GoodBelly: Using Statistics to Justify the Marketing Expense

by: Hyun-Soo Ahn, Caroline Dickerson

Publication Date: July 10, 2012
Length: 6 pages
Product ID#: 1-429-252

Core Disciplines: Operations Management/Supply Chain

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Description

GoodBelly is trying to boost its sales at grocery stores like Whole Foods Market. As a small start-up, GoodBelly must optimize the allocation of its limited marketing budget. It currently promotes through in-person demonstrations in stores, but management is concerned that these demonstrations are not effective enough to justify the cost. It is up to GoodBelly’s student intern, Caroline Dickerson, to evaluate its promotional programs using statistical evidence.

Dickerson will need to apply regression analysis to sales data to determine whether or not the company should continue its promotional programs.

Teaching Objectives

After reading and discussing the material, students should:

  • Build and select a regression model.
  • Use dummy variables.
  • Interpret statistical output to generate managerial recommendations.
  • Use regression as a prediction device.
  • Learn the limitations of Microsoft Excel’s statistical package.
  • Evaluate and choose alternative statistical models.