An advertising company

An advertising company has a proposal to make to its customer who wants to launch a new cosmetic product.
The client is motivated by the potential profits. Therefore, the advertising company should evaluate the potential sales that each marketing strategy can
generate:
Marketing strategy 1: Advertise on the TV;
Marketing strategy 2: Advertise in TV and in supermarkets;
Marketing strategy 3: Advertise in TV, in supermarkets and via internet.
For simplicity, the demand the new cosmetic product is categorized as low, medium or high.
The table below shows how the sales the company will generate for each option depends on the level of demand in the market.
Marketing
strategy
Low sales Medium sales High sales
1 - 4 000 - 8 000 20 000
2 - 12 000 - 4 000 12 000
3 - 20 000 -12 000 4 000
It is estimated that if strategy 1 is adopted the probabilities of low, medium and high demand are 0.3, 0.4 and 0.2, respectively. For strategy 2 the respective
probabilities are 0.2, 0.4 and 0.4 while for strategy 3 they are 0.1, 0.2 and 0.7.
Determine the marketing strategy that the advertising company should recommend to its client based on expected sales. Draw the decision tree.
Exercise 3 (30 points).
You are the director of a hotel and check the level of costumer’s satisfaction with a questionnaire that the hosts answer when they leave the hotel and evaluate
with a grade (from 0 to 10) the service given. The results of the last ones are:
8.5 8 7.5 6 9 7
7.5 8.5 5 9 8 7.5
7 9 6 9.5 8.5 8.5
6.5 7.5 7.5 9 7.5 8.5
8 8.5 8 8 8 9
7 8 7 7.5 8.5 8
If the goal is to reach, at least, a grade of 8, do you think the hotel is offering a good service?
After analyzing the most common causes of customers’ unsatisfaction and their frequency:
N Complaints Frequency
1 Small rooms 3
2 Bad quality food in restaurant 30
3 Receptionists do not speak English 15
4 Too far from city center 12
5 Very old TVs in rooms 4
6 Wi-fi does not work properly 25
7 Very high prices 5
8 A/C does not work in rooms 17
a. Sort the eight causes in a Cause-and-Effect diagram.
b. Determine the most important causes and define an Action Plan for those ones