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Managing Ashland MultiComm ServicesThe Ashland MultiComm Services (AMS) marketing department wants to increase subscriptions for its...

Managing Ashland MultiComm ServicesThe Ashland MultiComm Services (AMS) marketing department wants to increase subscriptions for its 3-For-All telephone, cable, and Internet combined service. AMS marketing has been conducting an aggressive direct-marketing campaign that includes postal and electronic mailings and telephone solicitations. Feedback from these efforts indicates that including premium channels in this combined service is a very important factor for both current and prospective subscribers. After several brainstorming sessions, the marketing department has decided to add premium cable channels as a no-cost benefit of subscribing to the 3-For-All service.The research director, Mona Fields, is planning to conduct a survey among prospective customers to determine how many premium channels need to be added to the 3-For-All service in order to generate a subscription to the service. Based on past campaigns and on industry-wide data, she estimates the following:

Number of Free Premium Channels Probability of Subscriptions 00.021

0.042

0.063

0.074

0.085

0.085

2. Instead of offering no premium free channels as in Problem 1, suppose that two free premium channels are included in the 3-For-All service offer. Given past results, what is the probability that

a. fewer than 3 customers will subscribe to the 3-For-All service offer?

b. 0 customers or 1 customer will subscribe to the 3-For-All service offer?

c. more than 4 customers will subscribe to the 3-For-All service offer?

d. Compare the results of (a) through (c) to those of 1.

e. Suppose that in the actual survey of 50 prospective customers, 6 customers subscribe to the 3-For-All service offer. What does this tell you about the previous estimate of the proportion of customers who would subscribe to the 3-For-All service offer?

f. What do the results in (e) tell you about the effect of offering free premium channels on the likelihood of obtaining subscriptions to the 3-For-All service?

3. Suppose that additional surveys of 50 prospective customers were conducted in which the number of free premium channels was varied. The results were as follows:

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orchestra answered 2 years ago
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