## Practice Quiz 1 on Designing Experiments

### 1. Why is it challenging to evaluate marketing options?

There are so many factors that influence outcomes that are impossible to anticipate.

Marketing usually occurs in isolation

Test market results are unreliable.

It’s hard to confuse correlation and causation.Correct

### 2. Which of the following factors is required to establish causality?

Change marketing mix –> change time sequence

Change marketing –> change sales

Change sales –> increased marketing

Change sales –> change marketingCorrect

### 3. If you’re implementing a before-after experiment, which of the following would you do first?

Calculate sales lift, adjusting for any differences between the test and control group.

Calculate sales in both the test and control group given existing advertising.

Show the test group the new advertising and the control group the old advertising.

Select 1000 customers with similar characteristics or in similar geographic areas.Correct

## Practice Quiz 2 on Calculating Break Even and Lift

### 1. In an advertising experiment using before-after design, 1000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2 of the experiment, groups 2 and 3 see the new ad while group 1 (the control) is still shown the old ad.

 Control Group 1 Test Group 2 Test Group 3 Round 1 sales–old ad 295 310 300 Round 2 sales–Group 1, old ad, Groups 2 and 3, new ad 310 450 325

What is the sales lift (in units) for the new ad shown to Group 3?

5

25

15

10

### 2. What is the manufacturer contribution margin (\$)?

 Retail price \$100 Retail margin 30% Manufacturer contribution margin 42%

\$12.60

\$70.00

\$29.40

\$30.00

### 3. A “Mom & Pop” startup wants to increase brand awareness of their delicious hot sauce. How many bottle of hot sauce do they need to sell to break even on the ad campaign?

 Ad budget \$25,000 Retail price \$4.50/bottle Retail margin 45% Manufacturer contribution margin 30%

41,152

33,670

5,556

14,430

123.8%

19.2%

103.4%

20.4%

## Practice Quiz 3 on Projecting Lift

396,825

2,000,000

9

5.04

180%

80%

20%

120%

### 3. Calculate December unit sales of a new toy based on the following data from a product launch test in June.

 Test market units sold 250 Control % of national sales 20% Retailer share of product sales 35% Test % of annual sales 7% December % of annual sales 40%

3,571

1,250

51,020

20,408

## Week 4: Marketing Experiments Quiz

### 1. Why is it challenging to evaluate marketing options?

1. It is hard to measure return on investment.
2. Marketing decisions are usually made in isolation
3. Chief marketing officers and chief financial officers don’t see things the same way.
4. Marketing managers often have different opinions about the impact of alternative marketing options.
5. Why is it challenging to evaluate marketing options ?

### 2.Which of the following factors is required to establish causality?

Sales increase.

A competitor increased their price by the same amount as your brand.

Sales decrease.

When no changes occur in the marketing mix there is no change in sales.

2. Which of the following factors is required to establish causality?

### 3. If you’re implementing a before-after experiment, which of the following would you do first?

Show the test group the new advertising and the control group the old advertising.

Calculate sales lift, adjusting for any differences between the test and control group.

Calculate sales in both the test and control group given existing advertising.

Expose both the test and control group to the old advertising.

3. If you’re implementing a before-after experiment, which of the following would you do last?

### 4. In an advertising experiment using before-after design, 3000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2, new advertisements are shown to groups 2 and 3, while group 1 continues to see the old ads.

 Control Group 1 Test Group 2 Test Group 3 Round 1–old ad 650 695 680 Round 2–Group 1, old ad, Groups 2 and 3, new ad 630 660 740

What is the sales lift (in units) for the new ad shown to group 2?

15

35

-35

30

4. In an advertising experiment using before-after design, 3000 customers are randomly assigned to 3 groups. All groups are exposed to the existing advertisement for round 1 of the experiment. In round 2, new advertisements are shown to groups 2 and 3, while group 1 continues to see the old ads.

### 5. What is the manufacturer contribution margin (\$)?

 Retail price \$40 Retail margin 35% Manufacturer contribution margin 40%

\$14

\$10.40

\$26

\$5.60

5. What is the manufacturer contribution margin (\$)?

### 6. A sporting goods manufacturer is considering increasing advertising for its running shoes by \$3 million.

How many additional pairs of shoes must be sold to break even on the increase in advertising spending?

 Manufacturer selling price \$30 Contribution margin 60%

50,000

1,800,000

100,000

166,667

6. A manufacturer is considering increasing advertising spending by \$4.5 million

250,000

### 7. Calculate net lift given the following information:

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99.90%

97.60%

-2.40%

17.40%

7. Calculate net lift given the following information:

1,280

10,000,000

13950

7812

### 9. Alexander Graham Crackers is studying the impact of a social media campaign for their Smorgasbords product line. Without social media, their sales in May were 120,000 boxes. With social media, sales in June rose to 160,000 boxes. Historically, May represents 10% of their annual sales and June represents 12%.

What is the lift for their social media campaign?

33%

133%

111%

11%

### 10. Project unit sales based on the following data from a product launch test in April in the southeast sales region.

 Test market units sold 500 Test % of the population 10% Retailer share of product sales in the SE 20% Test % of annual sales 5% Retailer share of market nationally 60%

15,000

300,000

100,000

500,000

77,778