proportion of people in its who are aware of the new brand. As part of a larger
market research study, it was found that in a sample of 125 randomly selected individuals from the
target market segment, 84 individuals were aware of the firms new brand.
a. Construct a 95% confidence interval for the proportion of individuals in the target market segment
who are aware of the firms new brand. If you use Excel and/or StatTools, please specify any functions
you use and all the inputs.
b. The manager in charge of the new brand has stated that the brand awareness is greater than .75,
meaning that more than 75% of the population is aware of the brand. He would like to use hypothesis
testing to prove his claim. At the 5% significance level, conduct a hypothesis test with the goal of proving
his claim. In particular
i) specify the null hypothesis and the alternative hypothesis,
ii) state whether you are using a one- or two-tailed test,
iii) specify the p-value of the test, and
iv) provide the results of the test in plain English.
Hints: 1) Think carefully about what is the null hypothesis, and what is the alternative. 2) If you want to
use StatTools for the analysis, you need to create the survey data in Excel first; then you can run the
For future polls, the firm is interested in minimizing their marketing-research costs. The margin of error
(MOE) in their pools should be no larger than B (i.e., ). To simplify the analysis,
we will assume their marketing study only has a single question that is used to estimate p, at the 5%
a. If the firm had no prior knowledge of p, how large would the sample size have to be to ensure MOE
B? (Hint: your answer will be a ).
b. The firm has prior knowledge that p will likely be somewhere between .10 and .20 (that is between
10% and 20%). How large should the sample be if they would like to ensure that MOE (=B) is no larger
than 0.01 or 1%?