Scenario Larry, the head of Marketing has heard about you. And at TNH Tires, like much of the rest of the world, the reward for

Question

95 users unlocked this solution today!

Scenario

Larry, the head of Marketing has heard about you. And at TNH Tires, like much of the rest of the world, the reward for good work is more work.

Larry: Thank you so much for making time for me. Manny says that youre a miracle worker

TNH Tires is piloting a new service called Sports Select, a new premium sports Tire kit service. Subscribers are mailed kits that each contain all the tires and the parts that a customer would need to put all the tires in their special sport cars. All the customer needs to do is to follow the provided instructions and the they will be driving their new wheels in no time. Larry needs to gauge their interest in this new service and decide whether to market it nationally.

Larry, has stated that at least 85% of the potential customers must express some desire for the

service and, for those who exhibit an interest, the average cost they are willing to pay per two-tire kit package must be at least $47.50. Larry insists that you be 95% certain of your findings.

Larry: Because this is a relatively new service on the market, we need some additional insight into how TNH Tires would fit into our customers lives and what theyd be willing to pay for a service like this. We conducted a survey of 50 potential customers. Can you prepare a memo that includes your findings and recommendations?

Mini-Case

In your memo, you should include the raw data and a clear interpretation of the data that justifies your findings. Use the raw data below to write your memo. Since you only have sample data, you decide to determine confidence intervals.

Of the 50 potential consumers surveyed, 34 expressed an interest in purchasing it. The maximum price each would be willing to pay is shown in the table below.

Using the data, answer the following questions:

1. How would you reply to the Larrys request for information?

2. Should the service be marketed?

3. How large should the sample be if you want to maintain a 95% level of confidence and suffer a maximum error of $2.00 in your estimate of the highest price consumers are willing to pay?

Maximum Prices

47	62	46	43	53	34
54	45	35	65	36	32
54	45	31	34	36	25
38	37	56	35	43	65
43	48	54	37	46	65
54	42	47	63