A large consumer goods company ran a television advertisement for one of its soap prod- ucts. On the basis of a survey that was conducted, probabilities were assigned to the fol- lowing events. B = individual purchased the product S = individual recalls seeing the advertisement BNS = individual purchased the product and recalls seeing the advertisement The probabilities assigned were P(B) = .20, P(S) = .40, and P(B N S) = .12. What is the probability of an individual's purchasing the product given that the in- dividual recalls seeing the advertisement? Does seeing the advertisement increase а. the probability that the individual will purchase the product? As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)? b. Assume that individuals who do not purchase the company’s soap product buy from its competitors. What would be your estimate of the company’s market share? Would you expect that continuing the advertisement will increase the company's market share? Why or why not? The company also tested another advertisement and assigned it values of P(S) = .30 and P(B N S) = .10. What is P(B | S) for this other advertisement? Which advertise- ment seems to have had the bigger effect on customer purchases? с.

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A large consumer goods company ran a television advertisement for one of its soap prod-
ucts. On the basis of a survey that was conducted, probabilities were assigned to the fol-
lowing events.
B = individual purchased the product
S = individual recalls seeing the advertisement
BNS = individual purchased the product and recalls seeing the advertisement
The probabilities assigned were P(B) = .20, P(S) = .40, and P(B N S) = .12.
What is the probability of an individual's purchasing the product given that the in-
dividual recalls seeing the advertisement? Does seeing the advertisement increase
а.
the probability that the individual will purchase the product? As a decision maker,
would you recommend continuing the advertisement (assuming that the cost is
reasonable)?
b. Assume that individuals who do not purchase the company’s soap product buy from its
competitors. What would be your estimate of the company’s market share? Would you
expect that continuing the advertisement will increase the company's market share?
Why or why not?
The company also tested another advertisement and assigned it values of P(S) = .30
and P(B N S) = .10. What is P(B | S) for this other advertisement? Which advertise-
ment seems to have had the bigger effect on customer purchases?
с.
Transcribed Image Text:A large consumer goods company ran a television advertisement for one of its soap prod- ucts. On the basis of a survey that was conducted, probabilities were assigned to the fol- lowing events. B = individual purchased the product S = individual recalls seeing the advertisement BNS = individual purchased the product and recalls seeing the advertisement The probabilities assigned were P(B) = .20, P(S) = .40, and P(B N S) = .12. What is the probability of an individual's purchasing the product given that the in- dividual recalls seeing the advertisement? Does seeing the advertisement increase а. the probability that the individual will purchase the product? As a decision maker, would you recommend continuing the advertisement (assuming that the cost is reasonable)? b. Assume that individuals who do not purchase the company’s soap product buy from its competitors. What would be your estimate of the company’s market share? Would you expect that continuing the advertisement will increase the company's market share? Why or why not? The company also tested another advertisement and assigned it values of P(S) = .30 and P(B N S) = .10. What is P(B | S) for this other advertisement? Which advertise- ment seems to have had the bigger effect on customer purchases? с.
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