The tables in the attached excel is a database extract that shows a cross-tabulation of frequent-flier mileage categories (high, med, low) by Age-category (younger, older). A travel offer was made to 5000 people in the analytic sample

?Table 1 shows the counts of the 5000 people in the analytic sample.

?Table 2 shows the counts as a percentage of the 5000 people in the analytic sample

?Table 3 shows the number of orders placed for the travel offer.

?Table 4 shows the response rate for the travel offer

HW:

1.Create a new table showing indexes of observed response rates, relative to the overall rate. Then based on the index table you created, create 3 segments labeled as follows (if nec., refer to textbook chapter 7, and slides from week 3, for a refresher on Indexes)

2.Segments: Yes (index >= 120), Maybe (index between 100-120), No (index

3.If the entire customer file is 100,000 customers, how many customers are there in each of the "Yes", "Maybe", and "No" categories?

4.What might be the observed response rate for the "Yes" segment that you want to market to?

5.Past marketing efforts (before this new segmentation) showed an overall response rate of 5.24%. If new offers are to be sent and targeted to the "Yes" segment, what is the expected response rate for the "Yes" segment? And what is the response rate index?

6.How many orders to the travel offer would you expect?

A B C D E F G H K L N W Table 1: Counts Table 2: Percentage Distribution 4 high med low subtotal high med low subtotal 5 younger 250 250 550 1050 younger 5.00% 5.00% 11.00% 21.00% 6 older 1700 1250 1000 3950 older 34.00% 25.00% 20.00% 79.00% 7 subtotal 1950 1500 1550 5000 total subtotal 39.00% 30.00% 31.00% 100.00% total 8 9 10 Table 3: Number of orders Table 4: Response Rate 11 high med low subtotal high med low subtotal 12 younger 19 24 22 65 younger 7.60% 9.60% 4.00% 6.19% 13 older 88 69 185 older 5.18% 5.52% 2.80% 4.68% 14 subtotal 107 93 50 250 total subtotal 5.49% 6.20% 3.23% 5.00% total 15