Snowman is a 170-year-old firm now owned by Nestle who also owns RS Candies, Fransisco Lindor and Ferrero Rocker, with which the Sampler is often displayed on Rite-Aid or CVS endcaps. The target market is one that wishes to pick up some- thing unexpected, mid-priced and quick.You are charged with estimating the average dollar sales response of these gift boxes with respect to the gift box price so you ran a quick regression based on the available scanner data and other factors listed below (disregarding seasonality).The estimated demand function for Sampler Snowman's Gift box is given below below: (Assume all coefficients are significant and the R²=0.60).54 observations were used in Snowman's marketing mix.

Ln (Sales) = 11.65 -0.90 Ln ($ Price)- .03 Ln ($ Advertising) + 1.27 Ln(Promotions) +1.59 (Packaging color dummy) -0.24 Seasonal dummy 1 -0.14 Seasonal dummy 2 -0.13 (Packaging color dummy* Promotions).

A.What is the coefficient of Gift box price in economic terms?Is this in line with theory?What does this tell you about the average sales response you may expect from the analysis based on gift box prices (currently at $9.99 and $11.99 in the 2 time periods).

B. How would you describe the effectiveness of promotions on sales demand?