Problem: A manufacturer conducts a concept test to predict market share for a new product. The product will only be introduced if first-year market share is expected to be at least 10%.  Assume “preference” is a good predictor of market share (in other words, don’t state “people may not end up doing what they say they will in a test”).  Any market share below 10% by the end of year 1 would be disastrous for the company.  The product is tested against 2 existing, in-market products, with a sample of 200 consumers. 25 of them preferred this new product over the existing one in this test.  Should the product be introduced?

For each problem:

Step 1: State the null and alternative hypotheses

Step 2: Indicate the critical value of the appropriate statistic (and draw a picture of the distribution, showing the alpha/critical region and the critical value of the statistic – you CAN copy this from a table or online calculator)

Step 3: Calculate the test statistic/p-value.  Either one is fine.

Step 4: State the decision and conclusion. Do you retain or reject the null hypothesis? And what does that mean in terms of the problem - write a verbal conclusion that relates back to the actual problem.

Problem: A manufacturer conducts a concept test to predict market share for a new product. The product will only be introduced if first-year market share is expected to be at least 10%.  Assume “preference” is a good predictor of market share (in other words, don’t state “people may not end up doing what they say they will in a test”).  Any market share below 10% by the end of year 1 would be disastrous for the company.  The product is tested against 2 existing, in-market products, with a sample of 200 consumers. 25 of them preferred this new product over the existing one in this test.  Should the product be introduced?