Sales promotions that are used by manufacturers to entice retailers to carry, feature, or push the manufacturer's products are called trade promotions. A survey of 250 manufacturers conducted by Cannondale Associates, a sales and marketing consulting firm, found that 91% of the manufacturers believe their spending for trade promotions is inefficient (Potentials in Marketing, June 1995). Is this sufficient evidence to reject a previous claim by the American Marketing Association that no more than half of all manufacturers are dissatisfied with their trade promotion spending?

a. Conduct the appropriate hypothesis test at a = .02.

Begin your analysis by determining whether the sample size is large enough to apply the testing methodology presented in this chapter.

b. Report the observed significance level of the test and interpret its meaning in the context of the problem.