PELICAN STORES

WEEK 4 CHAPTER 2 CASE STUDY

QUANTITATIVE SKILLS 53:135:502:90

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INTRODUCTION

 Pelican Stores, a division of National Clothing, recently ran a promotion in which coupons were sent to
customers of other National Clothing stores.
 Data was collected for a sample of 100 in-store credit card transactions one day that the promotion was running
 No cash transactions or additional sale dates were considered.
 High level goal for Pelican’s Management is to:
 Learn more about the customer base
 Evaluate the promotion involving discount coupons

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BACKGROUND

 The following data was captured for a sample of 100 in-store credit card transactions:

 Type of Customer (Regular or Promotional)  Gender (Male or Female)

 # of Items Purchased  Marital Status (Married or Single)
 Net Sale (Total $ Charged to the Credit Card)  Age
 Method of Payment (Store Card, or other Credit Card)

 Assumptions
 All customers that used the promotional coupons would not have otherwise shopped at Pelican Stores.
 Likewise, all customers that did NOT use a promotional coupon are considered regular customers.

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 ANALYSIS

 Analysis consists of:

 Percent Frequency of Net Sales, Age, and # of Items Purchased
 Method of Payment Analysis
 Customer Type versus Net Sales
 Customer Age versus Net Sales
 # of Items Purchased versus Average Price Per Item
 Other Factors/Results contributing to Recommendations

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PERCENT FREQUENCY OF NET SALES
Pelican Store Net Sales
Percent Frequency Table
45
Relative Percent
Net Sales ($) Frequency 40
Frequency Frequency
0-49.99 39 0.39 39
35
50-99.99 35 0.35 35
100-149.99 16 0.16 16 30

Perent Frequency (%)

150-199.99 6 0.06 6
200-249.99 1 0.01 1 25
250-299.99 3 0.03 3
Total: 100 1 100 20

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Summary:
10
The data is highly skewed right, meaning
a majority of the customers spent either 5

between $0 and $50 (39%) or between 0

0-49.99 50-99.99 100-149.99 150-199.99 200-249.99 250-299.99
$50 and $100 (35%). No customers out Net Sales ($)
of the sample set spent more than $300. 5
PERCENT FREQUENCY OF AGE

Percent Frequency Table Pelican Store Customer Ages

Relative Percent 35
Net Sales ($) Frequency
Frequency Frequency
20-29 10 0.1 10 30
30-39 30 0.3 30
40-49 33 0.33 33 25
50-59 16 0.16 16

Percent Frequency (%)

60-69 7 0.07 7
20
70-79 4 0.04 4
Total: 100 1 100
15

Summary: 10

The data is slightly skewed right, but 5

bell curved, with a peak customer age
between 40 and 49 years 0
20-29 30-39 40-49 50-59 60-69 70-79
(representing 33% of the sampled Age (years)
customers). 6
PERCENT FREQUENCY OF ITEMS PURCHASED

Percent Frequency Table

Pelican Stores - Total Items Purchased Per Customer
Net Sales Relative Percent 70
Frequency
($) Frequency Frequency
1-3 66 0.66 66 60
4-6 26 0.26 26
7-9 5 0.05 5 50

Percent Frequency (%)

10-12 1 0.01 1
13-15 1 0.01 1 40
16-18 1 0.01 1
Total: 100 1 100 30

Summary: 20

The data is highly skewed right, with a 10

majority of customers (66%)
purchasing only 1, 2, or 3 items. 0
1-3 4-6 7-9 10-12 13-15 16-18
Items Purchased (EA)
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METHOD OF PAYMENT

Method of Payment
2% 4%
10%

Summary:
14% 70% of customers surveyed used the
Proprietary Store card!

The least popular cards were Discover

(4%) and American Express (2%).

70%

Discover Proprietary Card MasterCard Visa American Express 8

 TYPE OF CUSTOMER VERSUS NET SALES
CrossTabulation Table – Type of Customer vs. Net Sales
Type of
$0-49.99 $50-99.99 $100-149.99 $150-199.99 $200-249.99 $250-299.99 Total
Customer
Promotional 24 25 12 5 1 3 70
Regular 15 10 4 1 0 0 30
Total 39 35 16 6 1 3 100

Promotional vs. Regular Customers Summary:

30
70% of customers surveyed used the discount
25 coupon (meaning they were Promotional/new
20
customers)!
Frequency

15
Both Promotional and Regular customers follow a
10 similar trend that is skewed right relative to Net
5 Sales, however Promotional Customers, on average,
spent more than Regular Customers and had a
0
$0-49.99 $50-99.99 $100-149.99 $150-199.99 $200-249.99 $250-299.99 significantly higher frequency of sales in the $50-
9
Net Sales
$99.99 range.
Promotional Regular
 CUSTOMER AGE VERSUS NET SALES

Age Vs. Sales

350.00

300.00 Summary:
There is no apparent relationship
250.00
between customer age and net sales,
and the trend line between the two is
Net Sales ($)

200.00
relatively stagnant.
150.00

The customer ages are relatively

100.00
diverse in comparison to the net sales,
as illustrated in the percent frequency
50.00
graphs on previous slides.
0.00
0 10 20 30 40 50 60 70 80 90
Age 10
 # OF ITEMS PURCHASED VS PRICE PAID PER ITEM
Summary:
There is a negative trend line between the total Price Paid Per Item
# of items purchased and the Price Paid per $45.00

Item, indicating customers who purchase more $40.00

items are generally paying less per each item $35.00

than customers that purchase fewer items.
$30.00

Price Paid Per Item

At the extremes, the average price of a single $25.00

item for those that only purchased one thing is $20.00

$41.62, whereas the average price of a single
$15.00
item for the highest # of items purchased (17)
was $13.50. $10.00

$5.00

This is significant in that more customers $-

may be more profitable than fewer 0 2 4 6 8 10 12 14 16 18
Total # of Items Purchased
customers purchasing more items while 11

shopping.
RECOMMENDATIONS

 Recommend catering future marketing efforts towards married women.

 Only 7% of the shoppers surveyed are male.
 Only 16% of the shoppers surveyed are single.
 The promotion contributed substantially to sales; Recommend similar promotions in the future as a means of
bringing in new customers.
 70% of the sampled customers were classified as Promotional
 76% of the Net Sales came from these Promotional Customers!
 Over 80% of the Promotional customers used a Proprietary Card
 Either the customers shopped at Pelican Stores previously or a Proprietary Card was purchased during the Promotion,
indicating they are likely to return.
 Offering Propriety Card-specific specials may help ensure repeat customers.

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TECHNICAL APPENDIX

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PERCENT FREQUENCY GRAPHS (SLIDES 5-7)
 Ranges were selected based on the high and low points of the data to have 6 “groups” each
 Frequency was counted for each quantitative data range using Excel’s “COUNTIF” formulas
 EXAMPLE (for # of Items Purchased for the first range between 1 and 3)
 FREQUENCY=COUNTIFS($C$3:$C$102,">=1",$C$3:$C$102,"<=3") =66

 Relative Frequency for each range was calculated by (Frequency / Total Frequency)
 EXAMPLE (for # of Items Purchased for the first range between 1 and 3)
 RELATIVE FREQUENCY = (Frequency / Total Frequency) = (66 / 100) = .66
 PERCENT FREQUENCY = (Relative Frequency x 100) = (.66 x 100) = 66%

 A Bar Graph was used for a visual representation using the “Range” as the X-Axis and “Percent Frequency” as the Y-Axis
 See Excel Sheet tabs “Net Sales % Frequency”, “Age % Frequency” and “Items % Frequency”

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METHCOD OF PAYMENT (SLIDE 8)
 Data was combed to pull out the different payment methods
Percent Frequency Table
 Frequency was counted for each using Excel’s “COUNTIF” formulas Method of Payment Frequency
Relative Percent
Frequency Frequency
 EXAMPLE: Frequency of Discover Payments Discover 4 0.04 4
=COUNTIF($E$2:$E$101,"Discover") Proprietary Card 70 0.7 70
MasterCard 14 0.14 14
 Relative Frequency for each range was calculated by (Frequency / Total Visa 10 0.1 10
American Express 2 0.02 2
Frequency) Total: 100 1 100
 EXAMPLE (for Discover Cards)
 RELATIVE FREQUENCY = (Frequency / Total Frequency) = (4 / 100) = .04
 PERCENT FREQUENCY = (Relative Frequency x 100) = (.04 x 100) = 4%

 Pie chart was selected as a visual representation of percent frequency for

the qualitative data.
 See Excel Sheet tab “Method of Payment”
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TYPE OF CUSTOMER VS NET SALES (SLIDE 9)
 Type of Customer is qualitative, with only two types possible
 Frequency was counted using Excel’s “COUNTIF” formula
 Data was sorted to separate Promotional and Regular Customers for ease of CrossTabulating
 Frequency was counted for ranges of Net Sales using Excel’s “COUNTIF” formulas
 EXAMPLE:
 Frequency of Promotional Customers spending between $0 and $49.99 =COUNTIFS($D$2:$D$71,">=0",$D$2:$D$71,"<50") = 24
 Frequency of Regular Customers spending between $0 and $49.99 =COUNTIFS($D$72:$D$101,">=0",$D$72:$D$101,"<50") = 15

 Frequencies were totaled for each parameter by Crosstabulation

 EXAMPLE – Total for $0-49.99 is 24 + 15 = 39

 Multidata bar graphs (side-by-side bars Promotional and Regular Customers) comparing Net Sale ranges (X-
Axis) to Frequency (Y-axis) was used as a visual representation of the CrossTabulation
 See Excel Sheet tab “Customer Type”
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 CUSTOMER AGE VS NET SALES (SLIDE 10)

 Data was sorted by Age in Excel

 Scatter graphs were plotted using all the data for
Customer Age and Net Sales CrossTabulation Table
$200- $250-
 Trend line was plotted to explore relationship $0-49.99 $50-99.99 $100-149.99 $150-199.99
249.99 299.99
Total
20-29 3 4 3 0 0 0 10
 Crosstabulation table was created since both data 30-39 11 12 3 2 1 1 30
sets were quantitative using the same 40-49 16 9 5 3 0 0 33
formulas/logic described on the previous slide. 50-59 3 7 4 0 0 2 16
60-69 4 2 1 0 0 0 7
70-79 2 1 0 1 0 0 4
 See Excel tab “Customer Age” Total 39 35 16 6 1 3 100
 Multiple graphs were explored based on the
Crosstabulation data, however only the Scatter
Plot was presented, as it is a clear representation
of the relationship (or lack thereof) between the
two data sets. 17
 # OF ITEMS PURCHASED VS PRICE PAID PER ITEM (SLIDE 11)

 Data was sorted by Item in Excel

 Averages for each number of items purchased were calculated
 (Total Net Sales / # of net sales what that # of items)
 Average Price per item is the above mentioned Average divided by the # of items
 A scatter graph was plotted, with a trendline added, to explore and visually demonstrate the relationship
 See Excel tab “Items % Frequency”

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 RECOMMENDATIONS (SLIDE 12)

 Data was re-sorted in Excel to explore other demographics

 Simple calculations were performed (sums and averages) to explore relationships not discussed in previous
slides.
 Average = (Sum of all data points / Number of data points)
 See Excel tab “Other”

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