Case Problem Smart Phone Preferences Technology companies co

Case Problem: Smart Phone Preferences

Technology companies compete to put their products in the hands of consumers. A main point of competition is the market for smart \\phones, phones capable of acting like a small computer complete with spreadsheets, daily planners, address books, and of course, games. Major competitors include the iPhone, Samsung and Blackberry and various other phones using Google Android and Microsoft Windows operating systems. To keep up with the market, media watch companies such as Nielsen watch for trends and collect large surveys of consumer preferences. A survey of about 9,000 consumers in late 2012 produced the following contingency table. This table gives a range for the age of the consumer in the survey and show’s each consumer’s next desired smart phone preference.

Table 1

Contingency Table of Age and Brand Preference

Age (Years)

Stated preference

Apple

Android

Blackberry

Windows

Other

Unsure

18 – 24

991

883

304

102

146

337

25 – 34

807

754

324

159

119

367

35 – 54

593

618

307

151

74

512

55 +

437

336

200

171

50

460

Motivation

1. What it would it mean to find dependence between the age and stated preference?

2. Why would a company such as Apple or RIM to be interested in knowing whether the preference for their phone depends on the consumer’s age?

Method

3. Verify that the data meets the condition for Chi squared test for independence.

[Hint: You need to verify that variables are categorical and expected frequencies are large (> 5)]

4. What problem is likely, if the survey had about only 500 consumers?

Mechanics

5. Perform the statistical test procedure. Compute the test statistic and its p value. Write down your inference.

Message

6. Show a plot (clustered bar chart) that summarizes the results of the test that emphasizes the different brand preferences within age groups.

7. Summarize the implications of the test and data.

Age (Years)	Stated preference
Apple	Android	Blackberry	Windows	Other	Unsure
18 – 24	991	883	304	102	146	337
25 – 34	807	754	324	159	119	367
35 – 54	593	618	307	151	74	512
55 +	437	336	200	171	50	460

Solution