Based on the following text analyze the Keels data analysis output provided. Use the four statistical output files (ANOVA, Correlation, Descriptives and Chi-Square, and Linear regression) to investigate the Keels case study. Using the case facts to create research questions, review the relevant data analyses (output provided above), and develop the final marketing research report. Use the Markkula Center for Applied Ethics to evaluate the ethical impacts of the recommendation, and include this information in the defense of the final decision: "The Keels Agency (TKA) is a small advertising agency in Portland, Oregon that helps clients get the biggest return on their advertising dollars. TKA specializes in working with companies that are looking to advertise their products and services for the first time. Such companies are typically newer businesses that have begun to grow and now have the revenues to take the next step by investing in advertising. TICA has a good track record of helping these companies feel comfortable with their expenditure of advertising dollars. As pointed out by Beth Keels, founder and CEO of this agency, the costs incurred with advertising can be considerable and are always perceived as a relatively high percentage of clients' revenues. For first-time clients, the thought of investing in advertising, no matter how much sense it might make, always leads to questions about whether the expense will be worth the investment. Companies like TKA typically try to identify the particular market segments that are most likely to buy their clients goods and services and then locate an advertising outlet that will reach this particular market group. Client groups require considerable explanation about how this "matching" occurs. Beth Keels typically explains it like this: We collect a lot of information on clients' actual sales over a two to three-month period and on individuals who make those purchases. We get this information from a variety of sources, including surveys, interviews, credit records, mailing lists, contests, and so forth. Our goal is to learn as much as we can about our clients customers to see whether there might be a distinct "profile" of the typical customer for a particular product or service. If a distinct profile emerges from our research, then we try to match that profile to advertising outlets, such as TV, radio, newspapers, and magazines known to be watched, listened to or read by people with this particular profile. In this way, we target advertising directly to high potential customers. This procedure goes a long way in helping our clients feel more comfortable that at least the money spent on advertising is putting their products and services in front of the right audience. We've been doing it this way for years and have a long track record of being successful. TKA recently signed a new client, Cycle World, in nearby Seattle. Cycle World markets, under its own name, three lines of racing and mountain bikes, made by several bicycle manufacturers. Cycle World currently sells its bikes in their six retail outlets in major cities throughout the Northwest. Cycle World is now ready to launch a direct sales campaign of their products by advertising bicycles in nationally-distributed magazines. This direct sales effort will rely on reaching potential customers by placing half-page, two-color ads in popular magazines that have large, national subscription bases. The marketing campaign would attempt to (1) create name recognition for Cycle World's products based on placing five ads in each issue of chosen magazines, and (2) offer customers savings that result from eliminating the "middle-man." Thus, it is clear that choosing target magazines for each product is crucial in order to ensure that Cycle World's new venture will be successful. They have set aside $240,000 to advertise their products in this manner. In addition to the costs of placing the ads, this budget must also cover TKA's separate charges to Cycle World for the creation and production of the advertising copy as well as their fee and overhead charges. Choosing the wrong magazine not only means that this total budget is being spent on multiple ads to reach the wrong audience, but that the real potential customers would still go unreached.

Cycle World sells three lines of bicycles. The lower line includes "basic" racing and mountain bikes. These bicycles, made by the largest bicyc1e manufacturer in the U.S., tend to be heavy as far as bikes go, have relatively few features and offer few customer options. Their middle line, made by a popular West Coast manufacturer, includes bicycles that are made of light- weight metals have many features that serious bikers want and that provide a modest number of options to help buyers customize their bikes. The upper line is made by one of Europe's leading bicycle manufacturers, and includes bicycles that are made of ultra-light alloy metals, that have all the "bells and whistles" which can be put on a bike. Customers are allowed to choose among a number of options to customize their purchases from the upper line of bicycles. Beth Keels put together a market research team to identify the profile of the typical customer for each product line. To collect this information, the market research team collected information from persons who purchased bicycles at Cycle World's six retail stores. A random sample of customers during a two-month period was asked to complete a short survey that contained descriptive questions about themselves. To encourage customers to complete the survey, each was offered as a gift for their participation, a biker's helmet, a mileage meter, or a bicycle tire pump. Over 90 percent of the sampled customers completed the survey. Questions were chosen to get an understanding of the demographic background (i.e., age, gender, marital status, education) and the interest level in biking (i.e., extent of use, fitness level, and self-rated interest) of customers. Based on these data, a profile of the "typical" customer for each product line of merchandise needed to be created and compared to the "typical" subscriber profile for a list of magazines. The list of potential magazines was chosen to reflect three issues: (a) the subscriber base needed to be a national one, (b) the subscriber list needed to fall in the moderate size category for nationally-distributed magazines, and (c) the magazine needed to focus on a particular topic or theme. Cycle World very specifically wanted to reach a national market in their first attempt to enter the direct sales arena. They reasoned that this was the best way to guard against the problems created by unpredictable, cyclical, regional economic downturns. The choice of looking at magazines in the moderate-sized national subscription base would mean that ads would be similar in costs and within Cycle World's advertising budget. Finally, the typical subscriber was expected to represent a larger proportion of the subscriber base for magazines with a particular focus or theme. The list of potential magazine outlets, and the profile of the typical customer for each, are provided in Table 1. The magazines in Table 1 were chosen as possible advertising outlets because they have a moderately large national subscription base and focus on particular themes. The data in Table 1 reflect the average age, salary, activity level of subscribers (1 = none to 5 = very active), the percent of subscribers who are male, and the modal educational background of subscribers (HS = high school diploma, BA= bachelor's degree, and Tech= technical certificate from a trade school). The average cost of a half-page ad in these magazines is approximately $2,000 per issue. Data Description File KEELS.DAT on the Data Disk contains the coded data from the survey of Cycle World customers. Data are recorded in the manner depicted below. These data are coded as follows: Product line 1 = low product line, 2 = middle product line, 3 = high product line. Age Age on last birthday Sex 1 = male, 2 = female. Education 1 = no high school diploma 2 = high school diploma, 3 = some college level work, 4 = college degree, 5 = graduate work or degree. Marital status 1=single, 2=married Income Annual family income, rounded off to the nearest $1000. Times/Week Average number of times the person uses or plans to use bicycle each week. Fitness Self-rated fitness level, based on scale ranging from 1=poor to 5=excellent

Magazines Age %Male Education Salary Level ALIVE! 26 45 BA 26,000 5 Business World 30 70 BA 50,000 4 Chinese Cooking 38 30 HS/BA 34 3 Computer Technician 34 92 Tech/BA 37,000 2 Country Cookin' 32 20 HS 20,000 2 Crafters 32 30 HS/BA 34,000 3 Creative Projects 28 20 HS/BA 32,000 4 Cycle Time 29 65 BA 60,000 5 Electronics Today 42 90 Tech/BA 42,000 2 Entrepreneur's Day 26 90 HS 27,000 3 Family Living 30 55 HS/BA 31,000 3 Fashion Flair 20 10 HS 14,000 4 Fishennan s Line 50 90 HS 34,000 3 Gounnet's Kitchen 46 60 BA 56,000 3 Outdoor Fun 27 55 HS/BA 30 3 Naturalists 38 60 BA 45,000 3 Parent's Digest 28 50 HS/BA 29,000 2 Runners World 43 70 BA 38,000 5 RV Country 57 69 HS/BA 28,000 2 Software Review 28 60 BA 48,000 4 Sporting World 28 52 HS/BA 31,000 4 Sports Line 35 76 HS 28,000 4 Today's Cyclist 25 10 HS 22,000 2 Today's Home Video 32 40 BA 36 2 Traveler's Digest 46 60 HS/BA 44,000 4 Who's Hot In The Movies 29 45 HS/BA 29,000 2 Who's Hot In Music 22 30 HS 18,000 3 Who's Hot In Sports 25 80 HS 22,000 3 Woman's World Tcxlay 28 10 BA 34,000 3 Wood Crafters 42 85 HS/BA 42,000 3"