-store display. This will help in observing the effect of in store display on the price elasticity of the product.
The manager wants to check that what is the effect on the demand of the in-store displays when there is x% rise in the price of such displays.
Control group can be a set of retail stores with no in-store display. They will act as the limiting function in the experiment. They will give an impartial judgment of what happens to the sales of a product when there is no influence of the in-house displays.
Test group will be a set of retail stores with the in-store display. They will be the facilitators of the experiment. They will help in understanding the relationship between the presence of in-store display and the sale and price elasticity of the product.
The sample set of both the control and test group must be the same. This will facilitate the comparison of both the groups.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.