Questions and Answers of Essentials Of Marketing Analytics

An intertemporal two-product lift looks at sales of two products at diff erent points in time (say Product 1 at time x and Product 2 at time x + 6 months).How could an insurance company use
A virtual lift includes a nonproduct element such as a demographic attribute(age, gender, income, and so on). How could a retailer use knowledge of virtual lifts to increase profi ts?
How could Amazon.com use the concept of lift to make book or music recommendations?
For the fi le marketbasket.xls, fi nd the second-largest two-product and day-of-week lifts.
The file market basket date.xls contains sales transactions at ITZIs, an upscale grocery store.a. Determine all two-product lifts and list the five largest lifts.b. Determine the largest
The Simpsons first aired on TV in the United States in 1989. Give a 95 percent confidence interval for the last year in which The Simpsons will air.
Give a 90 percent confidence interval for the number of future years for which Beatles' music will be played in the United States.
Beatles' music was first played in the United States in 1964. By the Copernican Principle, on average for how many more years will Beatles' music be played in the United States?
Determine if the following statement is True or False: As Q/P increases, the trajectory of product diffusion becomes more S-shaped.
Suppose you wanted to determine whether products diffuse more quickly in developed or developing countries. Outline how you would conduct such a study.
How would this information affect your marketing strategy?
Suppose you work for a company that produces frozen food dinners and have found that for "traditional" dinners (mac and cheese, fried chicken, and so on) the Bass model has P near 1 and Q near 0, and
For the iPodseasonal.xls data file in Chapter 26, incorporate seasonality and fit a Bass model to the quarterly IPOD sales.
5. Explain the differences in the P and Q values you found in Exercises 2-4.
4. Fit the Bass model to the Sweden Internet data in Chapter
Fit the Bass model to the Nigeria Internet data in Chapter
Fit the Bass model to the data in the file Worldcell.xslx. Exercises 3-5 use the Chapter 26 file Internet2000_2011.xls.
The file Dishwasher.xlsx contains product sales for dishwashers in the United States. Fit the Bass model to this data.
By randomly drawing values of P and Q from a set of analogous products and modeling as a normal random variable, you can simulate the range of possible product sales.
The GRG Multistart Solver Engine can be used to estimate P. Q. and N. By using an analogous product to estimate P and Q and intentions data to estimate N, you can use the Bass model to estimate new
The Bass model breaks down product sales into an innovation (P) and imita- tion (Q) factor.
The fi le Wikipedia.xlsx gives the number of Wikipedia articles (in English)for the years 2003–2012. Use this data to predict the future growth of Wikipedia.
The fi le Facebook.xlsx gives the number of users of Facebook (in millions)during the years 2004–2012. Use this data to predict the future growth of Facebook.
Su ppose it is now the end of 2004. Using the data in the fi le worldcellpearl.xlsx, develop predictions for world cell phone usage. How accurate are your predictions?
Show that for a Logistic curve the infl ection point occurs when x(t) = L/2.
Estimate the percentage of people in Brazil who will eventually be on the Internet. Is Internet usage in Brazil past the infl ection point?
Estimate the percentage of people in Sweden who will eventually be on the Internet. Is Internet usage in Sweden past the infl ection point?
Estimate the percentage of people in India who will eventually be on the Internet. Is Internet usage in India past the infl ection point?
Estimate the percentage of people in the United States who will eventually be on the Internet. Is Internet usage in the United States past the infl ection point?
Estimate the percentage of people in Nigeria who will eventually be on the Internet. Is Internet usage in Nigeria past the infl ection point?
In 2002 were U.S. cell phones per capita past the infl ection point?Exercises 5–9 use the data in the fi le Internet2000_2011.xls. This fi le contains the percentage of people with Internet access
Forecast U.S. cell phones per capita for the years 2003–2005.
Fit a Gompertz curve to this data, and estimate the inflection point and upper limit for cell phones per capita.
Fit a Pearl curve to this data, and estimate the inflection point and upper limit for cell phones per capita.
Explain how the Obama campaign could have used decision trees.
For the Greek yogurt example verify that if the parent node is Income =Average then splitting on gender yields an impurity of 0.811, whereas splitting on marital status yields an impurity of 0.
Suppose you want to use age and tobacco use statistics to develop a decision tree to predict whether a person will have a heart attack during the next year.What problem would arise? How would you
How could L.L. Bean use classifi cation trees?
Show that when there are two classes the maximum entropy occurs when both classes have equal probability and the minimum entropy occurs when one class has probability 1.
The classification error measure at a node is 1-maxi (P(Class-1|X-a)).a. Show that when there are two classes the maximum impurity occurs when both classes have equal probability and the minimum
b. Use the Gini Index to determine the first node split for the Greek yogurt example.
The Gini Index measure of impurity at a node is defined as the following: -P(Class = |X=a)a. Show that when there are two classes the maximum impurity occurs when both classes have probability .5 and
Will a voter vote Republican or Democratic in the next presidential election?
Will a person suffer a heart attack in the next year?
Will a family purchase a riding mower during the next year?
How could the concept of a Training set be used to improve the quality of the estimated ratings defined by Equations 1 and 27
Use item-based filtering to predict each missing rating in the table.
Use user-based filtering to predict each missing rating in the table.
7. Do an Internet search for Claritas. How are Claritas's services based on cluster analysis?The following table shows ratings for six people and six movies. Jane Movie 1 Movie 2 Movie 3 Movie 4
Verify that the z-scores for each attribute in the file cluster.xlsx have a mean of 0 and a standard deviation of
The file NewMBAdata.xlsx contains average undergrad GPA, average GMAT score, percentage acceptance rate, average starting salary, and out of state tuition and fees for 54 top MBA programs. Use this
The file cereal.xls contains calories, protein, fat, sugar, sodium, fiber, carbs, sugar, and potassium content per ounce for 43 breakfast cereals. Use this data to perform a cluster analysis with
When you ran your four-cluster U.S. City analysis, you did not put in a con- straint to ensure that Solver would not pick the same city twice. Why was it not necessary to include such a constraint?
Run a five-cluster analysis on your US City data.
Run a three-cluster analysis on your U.S. City data.
Verizon is trying to determine the value of a cell phone subscriber in Bloomington, Indiana, and the optimal levels of acquisition and retention spending. Currently Verizon has 20,000 customers and
The local Ford dealer wants to determine whether to give all purchasers of new cars free oil changes. The Forddata.xlsx contains information on loyalty of car purchasers. A sample of this data is
GM wants to determine whether to give a $1,000 incentive this year to buyers of Chevy Malibus. Here is relevant information for the base case:■ Year 1 price: $20,000■ Year 1 cost: $16,000■ Each
You work for OJ's Orange Juice. Currently there are 10 million customers, and each week a customer buys 1 gallon of orange juice from OJ or a competitor. The current profit margin is $2 per gallon.
You own a business magazine CY. At the beginning of year 1, you have 300,000 subscribers and 700,000 nonsubscribers who are considered pos- sible subscribers in the future. Determine whether it is a
Suppose each customer purchase of a product generates $10 in profit. Each month a customer either buys 0 or 1 unit of the product. If a customer bought last month, there is a 0.5 chance she will buy
Use a one-way Data Table to analyze how sensitive the attractiveness of the investment is to a change in the assumption that working capital = 10 percent of annual revenue.
In your analysis of Iron Pit, you assumed the annual fee was $400. How would you determine whether the assumed $400 annual fee was appropriate?
For the Iron Pit example, suppose that during year 1 Iron Pit would gain 2,000 new customers, but each year the number of new customers dropped 10 percent. Would this increase or decrease the
Why do you think that our customer-centric approach to valuation is often called the eyeball approach?
A nice way to value new companies is to say Company Value = NPV of customer value from all current and future customers. Gupta and Lehmann (2006) used this approach to value Amazon.com as of March
Modify the Ironpit.xlsx analysis to incorporate an annual growth rate in membership fees, annual fixed cost, and annual costs per customer.
Assume that for N years the number of new customers will grow at G percent per year, and thereafter the number of new customers will drop by D percent per year. Modify the Ironpit.xlsx file to
Modify Equation 3 if $1 of profit is generated at the end, not the beginning of each period.
Which customer is most likely to still be active? Can you explain this result?
Customers 1 and 2 have been with a company for 12 months. Customer 1 has made four purchases and Customer 2 has made two purchases. Each customer's last purchase was at the end of month
Estimate the probability the customer is still active.
Assume a customer has been with a company for 10 years and has made purchases at times.2, 1.2, .8, and
The file retentiondata.xlsx gives retention data on a sample of magazine subscribers. Some of this data is shown in Figure 19-3. For example, the first person was a subscriber for 7 years and is no
Each year Capital Two retains 75 percent of its customers, and the annual discount rate is 5 percent. What annual retention rate doubles the value of a customer?
Assume the annual retention rate for a cell phone subscriber is 70 percent and the customer generates $300 per year in profit. Assuming an annual discount rate of 8 percent, compute the value of a
It costs Ameritrade $203 to acquire a customer. Ameritrade earned $200 per year from a customer and had an annual retention rate of 95 percent. Assuming cash flows are discounted at 12 percent,
AOL bought customers from CD Now for $60 per customer. CD Now's annual retention rate was 60 percent, and customers generated $15 of profit per year. Assuming an annual discount rate of 12 percent,
Given N = Number of purchases, t = Time of last purchase, T = Time elapsed between acquisition of customer and present time, and T = 1/T, (T*)" estimates the probability a customer is still active at
Given the retention rate, discount rate, and profit per period generated by a customer, the customervalue.xls workbook can be used to easily compute the value of a customer.
P&G wants to determine if it should introduce a new, cheaper version of Head and Shoulders shampoo. It asked a focus group which of three prod- ucts it would prefer at different prices (see Figure
P&G is doing a discrete choice analysis to determine what price to charge for a box of Tide. It collected the data shown in Figure 18-12. For example, when people were asked which they prefer:
In her book Discrete Choice Modeling and Air Travel Demand (Ashgate Publishing, 2010), Per Laurie Garrow details how airlines have predicted how changes in flight prices will affect their market
The multinomial logit version of discrete choice enables you to easily compute price elasticities using the following equations: (8) Price Elasticity for Product j = (1- Prob(j)) * Price (j) * (j)
The Independence of Irrelevant Alternatives (IIA) that follows from Equation 2 implies that the ratio of the probability to choose alternative i to the prob- ability to choose alternative j is
In a discrete analysis, a Chi Square Test based on the change in the Log Likelihood Ratio can be used to assess the significance of a changing cell.
Maximum Likelihood is used to estimate the parameters (such as brand equity and price sensitivity) in the scoring equation.
The fraction of decision makers that choose alternative j is assumed to follow the multinomial logit model: (1) ev, where V, - score for alternative j
The analyst must determine a model that is used to "score" each alternative based on the level of its attributes.
To begin a discrete choice analysis, decision makers are shown a set of alter- natives and asked to choose their most preferred alternative.
A discrete choice analysis helps the marketing analyst determine what attri- butes matter most to decision makers and how levels of each attribute are ranked by decision makers.
Determine the price premium a national brand product can command over a generic product.
Model how companies should dynamically change prices over time. Estimate price elasticity.
Estimate price sensitivity and brand equity for different video games, and determine the profit maximizing price of a video game.
Estimate consumer preferences for different types of chocolate.
In 2012 the Obama campaign made extensive use of logistic regression. If you had been working for the Obama campaign how would you have used logistic regression to aid his re-election campaign?
The file shuttledata.xlsx contains the following data for several launches of the space shuttle: Temperature (degrees Fahrenheit) Number of O-rings on the shuttle and the number of O-rings that
Using the data in the data worksheet of the file subscribers.xlsx, show that for the magazine example logistic regression resolves the problems of non-normal residuals and heteroscedasticity.
Show that in a logistic regression model if an independent variable xi is increased by 1, then the odds ratio will increase by a factor of e
The file RFMdata.xlsx contains the following data: Whether a person responded (dependent variable 1) or did not respond (dependent variable = 0) to the most recent direct mail campaign. R: recency

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