Case Problem: Smart Phone Preferences Technology companies compete to put their
ID: 3390046 • Letter: C
Question
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
Explanation / Answer
Case Problem: Smart Phone Preferences Technology companies compete to put their
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