A major supermarket chain wants to determine the effect of promotion on relative competitiveness. Data were obtained from 15 states on the promotional expenses relative to a major competitor (competitor expenses = 100) and on sales relative to this competitor (competitor sales = 100).

You are assigned the task of telling the manager whether there is any relationship between relative promotional expense and relative sales.
a. Plot the relative sales (K-axis) against the relative promotional expense (X-axis), and interpret this diagram.
b. Which measure would you use to determine whether there is a relationship between the two variables? Why?
c. Run a bivariate regression analysis of relative sales on relative promotional expense.
d. Interpret the regression coefficients.
e. Is the regression relationship significant?
f. If the company matched the competitor in terms of promotional expense (if the relative promotional expense was 100), what would the company's relative sales be?
g. Interpret the resulting r2.

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Relative Promotional Expense Relative Sales State No 95 92 103 115 98 94 110 125 82 84 112 4 79 105 94 85 101 106 120 118 75 93 107 114 132 129 79 105 10 12 13 14