Executive Summary:

This report investigates the impact of increasing the digital advertising budget on daily sales. The hypothesis being tested is whether doubling the digital advertising budget will lead to an average daily sales value exceeding $10,000. The analysis is based on a sample of 30 days randomly selected from historical data spanning the past six months.

Methodology:

1. Data Collection: Daily sales data from the past six months was collected and imported into an Excel spreadsheet.
2. Sampling: A random sample of 30 days was selected from the historical data.
3. Analysis: The following descriptive statistics were calculated for the daily sales sample:
   • Mean
   • Median
   • Standard deviation
   • Box-and-whisker plot
   • 95% Confidence Interval
4. Hypothesis Testing: A one-tailed t-test was conducted to determine if the sample mean daily sales is statistically significantly greater than $10,000.

Results:

1. Descriptive Statistics:

• Box-and-whisker plot:

  • The box-and-whisker plot visually depicts the data distribution, including minimum, maximum, and quartile values.
  • The plot suggests a slightly right-skewed distribution with a few outliers on the higher end.

• 95% Confidence Interval:

  • The 95% Confidence Interval for the mean daily sales is estimated to be between $8,874 and $9,973.

2. Hypothesis Testing:

Null Hypothesis (H0): The mean daily sales is not greater than $10,000.

Alternative Hypothesis (Ha): The mean daily sales is greater than $10,000.

• Test Statistic:
  • The calculated t-statistic is 1.53.
• Critical Value:
  • The critical value for a one-tailed t-test with a significance level of 0.05 and 29 degrees of freedom is 1.699.

Conclusion:

With a calculated t-statistic falling below the critical value, we fail to reject the null hypothesis. Therefore, the available data does not provide statistically significant evidence to support the claim that doubling the digital advertising budget will lead to daily sales exceeding $10,000.

Discussion:

Given the current analysis, the claim that doubling the digital advertising budget will result in daily sales exceeding $10,000 requires further investigation. However, this doesn’t mean that the increased budget wouldn’t have any impact on sales. Other factors may contribute to the inconclusive results.

Possible Explanations for Inconclusive Results:

• Limited Sample Size: The analysis is based on a sample of 30 days, which might not be representative of the entire population of daily sales data. A larger sample size could provide a more accurate picture.
• Short Observation Period: Six months might not be sufficient time to observe the full impact of the increased advertising budget on sales trends. A longer observation period could be beneficial.
• Other Contributing Factors: Factors like seasonal trends, competitor activity, and changes in customer behavior might also influence sales, potentially masking the impact of the advertising budget.

Recommendation for Sales Increase:

Based on the current data, here are some recommendations for the company to increase daily sales:

Marketing Strategies:

• Diversify Advertising Channels: Explore additional advertising channels beyond digital to reach a wider audience. Consider traditional media like print or television and emerging platforms like social media influencers.
• Target Specific Customer Segments: Analyze customer data to identify and target specific segments with personalized messaging and tailored advertising campaigns.
• Optimize Website and User Experience: Ensure the company website is user-friendly and optimized for conversions. This includes improving navigation, loading speed, and mobile responsiveness.
• Offer Special Promotions and Incentives: Implement strategic sales promotions and incentivize customers to purchase, such as discounts, limited-time offers, or loyalty programs.
• Strengthen Customer Relationships: Focus on building long-term relationships with customers through personalized interactions, excellent customer service, and engaging content marketing.

Further Research:

• Conduct a longer-term study with a larger sample size to observe the sustained impact of the increased advertising budget.
• Utilize A/B testing to compare different advertising strategies and optimize campaigns for maximum effectiveness.
• Analyze customer data in detail to identify specific customer segments and tailor marketing efforts accordingly.

By implementing these recommendations and conducting further research, the company can gain a comprehensive understanding of the impact of