Suppose you have been asked by a food company to design an experiment that examines consumers’ purchase intentions toward their product (i.e., cereals), as a result of their recent pricing strategies (i.e., low price, high price) and product quality (i.e., organic offerings, nonorganic offerings) strategies. Basically, they would like to know the best combination of product quality offering and pricing strategy that yields the highest levels of consumers’ purchase intentions. How would this experiment look like? When working on this assignment, you should consider the following: Subjects: The experiment participants should be customers who consume significant breakfast cereals and are diverse in terms of income group, age group and work type. Experimental conditions: Independent variables – quality (categorical), price Dependent variable – Propensity to pay Effects: The main effect shall be impact of independent variables on propensity to pay such as how much affect does quality or price have on propensity to pay. Interaction effect will be affect of interaction among two or more independent variables on the dependent variable, such as .. does affect of quality on propensity to pay depend on the price of the product. The interaction effect can help us determine the combination of price and quality that has the highest likelihood to be purchased 1. Based on the interaction effects, what could you conclude/identify (hypothetically)? 2. How will you be able to figure out if the purchase intentions for one combination/cell are higher/lower than the other combinations/cells?
Suppose you have been asked by a food company to design an experiment that examines consumers’ purchase intentions toward their product (i.e., cereals), as a result of their recent pricing strategies (i.e., low price, high price) and product quality (i.e., organic offerings, nonorganic offerings) strategies. Basically, they would like to know the best combination of product quality offering and pricing strategy that yields the highest levels of consumers’ purchase intentions. How would this experiment look like?
When working on this assignment, you should consider the following:
Subjects: The experiment participants should be customers who consume significant breakfast cereals and are diverse in terms of income group, age group and work type.
Experimental conditions:
Independent variables – quality (categorical), price
Dependent variable – Propensity to pay
Effects: The main effect shall be impact of independent variables on propensity to pay such as how much affect does quality or price have on propensity to pay. Interaction effect will be affect of interaction among two or more independent variables on the dependent variable, such as .. does affect of quality on propensity to pay depend on the price of the product. The interaction effect can help us determine the combination of price and quality that has the highest likelihood to be purchased
1. Based on the interaction effects, what could you conclude/identify (hypothetically)?
2. How will you be able to figure out if the purchase intentions for one combination/cell are higher/lower than the other combinations/cells?
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