Case Study for GoodBelly Probiotic Drinks
Suppose you are the intern Caroline Dickerson. You are charged to conduct a data analysis on the effectiveness of different promotion strategies for GoodBelly Probiotic Drinks. Please answer the following questions.
1. Please summarize in your own words what problem GoodBelly is facing?
2. Develop a correlation matrix to examine the correlation between sales and other different variables.
3. Propose and estimate a regression model to predict store sales. Discuss whether the multi-collinearity exists in your model based on the correlation matrix developed in Q2.
4. Check the overall fitness of your model through R-square, adjusted R-square, and F-test. Based on these statistics, what percentage of variation in sales is explained by your model? Does the model provide significant explaining power in sales? What are the important predictors of store sales based on your model?
5. Answer the following managerial questions based on your model estimation results. Please use your model estimation results to back up your answers.
a. Does the in-store demonstration boost the sales? Is the boost in sales only temporary or does it last for longer?
b. Does having a dedicated sales representative help in boosting the sales? If yes, by how much?
c. Does the end-cap promotion boost sales? If yes, by how much?
d. Can you infer anything about the price elasticity of demand? Note: price elasticity is defined as how much demand could changes as price changes by one unit.
e. Do geographic locational attributes (i.e., Natural Retailers, Fitness Centers) play a role in determining GoodBelly sales? What is the implication of this result on the target custom of GoodBelly probiotic drinks?