What fraction of total variation in sales of bright side

Assignment Help Microeconomics

Reference no: EM13389283

The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation:

S = a + bA + cR

where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better.

a. What sign does the marketing director expect a, b, and c to have?

b. Interpret the coefficients a, b, and c.

c. Does Vanguard's advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p-value.

d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a statistically significant way? Explain, using the appropriate p-value.

e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation?

f. What is the expected level of sales each week when Vanguard spends $40,000 per week and the combined advertising expenditures for the three rivals are $100,000 per week?

Reference no: EM13389283

Questions Cloud

In fiscal year 2011 starbucks corporation sbux had revenue : in fiscal year 2011 starbucks corporation sbux had revenue of 11.70 billion gross profit of 6.75 billion and net income

Discuss your selected research design for the project what : primary task response within the discussion board area write 200-300 words that respond to the following questions with

Executors commissions are considered to be costs of : 1. funeral expenses are deductible either on the federal estate tax return or on the decedents last income tax

Explain how manufacturers or service providers and : 1. explain how manufacturers or service providers and consumers benefit from sales promotions.2.explain at least two

What fraction of total variation in sales of bright side : the director of marketing at vanguard corporation believes that sales of the companys bright side laundry detergent s

The research paper should be comprehensive and include : develop a three- to four-page analysis excluding the title and reference pages on the projected return on investment

The purpose of the discussion board is to allow students to : the purpose of the discussion board is to allow students to learn through sharing ideas and experiences as they relate

Snowden and boone 2007 offer a framework for : q1. write 2-3 paragraphs regarding your thoughts on enrons values organizational culture and leadership. q.2 snowden

I each security guard is paid 200 week and cost of stolen : twenty-first century electronics has discovered a theft problem at its warehouse and has decided to hire security

User Account

All Pages