The marketing manager of a well -known automobile engine additive suspects that

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 want to know what is the control group, test group, independent and dependent variable

Explanation / Answer

Control group can be a set of retail stores with no in-store display. They will act as the limiting function in the experiment.

Test group will be a set of retail stores with the in-store display. They will be the facilitators of the experiment.

The sample set of both the control and test group must be the same. This will facilitate the comparison of both the groups.

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

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.

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