14.63 Promotions and the expected price of a product.
If a supermarket product is frequently offered at a reduced price, do customers expect the price of the product to be lower in the future? This question was examined by researchers in a study conducted on students enrolled in an introductory management course at a large midwestern university. For 10 weeks, 160 subjects read weekly ads for the same product. Students were randomly assigned to read one, three, five, or seven ads featuring price promotions during the 10-week period. They were then asked to estimate what the product’s price would be the following week.16 Table 14.1 gives the data.
ppromo
755
14.63
(a) All four Normal quantile plots show roughly Normal distributions with only minor departures from Normality.
(b)
Price | |||
---|---|---|---|
Level of Promotions | Mean | Std Dev | |
1 | 40 | 4.2240 | 0.2734 |
3 | 40 | 4.0628 | 0.1742 |
5 | 40 | 3.7590 | 0.2526 |
7 | 40 | 3.5488 | 0.2750 |
(c) Yes, the largest is less than twice the smallest ; . (d) : not all of the are equal, . There are significant price estimate differences among the four groups, which read different numbers of promotions.