Assignment 1 - MKTG 352 - Margaret Sears

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University of South Carolina *

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102

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Industrial Engineering

Date

Dec 6, 2023

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docx

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Assignment 1: – A/B Testing Q1: Please review the Rocket Fuel case along with our discussion in the class and answer the following questions. (25 Points) Q1a: What is the independent variable in the experiment described in the Rocket Fuel case? (7 Points) The independent variable in the Rocket Fuel case was whether or not each user saw the advertisement or not. Q1b: What type of data (nominal, ordinal, interval, ratio) is the independent variable? (5 Points) The independent data was Nominal data. Q1c: What is the dependent variable in the experiment? (7 Points) The dependent variable in the Rocket Fuel case was whether or not they ended up purchasing or converting or not. Q1d: What type of data (nominal, ordinal, interval, ratio) is the dependent variable? (6 Points) The dependent data was Ordinal data. Q2: Was the advertising campaign effective? (i.e., did additional consumers convert because of the advertising campaign?). Answer each of the following questions below will lead you to the answer of this question. (25 Points) Q2a: Based on the NOIR classification (or data type) of the independent variable and the dependent variable, which statistical test do you think fits the situation most appropriately? (5 Points) A. Chi-Square Test B. t-Test 1

Q2b: What is the test formula of the correct statistical test? (5 Points) χ 2 = Σ ( Oi − Ei ) 2 Ei Where: x^2 = chi squared Oi = observed value Ei = expected value Q2c: Please report the test value based on your computation. (5 Points) Test value = 54.32 Q2d: Is the test result statistically significant? Why? (5 Points) Yes, the test result is statistically significant because the value is higher than the critical value. Q2e: Was the advertising campaign effective? (5 Points) Yes, the advertising campaign was effective because the ad did positively affect the purchases. Q3: In A/B testing and other field experiments, it is important to design the right sample size. (25 Points) Q3a: If Rocket Fuel had reduced the size of the existing control group by 50%, do you see any potential issues? Yes . (3 Points) If your answer is yes, describe the potential issue(s) in no more than 30 words. (5 Points) If Rocket Fuel had reduced the size of the existing control group by 50%, the group could become too small which would negatively affect the outcome of the study which would make it less effective. Q3b: If Rocket Fuel had increased the size of the existing control group by 50%, do you see any potential issues? Yes . (3 Points) If your answer is yes, describe the potential issue(s) in no more than 30 words. (5 Points) If Rocket Fuel had increased the size of the existing control group by 50%, the group could become too big which would negatively affect the outcome of the study which would make it less effective because of too much data and opinions. 2

Q3c: If Rocket Fuel had run the trial campaign from November 2015 to December 2015, do you see any potential issues? Yes . (3 Points) If your answer is yes, describe the potential issue(s) in no more than 50 words. (6 Points) Yes, there would be issues because that would only provide a month of data versus a full year. This month is also a holiday season which would alter the data you will receive versus any other normal month or years’ worth of data. Q4: Assume that TaskaBella now would like to run another A/B testing. In this A/B testing, TaskaBella would like to figure out whether they should adjust the image of their advertisement campaign. Their current image is the following. (25 Points) In the A/B testing, they want to know whether removing the three bags on the left of the image, as shown in the following image, will convert more people to purchase the handbag. 3

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