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