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How much does Advertising Impact Market Penetration?

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How much does advertising impact market penetration? To assess the impact of advertising in the tobacco industry, a study looked at the amount of money spent on advertising a particular brand of cigarettes and brand preference among adolescents and adults. The data are shown below: (Source: Center for Disease Control Website).

Brand Advertising ($ millions) % Adolescents % Adults
Marlboro 75 60 23.5
Camel 43 13.3 6.7
Newport 35 12.7 4.8
Kool 21 1.2 3.9
Winston 17 1.2 3.9
Benson & Hedges 4 1 3
Salem 3 0.3 2.5

Create scatterplots below: (do not connect the dots, but show a "line of best fit")
Adolescents Adults

a) Which variable is the independent variable?

b) Which variable is the dependent variable?

Then: with the dependent variable on the vertical (y) axis
c) Create a scatter plot of advertising and adolescent brand preference. Do you think there is a linear relationship between the two variables? Why or why not?

d) Create a scatter plot of advertising and adult brand preference. Do you think there is a linear relationship between the two variables? Why or why not?

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Solution Preview

So what is a scatter plot? It is a way for a person to see the causation (relationship) between two variables.

A scatterplot can show various kinds of relationships, including positive (rising), negative (falling), and no relationship. If the pattern of dots slopes from lower left to upper right, it suggests a positive correlation between the variables being studied. If the pattern of dots slopes from upper left to lower right, it suggests a negative correlation. A line of best fit can be drawn in ...

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