BUS105: In Marketing Strategy, Cannibalization Refers to a Reduction in Sales Volume, Sales Revenue: (Online) Statistics Assignment, SUSS, Singapore

Background

In marketing strategy, cannibalization refers to a reduction in sales volume, sales revenue, or market share of one product as a result of the introduction of a new product by the same producer. While many companies try to avoid cannibalization by their own products, some embrace it through Self-Competition. For example, Apple Computer developed the Macintosh and LISA computers at the same time while Huawei’s Mate Series and P Series smartphones compete in the market. These companies hope that at least one of the products will be successful rather than let others’ products capture the market share.

Location Measurement Services (LMS) Pte Ltd designs and sells radio sensors for transportation companies to install on their vehicles for tracking purposes. LMS has two product teams: Fire and Spark. Both teams have designed and tested their new model of sensors. The data file attached shows the data on Tracking Accuracy (in meters) from randomly selected samples of Fire and Spark Model.

Question 1

• Apply Microsoft Excel to summarise separately the two samples of data. Comment on the differences in the accuracies of the models in terms of the locations and spreads of the data.
• Present the data in an appropriate type of diagram. Comment on the data distributions.
• Interpret the 95% Confidence Intervals (CI) for the accuracies of the Fire and Spark Models. Report any further implications.
• Identify the sample size for Fire Model if the error must be within 0.3 meters from its population mean. Discuss the demands to obtain this increased accuracy.

Note: In the absence of a t value and of a population standard deviation, use the best substitutes for these 2 parameters.

Question 2

Both teams reported their findings to the R&D Director who looked that the data and thought that there is a difference in the accuracies of the two models.

• Develop a five-step hypothesis pooled t-test at 0.10 significant level using a critical value approach by formula to test the Director’s thought. Then employ Microsoft Excel for the p-value approach to verify your results.
• Give the assumptions for the hypothesis test and explain whether these assumptions are valid in the LMS case.
• The LMS Marketing Department wishes to use the Statistics Test to determine the product’s positioning. If you could conduct the Statistics process and analysis again, discuss two changes you would make in order to obtain more meaningful and reliable results.