Statistics for Management, Fall 2014

Instructor: Dr. Khamooshi

Group Assignment #1: Pelican Stores Case Study
Due Date: 9/9/2014
Kandis Porter and Aatika Tajik

I am satisfied that the contribution made by each team member warrants a full share of the
credit for this work, and I affirm that I have completed this assignment in accordance with the
Code of Academic Integrity.
//Signed, September 9, 2014//
Kandis M. Porter

//Signed, September 9, 2014//

Aatika Tajik

Executive Summary
The promotional campaign ran by Pelican Stores turned out to be a success. The goal of the
campaign was for Pelicans management to learn about its customer base and evaluate the
promotion involving discount coupons. By running the promotion, Pelican realized $5,900.30 in
revenue that they would not usually have. This is 317% more sales than they would have made
during the same period without the promotion. The data collected revealed that the sales made
were 70% promotional and only 30% were regular customers. Also, 93% of the purchases were
made by females. The payment mode was 100% credit cards; however, 70% was charged to the
propriety card. Also, 84% of the sales were made by married customers, of which 80% are
females from both promotional and regular customers. More than half the customers purchased
one or two items, while 44% of the shoppers purchased three or more items. We will review the
analyzed data in greater detail below and conclude with recommendations for Pelican
management in regards to how they can best market and increase sales in the future.
Introduction
Pelican Stores is a chain of womens apparel stores operating throughout the country. It ran a
promotion in which discount coupons were sent to potential new customers. The purpose of the
promotion was to learn about its customer base and also to evaluate the promotion involving
discount coupons. Regular customers were not sent the discount coupons; hence the management
considers the sales made would not have otherwise been realized. According to the data
collected, most customers used propriety credit cards to make purchases; some used other credit
cards, but most sales were made by married female customers. Below is the analysis of the full
data collected.

Main Body
To ensure Pelican Management can easily interpret the data, statistics are displayed in the form
of Percent Frequency, Bar Charts, Cross Tabulation, and Scatter Diagrams. Better understanding
of the relationship between promotional activities and sales have proven helpful in establishing
future marketing strategies for the various products (Anderson, Sweeney, & Williams, 2012).

1. Percent frequency distribution for key variables.

In order to begin to understand the data received by Pelican during the promotional sale,
analysis was accomplished to determine the relative frequency and percent frequency
distribution for key variables. As can be seen from Table 1.1 below, the payment mode was
100% credit cards; however, 70% was charged to the propriety card versus another form of
credit card (e.g., Discover, MasterCard, Visa, or American Express). Table 1.2 shows that of
the purchases made, 93% of them were made by females versus males. Table 1.3 indicates
that 70% of sales were made by Promotional customers and 30% made by customers. Table
1.4 depicts that 56% of the customers purchased one or two items, while 44% of the shoppers
purchased three or more items. Lastly, table 1.5 indicates that 84% of the customers were
married.
Table 1.1: Percent Frequency for Payment Type

Payment

Frequency

Relative
Frequency

Percent
Frequency

Table 1.2: Percent Frequency of Purchases Made by Male vs Female

Gender

Relative
Percent
Frequency Frequency Frequency

Table 1.3: Percent Frequency of Purchases Made by Regular vs Promotional Customers

Type of
Customer

Relative
Percent
Frequency Frequency Frequency

Table 1.4: Percent frequency for Number of Items Purchased

Items
Relative
Percent
Purchased Frequency Frequency Frequency

Marital Status

Relative
Percent
Frequency Frequency Frequency

2. A bar chart or pie chart showing the number of customer purchases attributable to
the method of payment.
Figure 2.1 shows the bar chart for the categorical data summarized in a frequency,
relative frequency or percent frequency distribution. As we can see, 70% of the
customers paid using propriety card, 14% used MasterCard, 10% used Visa, 4% used
Discover and only 2% used American Express. In Figure 2.2, the number of items
purchased most is via propriety card showing the preferred method of payment. There
was a total of 322 items purchased and 234 of these were made with the proprietary card.

Figure 2.1: Number of Customer Transactions by Payment Type

Number of Customer Transactions

By Payment Type
American Express

Visa

10

Mastercard

14

Proprietary Card

70

Discover

4
0

10

20

30

40

50

60

70

80

Figure 2.2: Number of Items Purchased by Payment Type

Number of Items Purchased by

Payment Type
Visa

29

Proprietary Card

234

MasterCard

42

Discover

American Express

10
0

50

100

150

200

250

3. A cross tabulation of type of customer (regular or promotional) versus net sales.

According to Table 3.1, the net sales from promotional customers were much higher than
the regular customers. Since its a womens apparel store, married females occupied great
proportion of the net sales from promotional variable. To be precise, 58% of the
purchases were made by promotional customers that were married females and their
average age was 44 years old. Another 22% of the purchases were made by regular
customers that were married females and their average age was 44 years old. It is also
interesting to know that the average age for both promotional and regular female married
customers is 44 years old.

Also, even though very few of the regular customers were male 3% to be precise their
average age was much younger. The average age for the regular male married customers
was 32 years old and the average age for the regular male single customers was 31 years
old.
Figure 3.1: Cross Tabulation of Customer Type vs Net Sales
Row Labels
Promotional
Female

Sum of Net
Sales
$5,900.30
$5,623.40

Average of
Age
43
43

Sum of
Items
266
255

Count of
Customer
70
66

Male

$276.90

50

11

$1,859.75
$1,741.25

43
44

56
53

30
27

Male

$118.50

31

Grand Total

$7,760.05

43

322

100

Regular
Female

4. A scatter diagram to explore the relationship between net sales and customer age.
Figure 4.1: Scatter Diagram Depicting Net Sales and Customer Age

Scatter Diagram Pelican

Net
Sales

300.00
275.00
250.00
225.00
200.00
175.00
150.00
125.00
100.00
75.00
50.00
25.00
0.00
15

30

45

60

75

Age

Based on the scatter diagram above and trendline, there is no apparent relationship between age
and net sales. However, you can clearly see that a majority of the purchases were made by
customers in the 30 50 year old range. This indicates that there is a large untapped market for
customers under 30 years old and customers over 50 years old. Since we know from other data
that a majority of the customers are female, plus Pelican is a chain of womens apparel stores,
that females are more likely than males to be shopping there.

Conclusion
According to the analyzed data, the promotional campaign was a success. The largest base of
promotional/regular customers is married females with an average age of 44 years old and
combined they made up 80% of the sales. As stated above, 70% of the sales were charged on the
propriety card and the remaining 30% were charged through other credit cards.
Despite a success, the management has several opportunities to improve their marketing and
sales, now that they have additional information on their customer base. Below are several
recommendations:
1. Enhance the perks for the propriety card users, not only for promotional but regular
customers as well. In addition to the charge card, they should offer a rewards card
program to increase sales. Since a majority of the customers bought only one or two
items, they should offer a promotion that encourages buying 3 or more items for
additional coupons to spend at a future date.
2. There is a great opportunity to market to the female population under the age of 30 and
above the age of 50 years old. The management team should focus on how they may be
able to offer promotions for high school and college females to capture the sales of the
younger population. For the older population, a recommendation would be to focus on
professional attire and/or clothing that can be worn to evening events.
3. Since only 7% of the current customer base is made up by males, Pelican stores should
focus on offering a huge promotion to get them into the store to purchase gifts for their
daughters, wives, mothers, etc. A great time to launch a promotion like this would be
around Valentines Day, Mothers Day, and/or Christmas. Since the current split of male
shoppers are 57% married and 43% single, I would market to both and at all ages, since
the sample of the customers was so small in this area.
It was a wonderful idea for management to analyze their current customer base so they can
continue to market to the appropriate customers and expand their customer base to capture more
sales overall. Statistics have clearly shown where there are areas for improvement.

References
Anderson, D.R., Sweeney, D.J., and Williams, T.A. (2012). Essentials of Modern Business
Statistics with Microsoft Office Excel (5th ed.). Mason, OH: South-Western.