A large South African hardware chain store hired a marketing research company toconduct research into the effectiveness of introducing a new power tool at a discounted price. A representative sample of 120 stores in the chain was chosen,and the stores were randomly split into two equal groups of 60 stores. These stores did not advertise, and displayed their merchandise in similar ways. A new kind of power tool was introduced in all 120 stores. Group A introduced the power tool at the special low price of R599, with the price increasing to R649 after four weeks. Group B introduced the power tool at the regular price of R649. Total sales of the powertools were computed for each store for the first four weeks. The results are given below.

This research was conducted under a 95% confidence level.

Group Average number Average number Difference Coefficient of discounted of standard sales between of variation sales per week per week discounted sales and standard sales Group A 50 5,8% (R599) Group B 66 15,5% (R649) -16