MBA 693 Business Analytics for Informed and Effective Decision-Making Assignments 2/14/2017 Homework Assignment 1 Complete CardioGood Fitness Case Phase II Assignment in Appendix A of this document. Submit the completed one-page paper via Assignments in Canvas by 11:59PM, 2/19/2017. Appendix A CARDIOGOOD FITNESS CASE_PHASE II CardioGood Fitness is a developer of high-quality cardiovascular exercise equipment. Its products include treadmills, fitness bikes, elliptical machines, and e-glides. CardioGood Fitness looks to increase the sales of its treadmill products and has hired The AdRight Agency, a small advertising firm, to create and implement an advertising program. The AdRight Agency plans to identify particular market segments that are most likely to buy their clients' goods and services and then locates advertising outlets that will reach that market group. This activity includes collecting data on clients' actual sales and on the customers who make the purchases, with the goal of determining whether there is a distinct profile of the typical customer for a particular product or service. If a distinct profile emerges, efforts are made to match that profile to advertising outlets known to reflect the particular profile, thus targeting advertising directly to high-potential customers. CardioGood fitness sells three different lines of treadmills. The TM195 is an entry-level treadmill. It is as dependable as other models offered by CardioGood Fitness, but with fewer programs and features. It is suitable for individuals who thrive on minimal programming and the desire for simplicity to initiate their walk or hike. The TM195 sells for $1,500. The middle-line TM498 adds to the features of the entry-level model two user programs and up to 15% elevation upgrade. The TM498 is suitable for individuals who are walkers at a transitional stage from walking to running or midlevel runners. The TM498 sells for $1,750. The top-of-the-line TM798 is structurally larger and heavier and has more features than the other models. Its unique features include a bright blue backlit LCD console, quick speed and incline keys, a wireless heart rate monitor with a telemetric chest strap, remote speed and incline controls, and an anatomical figure that specifies which muscles are minimally and maximally activated. This model features a non-folding platform base that is designed to handle rigorous, frequent running; the TM798 is therefore appealing to someone who is a power walker or a runner. The selling price is $2,500. As a first step, the marketing analytics team at AdRight is assigned the task of identifying the profile of the typical customer for each treadmill product offered by CardioGood Fitness. The marketing analytics team decides to investigate whether there are differences across the product lines with respect to customer characteristics. The team decides to collect data on individuals who purchased a treadmill at a CardioGood Fitness retail store during the prior three months. The team decides to use both business transactional data and the results of a personal profile survey that every purchaser completes as their sources of data. The team identifies the following customer variables to study: product purchasedTM195, TM498, or TM798 gender age, in years education, in years relationship status (marital status), single or partnered annual household income ($) number of times the customer plans to use the treadmill each week number of miles the customer expects to walk/run each week self-rated fitness on an 1-to-5 ordinal scale, where 1 is poor shape and 5 is excellent shape As a member of the marketing analytics team at AdRight, YOU are assigned to participate in this task. You have already gained insight from a descriptive analysis of the data: there appears to be no difference between TM195 purchasers and TM498 purchasers but these two groups appear to be distinctly different from the TM798 purchasers; therefore, to create and implement a marketing campaign for its treadmills, CardioGood Fitness should design two advertising creatives to target two market segments - one to reach TM195 and TM498 purchasers and one to reach TM798 purchasers. Given that the data used for the descriptive analysis, is a sample from a larger targeted population, you now want to conduct statistical inference to see if hypothesis testing supports your descriptive analysis conclusion. You combine TM195 and TM498 purchasers into one segment and keep TM798 purchasers in separate segment. Based on the analysis that appears on the following pages, present a written summary (one page max) that highlights test results for comparing market segment 1 (TM195 and TM498 purchasers) and market segment 2 (TM798 purchasers) with respect to gender, age, education, relationship status, annual household income, treadmill use, exercise activity, and self-rated fitness? Contingency Analysis of Gender By Segment Count Total % Col % Row % TM195_498 TM798 Total Female Male Total 69 38.33 90.79 49.29 7 3.89 9.21 17.50 76 42.22 71 39.44 68.27 50.71 33 18.33 31.73 82.50 104 57.78 140 77.78 40 22.22 180 Test ChiSquare Prob>ChiSq Likelihood Ratio 14.009 0.0002* Pearson 12.885 0.0003* Fisher's Exact Test Left Right 2-Tail ProbAlternative Hypothesis 1.0000Prob(Gender=Male) is greater for Segment=TM195_498 than TM798 0.0002*Prob(Gender=Male) is greater for Segment=TM798 than TM195_498 0.0003*Prob(Gender=Male) is different across Segment Two Sample Test for Proportions Description P(Female|TM195_498)-P(Female| TM798) Proportion Lower 95% Upper 95% Difference 0.317857 0.158034 0.446929 Adjusted Wald Test P(Female|TM195_498)-P(Female|TM798) 0 P(Female|TM195_498)-P(Female|TM798) 0 P(Female|TM195_498)-P(Female|TM798) =0 Prob <.0001* 1.0000 <.0001* Contingency Analysis of Marital Status By Segment Count Partnered Total % Col % Row % TM195_498 84 46.67 78.50 60.00 TM798 23 12.78 21.50 57.50 Total 107 59.44 Single Total 56 31.11 76.71 40.00 17 9.44 23.29 42.50 73 40.56 140 77.78 40 22.22 180 Test ChiSquare Prob>ChiSq Likelihood Ratio 0.080 0.7768 Pearson 0.081 0.7764 Fisher's Exact Test Left Right 2-Tail ProbAlternative Hypothesis 0.6812Prob(MaritalStatus=Single) is greater for Segment=TM195_498 than TM798 0.4571Prob(MaritalStatus=Single) is greater for Segment=TM798 than TM195_498 0.8556Prob(MaritalStatus=Single) is different across Segment Two Sample Test for Proportions Description P(Partnered|TM195_498)-P(Partnered| TM798) Adjusted Wald Test P(Partnered|TM195_498)-P(Partnered| TM798) 0 P(Partnered|TM195_498)-P(Partnered| TM798) 0 P(Partnered|TM195_498)-P(Partnered| TM798) = 0 Proportion Lower 95% Upper 95% Difference 0.025 -0.14284 0.197161 Prob 0.3771 0.6229 0.7542 Analysis of Fitness By Segment t Test TM798-TM195_498 Assuming equal variances Difference 1.68929t Ratio 14.43931 Std Err Dif 0.11699DF 178 Upper CL Dif 1.92016Prob > |t| <.0001* Lower CL Dif 1.45842Prob > t <.0001* Confidence 0.95Prob < t 1.0000 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 2.93571 0.05515 2.8269 3.0445 4.62500 0.10318 4.4214 4.8286 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 1.68929t Ratio 14.20624 Std Err Dif 0.11891DF 61.60215 Upper CL Dif 1.92702Prob > |t| <.0001* Lower CL Dif 1.45155Prob > t <.0001* Confidence 0.95Prob < t 1.0000 Analysis of Age By Segment t Test TM798-TM195_498 Assuming equal variances Difference 0.4000 t Ratio 0.320515 Std Err Dif 1.2480 DF 178 Upper CL Dif 2.8628 Prob > | 0.7490 t| Lower CL Dif -2.0628 Prob > t 0.3745 Confidence 0.95 Prob < t 0.6255 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 28.7000 0.5883 27.539 29.861 29.1000 1.1006 26.928 31.272 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 0.4000 t Ratio 0.32016 Std Err Dif 1.2494 DF 62.92625 Upper CL Dif 2.8967 Prob > | 0.7499 t| Lower CL Dif -2.0967 Prob > t 0.3750 Confidence 0.95 Prob < t 0.6250 Analysis of Education By Segment t Test TM798-TM195_498 Assuming equal variances Difference 2.25357 t Ratio Std Err Dif 0.23662 DF Upper CL Dif 2.72052 Prob > | t| Lower CL Dif 1.78663 Prob > t Confidence 0.95 Prob < t 9.52392 178 <.0001* <.0001* 1.0000 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 15.0714 0.11154 14.851 15.292 17.3250 0.20868 16.913 17.737 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 2.25357 t Ratio 8.083988 Std Err Dif 0.27877 DF 51.85437 Upper CL Dif 2.81300 Prob > | <.0001* t| Lower CL Dif 1.69414 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000 Analysis of Income By Segment t Test TM798-TM195_498 Assuming equal variances Difference 27928.3 t Ratio 13.27628 Std Err Dif 2103.6 DF 178 Upper CL Dif 32079.5 Prob > | <.0001* t| Lower CL Dif 23777.0 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 47513.3 991.7 45556 49470 75441.6 1855.2 71781 79103 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 27928.3 t Ratio 9.240581 Std Err Dif 3022.4 DF 44.33881 Upper CL Dif 34018.1 Prob > | <.0001* t| Lower CL Dif 21838.4 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000 Analysis of Usage By Segment t Test TM798-TM195_498 Assuming equal variances Difference 1.69643 t Ratio 11.47128 Std Err Dif 0.14788 DF 178 Upper CL Dif 1.98826 Prob > | <.0001* t| Lower CL Dif 1.40460 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 3.07857 0.06971 2.9410 3.2161 4.77500 0.13042 4.5176 5.0324 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 1.69643 t Ratio 10.35367 Std Err Dif 0.16385 DF 55.31453 Upper CL Dif 2.02475 Prob > | <.0001* t| Lower CL Dif 1.36811 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000 Analysis of Miles By Segment t Test TM798-TM195_498 Assuming equal variances Difference 81.9314 t Ratio Std Err Dif 7.0169 DF Upper CL Dif 95.7784 Prob > | t| Lower CL Dif 68.0844 Prob > t Confidence 0.95 Prob < t 11.6763 178 <.0001* <.0001* 1.0000 Means for Oneway Anova Level Number TM195_498 140 TM798 40 Mean Std Error Lower 95% Upper 95% 84.969 3.3078 78.44 91.50 166.900 6.1883 154.69 179.11 Std Error uses a pooled estimate of error variance t Test TM798-TM195_498 Assuming unequal variances Difference 81.931 t Ratio 8.319717 Std Err Dif 9.848 DF 45.01257 Upper CL Dif 101.766 Prob > | <.0001* t| Lower CL Dif 62.097 Prob > t <.0001* Confidence 0.95 Prob < t 1.0000