12"CASESManaging Ashland MultiComm ServicesTABLE AMS12.1Number of Subscribers Who Continue Subscriptionsafter Trial Period with Four Discount PlansPHASE 1Reviewing the results of its research, the marketing departmentteam concluded that a segment of Ashland households might beinterested in a discounted trial subscription to the AMS 3-For-AllCONTINUEDISCOUNT PLANSSUBSCRIPTIONSservice. The team decided to test various discounts before deter-AFTER TRIALNoModerate Substantial Restaurantmining the type of discount to offer during the trial period. Itdecided to conduct an experiment using three types of discountsplus a plan that offered no discount during the trial period:PERIODDiscount Discount DiscountCardTotalYes24303851143No767062492571. No discount for the 3-For-All service. Subscribers would pay$99.99 per month for the 3-For-All service during the trialperiod.Total1001001001004001. Analyze the results of the experiment. Write a report to theteam that includes your recommendation for which discountplan to use. Be prepared to discuss the limitations andassumptions of the experiment.2. Moderate discount for the 3-For-All service. Subscriberswould pay $79.99 per month for the 3-For-All service duringthe trial period.3. Substantial discount for the 3-For-All service. Subscriberswould pay $59.99 per month for the 3-For-All service duringthe trial period.PHASE 2The marketing department team discussed the results of thesurvey presented in Chapter 8, on pages 302–303. The teamrealized that the evaluation of individual questions was provid-ing only limited information. In order to further understand themarket for the 3-For-All service, the data were organized in thefollowing contingency tables:4. Discount restaurant card. Subscribers would be given a spe-cial card providing a discount of 15% at selected restaurantsin Ashland during the trial period.Each participant in the experiment was randomly assignedto a discount plan. A random sample of 100 subscribers to eachplan during the trial period was tracked to determine how manywould continue to subscribe to the 3-For-All service after theHAS AMSINTERNET SERVICEtrial period. Table AMS 12.1 summarizes the results.HAS AMSSMARTPHONEYesNoTotalYes552883No207128335Total262156418

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Managing Ashland MultiComm Services PHASE 1 TABLE AMS12.1 Number of Subscribers Who Continue Subscriptions after Trial Period with Four Discount Plans Reviewing the results of its research, the marketing department team concluded that a segment of Ashland households might be CONTINUE interested in a discounted trial subscription to the AMS 3-For-All SUBSCRIPTIONS service. The team decided to test various discounts before deter- AFTER TRIAL mining the type of discount to offer during the trial period. It PERIOD decided to conduct an experiment using three types of discounts plus a plan that offered no discount during the trial period: DISCOUNT PLANS No Moderate Substantial Restaurant Discount Discount Discount Card Total Yes 24 30 38 51 143 No 76 70 62 49 257 1. No discount for the 3-For-All service. Subscribers would pay Total $99.99 per month for the 3-For-All service during the trial period. 100 100 100 100 400 2. Moderate discount for the 3-For-All service. Subscribers would pay $79.99 per month for the 3-For-All service during 1. Analyze the results of the experiment. Write a report to the team that includes your recommendation for which discount plan to use Be prenared to discuss the limitations and

Managing Ashland MultiComm Services PHASE 1 TABLE AMS12.1 Number of Subscribers Who Continue Subscriptions after Trial Period with Four Discount Plans Reviewing the results of its research, the marketing department team concluded that a segment of Ashland households might be CONTINUE interested in a discounted trial subscription to the AMS 3-For-All SUBSCRIPTIONS service. The team decided to test various discounts before deter- AFTER TRIAL mining the type of discount to offer during the trial period. It PERIOD decided to conduct an experiment using three types of discounts plus a plan that offered no discount during the trial period: DISCOUNT PLANS No Moderate Substantial Restaurant Discount Discount Discount Card Total Yes 24 30 38 51 143 No 76 70 62 49 257 1. No discount for the 3-For-All service. Subscribers would pay Total $99.99 per month for the 3-For-All service during the trial period. 100 100 100 100 400 2. Moderate discount for the 3-For-All service. Subscribers would pay $79.99 per month for the 3-For-All service during 1. Analyze the results of the experiment. Write a report to the team that includes your recommendation for which discount plan to use Be prenared to discuss the limitations and

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 6MC

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