3.11 Answers to the Marketing Plan questions

  1. Is there a relationship between advertising budget and sales?

    Tool: Multiple regression, look at F-statistic.

  2. How strong is the relationship between advertising budget and sales?

    Tool: \(R^2\) and RSE

  3. Which media are associated with sales?

    Tool: p-values for each predictor’s t-statistic. Explored further in chapter 6.

  4. How large is the association between each medium and sales?

    Tool: Confidence intervals on \(\hat{\beta_j}\)

  5. How accurately can we predict future sales?

    Tool:: Prediction intervals for individual response, confidence intervals for average response.

  6. Is the relationship linear?

    Tool: Residual Plots

  7. Is there synergy among the advertising media?

    Tool: Interaction terms and associated p-vales.