CardioGood Fitness is a developer of high-quality cardiovascular exercise equipm
ID: 3276142 • Letter: C
Question
CardioGood Fitness is a developer of high-quality cardiovascular exercise equipment. Its products include treadmills, fitness bikes, elliptical machines, and e-glides. CardioGood Fitness looks to increase the sales of its treadmill products and has hired The AdRight Agency, a small advertising firm, to create and implement an advertising program. The AdRight Agency plans to identify particular market segments that are most likely to buy their clients’ goods and services and then locate advertising outlets that will reach that market group. This activity includes collecting data on clients’ actual sales and on the customers who make the purchases, with the goal of determining whether there is a distinct profile of the typical customer for a particular product or service. If a distinct profile emerges, efforts are made to match that profile to advertising outlets known to reflect the particular profile, thus targeting advertising directly to high-potential customers.
CardioGood Fitness sells three different lines of treadmills. The TM195 is an entry-level treadmill. It is as dependable as other models offered by CardioGood Fitness, but with fewer programs and features. It is suitable for individuals who thrive on minimal programming and the desire for simplicity to initiate their walk or hike. The TM195 sells for $1,500.
The middle-line TM498 adds to the features of the entry-level model two user programs and up to 15% elevation upgrade. The TM498 is suitable for individuals who are walkers at a transitional stage from walking to running or midlevel runners. The TM498 sells for $1,750.
The top-of-the-line TM798 is structurally larger and heavier and has more features than the other models. Its unique features include a bright blue backlit LCD console, quick speed and incline keys, a wireless heart rate monitor with a telemetric chest strap, remote speed and incline controls, and an anatomical figure that specifies which muscles are minimally and maximally activated. This model features a nonfolding platform base that is designed to handle rigorous, frequent running; the TM798 is therefore appealing to someone who is a power walker or a runner. The selling price is $2,500.
As a first step, the market research team at AdRight is assigned the task of identifying the profile of the typical customer for each treadmill product offered by CardioGood Fitness. The market research team decides to investigate whether there are differences across the product lines with respect to customer characteristics. The team decides to collect data on individuals who purchased a treadmill at a CardioGood Fitness retail store during the prior three months.
The team decides to use both business transactional data and the results of a personal profile survey that every purchaser completes as their sources of data. The data are stored in the CardioGood Fitness file. The team identifies the following customer variables to study: product purchased, TM195, TM498, or TM798; gender; age, in years; education, in years; relationship status, single or partnered; annual household income ($); average number of times the customer plans to use the treadmill each week; average number of miles the customer expects to walk/run each
week; and self-rated fitness on an 1-to-5 ordinal scale, where 1 is poor shape and 5 is excellent shape.
In this case study, you will respond to the following questions:
1. Of the data selected by the market research team, which variables in the survey are categorical? 2. Of the data selected by the market research team, which variables in the survey are numerical? 3. Of the data selected by the market research team, which variables are discrete numerical variables? 4. Create a customer profile for each CardioGood Fitness treadmill product line by developing appropriate tables and charts. 5. Write a concise report to be presented to the management of CardioGood Fitness detailing your findings, and include your tables and charts as attachments. In your report, provide a description of each customer profile.
Explanation / Answer
1. Categorical variables refer to variables that are classified into categories. Thus, type of product purchased is one of the categorical variables as it is classified into 3 categories-TM195, TM498 and TM798. Apart from it, gender, relationship status are categorical variables.
2. Numerical variables are those variables whose values are essentially numbers. Therefore, age, education in years, annual household income, average number of times the customer plans to use the treadmill each week, averag enumber of miles the customer expects to walk/run each week, self rated fitness are numerical variables.
3. Discrete numerical variables are those variable which have numerical value as whole numbers. Thus, self rated fitness, education in years, and annual household income are discrete numerical variables.
4.
Customer name Product purchased gender age education relationship status annual household income average number of time scustomer plans to use the treadmill each week averag enumber of times customer expects to walk/run each week A TM195 M 22 11 Single $250000 8 10 B TM498 F 19 10 Single $150000 9 10 C TM798 F 25 15 Single $150000 10 10