Target: Deciding on the Number of Telephone Numbers
Target is a major retail store chain specializing in good quality merchandise and good values for its customers. Currently, Target operates about 1,700 stores, including more than 200 "Super Targets," in major metropolitan areas in 48 states. One of the core marketing strategies employed by Target is to ensure that shoppers have a special experience every time they shop at Target. This special shopping experience is enhanced by Target's "intuitive" department arrangements. For example, toys are next to sporting goods. Another shopping experience feature is the "racetrack" or extra wide center aisle that helps shoppers navigate the store easily and quickly. A third feature is the aesthetic appearance of its shelves, product displays, and seasonal specials.
Naturally, Target continuously monitors the opinions and satisfaction levels of its customers because competitors are constantly trying to outperform Target and/or customer preferences change. Target management has committed to an annual survey of 1,000 customers to determine these very issues and to provide for a constant tracking and forecasting system of customers' opinions. The survey will include customers of Target's competitors such as Walmart, Kmart, and Sears. In other words, the population under study is all consumers who shop in mass merchandise stores in Target's geographic markets.
The marketing research project director has decided on the use of a telephone survey to be conducted by a national telephone survey data collection company, and he is currently working with Survey Sampling, Inc., to purchase the telephone numbers of consumers residing in Target's metropolitan target markets. SSI personnel have informed him of the basic formula they use to determine the number of telephone numbers needed. (You learned about this formula in the chapter-opening vignette featuring Jessica Smith.)
The formula is as follows:
where working phone rate = percent of telephone numbers that are "live"
incidence = percentage of those reached that will take part in the survey
completion rate = percentage of those willing to take part in the survey that actually complete the survey
As a matter of convenience, Target identifies four different regions that are roughly equal in sales volume: North, South, East, and West.
1. With a desired final sample size of 250 for each region, what is the lowest total number of telephone numbers that should be purchased for each region?
2. With a desired final sample size of 250 for each region, what is the highest total number of telephone numbers that should be purchased for each region?
3. What is the lowest and highest total number of telephone numbers to be purchased for the entire survey?
