Question

Question # 3

Great plains Roofing and Siding Company inc. Sells roofing and siding products to home repair stores like lowes and home depot and commercial contractors. The owner is interested in studying the effects of several variables on the value of shingles sold (in thousands). The marketing manager is arguing that the company should spend more on advertising , while a market researcher suggests it should focus more on making its brand and product more distinct from its competitors.

The company has divided their target marketing area into districts. In each district , it collected information on the following variables: volume of sales (in thousands), advertising dollars (thousands), number of active accounts, number of competing brands, and a rating of the districts potential an example of the first few lines of data is below

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.994565583
R Square	0.989160699
Adjusted R Square	0.98709607
Standard Error	9.604406128
Observations	26
ANOVA
	df	SS	MS	F	Significance F
Regression	4	176777.1	44194.27	479.0986	2.65E-20
Residual	21	1937.137	92.24462
Total	25	178714.2
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	178.3203403	12.96032	13.75895	5.62E-12	151.3679	205.2728
Ad Dollars	1.807064337	1.081039	1.671599	0.10944	-0.44108	4.055209
Number of accounts	3.317833433	0.162892	20.36833	2.6E-15	2.979081	3.656585
Number of Competitors	-21.18498417	0.787939	-26.8866	9.41E-18	-22.8236	-19.5464
Potential	0.324512401	0.467764	0.693752	0.495441	-0.64826	1.297282

1. Who is right? The marketing manager or The market researcher? Use this regression output to justify your answer.

Answer 1

Please don't hesitate to give a "thumbs up" in case you're satisfied with the answer
The owner is interested in studying the effects of several variables on the value of shingles sold (in thousands).

The p-value of "Ad Dollars" variable of 0.10944 is more than alpha = .05, indicating that the variable is statistically insignificant

Hence, there is no statistically significant linear relation, and hence, the marketing manager' arguement that more money should be spend on advertising is wrong

While a market researcher suggests it should focus more on making its brand and product more distinct from its competitors. The p-values of "Number of competitors" and "Potential" is below .05, indicating that these are statistically significant variables

Hence the market researcher is correct