Pelican stores case study solution

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Statistics for Business & Economics (12th Edition) See this solution in the app

Problem

Pelican Stores

Pelican Stores, a division of National Clothing, is a chain of women’s apparel stores operating throughout the country. The chain recently ran a promotion in which discount coupons were sent to customers of other National Clothing stores. Data collected for a sample of 100 in-store credit card transactions at Pelican Stores during one day while the promotion was running are contained in the file named PelicanStores. Table 2.19 shows a portion of the data set. The Proprietary Card method of payment refers to charges made using a National Clothing charge card. Customers who made a purchase using a discount coupon are referred to as promotional customers and customers who made a purchase but did not use a discount coupon are referred to as regular customers. Because the promotional coupons were not sent to regular Pelican Stores customers, management considers the sales made to people presenting the promotional coupons as sales it would not otherwise make. Of course, Pelican also hopes that the promotional customers will continue to shop at its stores.

TABLE 2.19 DATAFOR ASAMPLE OF 100 CREDIT CARD PURCHASES AT PELICAN STORES

Most of the variables shown in Table 2.19 are self-explanatory, but two of the variables require some clarification.

Pelican’s management would like to use this sample data to learn about its customer base and to evaluate the promotion involving discount coupons.

Managerial Report

Use the tabular and graphical methods of descriptive statistics to help management develop a customer profile and to evaluate the promotional campaign. At a minimum, your report should include the following:

1. Percent frequency distribution for key variables.

2. A bar chart or pie chart showing the number of customer purchases attributable to the method of payment.

3. A crosstabulation of type of customer (regular or promotional) versus net sales. Comment on any similarities or differences present.

4. A scatter diagram to explore the relationship between net sales and customer age.

Step-by-step solution

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1)

Consider the case of Pelican stores which is a division of National Clothing. A promotional discount coupon is given to customers. Data of 100 customers was collected. Part of the data is shown below:

The percentage frequency distribution of key variables in Excel is obtained as follows:

STEP 1: Select all the cells of key variable.

STEP 2: Click Insert PivotTable Pivot Table.

STEP 3: Table range is already selected. Select Existing worksheet. Enter any random cell K1. The screenshot is shown below:

Comment

STEP 4: Click ok. In right hand pane, tick “Type of customer”. Drag “Type of customer” to “Row Labels” and “Values”. The screenshot is shown below:

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Comment

STEP 5: Frequency distribution is obtained as follows:

For data with numeric value Items, right click on pivot table and select “Group by”.

Comments (1)

In the pop up, enter data as follows:

Frequency distribution for Items and Method of Payment is obtained as follows:

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For the above output for the given data, observe that 70% users are Promotional users. Also 85% customers buy 1-5 items. Also as many as 70% customers use Propriety card.

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2)

Bar chart of Method of payments is obtained as follows:

STEP 1: Click Insert Charts Columns in Excel.

STEP 2: Select First Column chart.

STEP 3: In the displayed blank chart, right click and click ‘select data’.

STEP 4: In Chart Data Range, enter frequency distribution table for ‘Method of Payments’.

STEP 5: Bar chart showing the number of customer purchases attributable to the method of payment is obtained as follows:

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Comment

3)

A cross tabulation between Type of customers and net sales is obtained as follows:

STEP 1: Click Insert Pivot Table Pivot table.

STEP 2: In the pop-up window enter columns B1:D101. Click Existing worksheet. Enter preferred location. Click OK. Screenshot is shown below:

Comment

Comment

STEP 3: In the left pane tick ‘Type of customers’ and ‘Net Sales’. Drag “Net sales” to “column Labels”, and “Values”. Drag “Type of customers” to Row labels.

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STEP 4: Hover Mouse over columns. Right click and click ‘Group’. In the popup, enter values as shown in the below screenshot. Click ok in the below screenshot.

STEP 5: Result cross tabulation is obtained as shown below:

The cross tabulation gives the data of sales under each category. Sales of Regular customers is lesser than sales of Promotional customers. Highest sales are done by promotional customers in the category 50 to 100 dollars.

Comment

4)

Scatter plot showing relation between net sales and customer age is shown below:

STEP 1: Click Insert Charts XY scatter. Select first option and click ok.

STEP 2: In the empty chart right click and click ‘Select Data’.

STEP 3: In the pop-up window enter H1:H101.

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STEP 4: Click Edit. In the pop up window, enter data range as shown below:

STEP 5: Click ok.

The Scatter plot of the relationship between the net sales and customer age is obtained as follows:

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