Question

A toy company is concerned that its distribution strategy is not working. Sean Masterson, the marketing manager stated that one of the primary goals in the distribution of a particular toy is to keep the prices similar throughout all their distribution channels. To find out if their strategy is failing, the marketing department took a survey of 5 different outlets in three different channels. The price results are in the following table:

Store	Web sales	Discount stores	Department stores
1	13	15	16
2	16	17	17
3	14	14	16
4	18	18	17
5	15	17	16

Using ANOVA, determine if there is a significant difference in prices between the three channels. Mr. Masterson wants to be 90% confident, so list all the steps of the hypothesis test and do the calculations then write a memorandum to Mr. Masterson stating your conclusion and backing it up with statistical analysis.

Answer 1

To test of there is a significant difference in prices between the three channels,

P-value = 0.423 > 0.10, so we fail to reject H₀ at 10% level of significance and we can conclude that there is no significant difference in prices between the three channels.