BM2507/2515 – MARKETING ANALYTICS

Sample questions – Quiz 1

1. Linear regression model is typically used as a:

(a) Diagnostic analytic tool
(b) Descriptive analytic tool
(c) Predictive analytic tool
(d) Prescriptive analytic tool
(e) Both (a) and (c)
(f) Both (b) and (d)
(g) None of the above

2. In a linear regression model Y =α 0 + α 1 X 1 +α 2 X 2 +ϵ , the error term ϵ captures the effect

of:
(a) All variables that we do not observe and do not affect Y
(b) Combined effects of X 1 and X 2
(c) Interaction effect between X 1 and X 2
(d) None of the above

3. If we want to examine the effect Back-to-school promotion (using a binary variable

indicating whether there was a Back-to-school promotion or not) on Sales, which of the
following regression models should be used (where X is the set of all other pertinent
variables) :
(a) ln ⁡(Sales−Quantity)=β 0 + β 1 ( Back−¿−school−Promo ) + β 2 X +ϵ
(b) ln ( Sales−Quantity )=β 0 + β 1 ln ( Back−¿−school−Promo ) + β 2 X +ϵ
(c) Sales−Quantity=β 0 + β 1 ln ( Back−¿−school−Promo ) + β 2 X+ ϵ
(d) None of the above

4. In the regression model ln Y =α 0+ α 1 ln X 1 +α 2 X 2+ ϵ , the parameter α 1is the measure of:

(a) Unit change in Y due to 1 unit change in X 1
(b) Percentage change in Y due to 1 unit change in X 1
(c) Percentage change in Y due to 1 percent change in X 1
(d) Unit change in Y due to 1 percent change in X 1

5. In the regression model ln Y =α 0+ α 1 X 1 +α 2 X 2 + ϵ

(e) α 1 is the elasticity of Y with respect to X 1
(f) α 1 is the slope of Y with respect to X 1
(g) α 1 is both the slope and the elasticity of Y with respect to X 1
(h) α 1 is neither the slope nor the elasticity of Y with respect to X 1

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 6. Consider the equation
ln ( Sales−Quantity )=β 0 + β 1 ln ( Price−Own ) + β 2 ln (Price−Comp)+ β 3 X + β 4 (Summer )+ϵ
, where Summer is the dummy variable indicating whether the observation is from summer
months or not. Also, X is the set of all other pertinent variables. In the above regression, the
parameter(s) that measure(s) how the elasticity changes during summer is
(a) β 1
(b) β 4
(c) β 1+ β 4
(d) None of the above

Q 7-11: Please use the regression output below to answer questions 7-11.

DV: ln(Sales - quantity) of Brand A

Coefficient
s P-value
Intercept -4.419 0.000
ln(Price – Brand A) -1.340 0.001
ln(Competitor 1's price) 0.450 0.004
ln(Competitor 2's price) 0.200 0.130
ATL expenses - Own (€ ) 0.011 0.006
ATL expenses - Competitor 1 (€ ) -0.005 0.000
ATL expenses - Competitor 2 (€ ) 0.004 0.703
BTL expenses - Own (€ ) 0.041 0.000
BTL expenses - Competitor 1 (€ ) -0.011 0.362
BTL expenses - Competitor 2 (€ ) 0.005 0.124
Summer month indicator (1 or 0) 0.231 0.009
ln(Own price) x Summer month indicator 0.203 0.008
ln(Competitor 1's price) x Summer month indicator 0.145 0.659
ln(Competitor 2's price) x Summer month indicator 0.190 0.655
ATL expenses - Own x Summer month indicator 0.009 0.047

7. If Competitor 1 increases price by 2% then the effect on Brand A revenue will be (using the
approximation formula % change in revenue = % change in quantity + % change in price)
(a) 2.9%
(b) 0.9%
(c) 2.0%
(d) None of the above

8. If Competitor 2 decreases price by 2% then the effect on Brand A revenue will be (using the
approximation formula % change in revenue = % change in quantity + % change in price)
(e) -0.40%

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 (f) 0.40%
(g) -2.40%
(h) None of the above
(a)

9. During summer months Brand A becomes

(a) More price elastic
(b) Less price elastic
(c) No change in price elasticity during summer
(d) Cannot determine from the regression output

10. During summer months Brand A’s ATL activities become:

(a) More effective
(b) Less effective
(c) No change in ATL expenses effectiveness
(d) Cannot determine from the regression output

11. Between 10% increase in Competitor 1 ATL expenses and 2% decrease in Competitor 1 price
which one will have greater impact on Brand A revenue:
(a) 10% increase in Competitor 1 ATL expenses
(b) 2% decrease in Competitor 1 price
(c) Both will have the same effect
(d) Neither will have any effect

12-13. Using the regression output below to answer Q 12-13.

DV: ln(Sales - quantity) of Brand A

Coefficient
s P-value
Intercept -4.500 0.000
ln(Price – Brand A) -1.800 0.001
ln(Competitor 1's price) 0.500 0.004
ln(Competitor 2's price) 0.200 0.030
ATL expenses - Own (€ ) 0.020 0.006
ATL expenses - Competitor 1 (€ ) -0.005 0.000
ATL expenses - Competitor 2 (€ ) 0.004 0.703

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BTL expenses - Own (€ ) 0.041 0.000
BTL expenses - Competitor 1 (€ ) -0.011 0.362
BTL expenses - Competitor 2 (€ ) 0.010 0.024

Scenario A Scenario B Scenario C

Brand A price +2% 0% -1%
Competitor 1 price +2% +1% 0%
Competitor 2 price +2% +2% +2%
Brand A ATL expenses +10 units +5 units -5 units
Competitor 1 ATL +10 units +5 units +5 units
expenses
Competitor 2 ATL +10 units +10 units -5 units
expenses
Brand A BTL expenses +10 units +10 units -5 units
Competitor 1 BTL +10 units +5 units -5 units
expenses
Competitor 2 BTL +10 units +5 units +5 units
expenses

12. The percentage change in sales quantity in the three scenarios are:

13. The percentage change in revenue in the three scenarios are:

14. The steps in conjoint analysis are:

a) Select attributes  select levels  generate bundlescollect survey data  run
regression and estimate partworths  estimate attribute valuation
b) Select attributes  generate bundles collect survey data  select levels  run
regression and estimate partworths  estimate attribute valuation
c) Select levels  select attributes  generate bundlescollect survey data  run
regression and estimate partworths  estimate attribute valuation
d) None of the above is correct
e) Both a and c are correct, and b is incorrect

15. HP is considering introduction of a new portable inkjet colour printer that can be connected
to any Bluetooth enabled device, including mobile phones, tablet or any type of computer.
They believe that ability to print from a mobile device (phone or tablet) is a new feature for
which the users should be willing to pay more than the standard inkjet printers that are
available in the market. In order to evaluate how much the users are willing to pay for this

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 attribute, they decided to conduct a conjoint analysis. They need to decide on the attributes
to be evaluated in the conjoint analysis. Which of the following sets of attributes will be
sufficient to get an estimate of the users’ willingness to pay for the feature ‘ability to print
from a mobile device’:
a) Ability to print from a mobile device; inkjet; battery life; print resolution
b) Portability; inkjet; battery life; print resolution
c) Ability to print from a mobile device; portability; inkjet; battery life; print resolution
d) Both a and c are correct
e) None of the above

Use the following regression output for a conjoint analysis to answer Q16 – Q17.

16. Based on the above estimates, we can claim which of the following statements to be correct:
a) Shape 2 is worth 2.833 utils more relative to Shape 3
b) Shape 3 is worth 3.333 utils less than Shape 2
c) Shape 2 is worth 6.166 utils more compared to Shape 3
d) All of the above are correct
e) None of the above is correct

17. The importance of FM as an attribute is

a) 0.28
b) 0.08
c) 0.32
d) 0.06
e) 0.26

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Use the following regression output for a conjoint analysis on a GPS device to answer Q18-Q21:

Coefficients
Intercept 3
Battery life: 32 hours vs 12 hours 16
Screen: Colour vs B&W 20
Price: $300 vs $275 -25
Screen size: 10% larger than current vs current 16

18. The dollar value per util is:

a) -2
b) -1
c) 0
d) 1
e) 2

19. The user is willing to pay how much more (in $) for 10% larger screen size:
a) 16
b) -16
c) 32
d) -32
e) None of the above

20. The most important attribute is:

a) Battery life
b) Colour screen
c) Screen size
d) None of the above
e) Cannot determine from the information provided

21. How much more can you charge for product A compared to product B if the bundles A and B
are as follows: Product A – screen size in 10% more than the current size, Colour, 12 hours
battery life, and Product B – screen size is the same as current size, B&W, 32 hours battery
life.
a) $10
b) $20
c) $30
d) $40
e) None of the above

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22. Conjoint analysis is generally used for the following purpose(s):
a) Valuation of attributes
b) Find consumer preference for various product configurations
c) Segment size assessment
d) All of the above
e) Only a and c

23. Which of the following statements is true:

a) Conjoint analysis can only be done by conducting a survey on one individual
b) Conjoint analysis can be done by conducting a survey on many individuals
c) Conjoint analysis can only be done by running regressions on each survey response.
d) All of the above
e) None of the above