A Beverage Distributor Wanted to Determine the Combination of Advertising $\quad$

question 31

Essay

A beverage distributor wanted to determine the combination of advertising agency (two levels) and advertising medium (three levels) that would produce the largest increase in sales per advertising dollar. Each of the advertising agencies prepared ads as required for each of the media-- newspaper, radio, and television. Twelve small towns of roughly the same size were selected for the experiment, and two each were randomly assigned to receive an advertisement prepared and transmitted by each of the six agency-medium combinations. The dollar increases in sales per advertising dollar, based on a 1-month sales period, are shown in the table. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Advertising Medium }$
$\begin{array}{l}\begin{array}{l|c|c|c} & \text { Newspaper } & \text { Radio } & \text { Television } \\\hline \text { Agency 1 } & 15.3,12.7 & 17.4,20.1 & 12.7,16.2 \\\text { Agency 2 } & 22.4,18.9 & 24.3,28.8 & 12.5,9.4\end{array}\end{array}$

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$${ }^{* *}$ ANALYSIS OF VARIANCE**
SALES
BY AGENCY
MEDIUM


$\begin{array}{lrrrrr}\text { Source of Variation } & \begin{array}{r}\text { Sum of } \\\text { Squares }\end{array} & \text { DF } & \begin{array}{l}\text { Mean } \\\text { Square }\end{array} & \text { F } & \begin{array}{r}\text { Signif } \\\text { of F }\end{array} \\\\{\text { Main Effects }} & 238.299 & 3 & 79.433 & 13.934 & .004 \\\text { AGENCY } & 39.967 & 1 & 39.967 & 7.011 & .038 \\\text { MEDIUM } & 198.332 & 2 & 99.166 & 17.395 & .003 \\\\\text { AGENCY"MEDIUM } & 77.345 & 2 & 38.672 & 6.784 & .029 \\\\\text { Explained } & 315.644 & 5 & 63.129 & 11.074 & .005 \\\text { Residual } & 34.205 & 6 & 5.701 & & \\\text { Total } & 349.849 & 11 & 31.804 & &\end{array}$
(Note: SPSS uses "Explained" instead of "Treatment" in the factorial analysis. Also, SPSS uses "Residual" instead of "Error.") Would you test the main effects factors, agency and medium, in this example? Explain why or why not.

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Definitions:

Accumulated Depreciation

The total amount of an asset's cost that has been expensed over its useful life, reflecting wear and tear or obsolescence.

Office Furniture

Items of movable equipment that are used in an office setting for functional or decorative purposes.

Documentary Evidence

Written or printed records that are used to support the transactions recorded in the accounting system.

Trial Balance

An accounting report that lists all the balances of each ledger account at a point in time to ensure that debits equal credits as part of the double-entry bookkeeping system.