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Assignment 2

# Assignment 2 - MKT 460 Spring 2010 Individual Assignment 2...

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MKT 460 Spring 2010 Individual Assignment 2 What Happens When Wal-Mart Comes to Town? (Due Date: 24 nd March, 2011) Please paste all the answers within this word file and upload it Blackboard by the due date. (Maximum possible points: 120) You have been hired as a consultant for a major local grocery store. Store management is worried since Wal-Mart has entered the market by opening a "Wal-Mart Super-center" only 3 miles away from the local store. Management is interested in analyzing the impact on store sales of the Wal-Mart entry and whether or not a new strategy is required. For analysis, management has given you access to one hundred weeks of sales data for the local store covering the period both pre- and post-entry of Wal-Mart. Look at the data in Data Assignment 2.xls. It has the following variables: WEEK  Week number  Sales   weekly sales Promotion Index Index of weekly promotion activity –higher promotion index indicates more products on promotion  in the store Walmart Walmart dummy = 1 in the weeks after the Walmart opens, and 0 in the weeks before the  Walmart opens Feature Advertising Index Index of feature advertising activity – higher feature advertising index indicates more feature  advertising Holiday  Holiday Dummy = 1 during major holiday weeks, and 0 for non-holiday weeks

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Part 1. Estimate the following regression model: Create the appropriate variables. (10 points) log(sales) = α + β 1 log(promotion index) + β 2 WalMart Paste results here. StatTools Report Analysis: Regression Performed By: May Date: Thursday, March 24, 2011 Updating: Static Multiple R-Square Adjusted StErr of Summary R R-Square Estimate 0.6434 0.4140 0.4019 0.229788329 Degrees of Sum of Mean of F-Ratio p-Value ANOVA Table Freedom Squares Squares Explained 2 3.617839864 1.808919932 34.2581 < 0.0001 Unexplained 97 5.121859608 0.052802676 Coefficient Standard t-Value p-Value
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