MARKETING ANALYTICS

Nopane Advertising
Nopane Factors
Sales: Unit Sales of Nopane per 100 prospects
Nopane Ad Dollars: Number of dollars per 100 prospects
spent on Nopane advertising
Competition: No. of dollars per 100 prospects spent by
competitors advertising
Dum Copy: 1 if emotional copy is used
Dum Segm: 1 if sales territory is in Segment A
Assuming Alison Silks hypothesis is correct, which
of the regressions is most relevant for choosing an
advertising strategy ?
Silks Hypothesis: Nopanes competitor will react to our national
strategy (whatever it might be) in the same way as they did in the
test

Regression 1 requires knowledge of Competitors spending

We dont know this with Certainty so use Regression 3
Why cant we use Regression 2 to predict what the
competition will spend ?

There are several issues

One is that the adjusted R-squared for regression 2 is only about
50.68%
This means that regression 2 does not account for 50% of the
variability in the competition advertising spending
So statistically speaking we could wind up a value that is highly
unreliable

Furthermore there are issues that arise when trying to use the same
dataset to both estimate regression coefficients and predict
independent variables