Statistical Report: CPResorts Forster

CourtneyDoymn ea tm ii c Moses c E c o n r C o n s u l (z3373503) D tE iCnSg) S e r v i c e s (

A statistical report that evaluate the S u b j e c t : effectiveness of the marketing campaign to E C O N 1 2 0 3 promote the newly established CPResorts M a y 2 0 1 1 Forster.

Courtney Moses (z3373503) ECON1203

1. EXECUTIVE SUMMARY
The following report is a statistical analysis of the effectiveness of the recent marketing campaign that has promoted the newly established CPResorts Forster facility. Based on the sample data of 200 customers that have made bookings at the resort within the past year, the marketing campaign has been successful in attracting the target market to the resort. The typical customer that has stayed at the resort is middle aged, with older children and is earning a substantially high income. This demonstrates how the marketing campaign has succeeded in positioning the resort as an upmarket family friendly facility. However, the marketing campaign has been successful in achieving one of the two Key Performance Indicators (KPIs) of the resort. Whilst the majority of customers stay for a week of more the average customer spends significantly less than $260 per day in excess of accommodation costs. The failure to meet this requirement suggests that a review is to be undertaken strategies and policies to achieve this level of expenditure.

Courtney Moses (z3373503) ECON1203

2. TABLE OF CONTENTS
Page Number
1. 2. 3. 4.

Executive Summary Table of Contents Introduction Type of Customer

4.1. Income 4.2. Number 4.3. Age

2 3 4 4 4 4 5 6 6 7 8

in the Booking Party

5.

Key Performance Indicators

5.1. Average

Nights Stayed Expenditure

5.2. Average 6.

Recommendations

Courtney Moses (z3373503) ECON1203

1. INTRODUCTION
CPResorts is a successful resort chain that has established a new facility in Forster, a popular holiday destination on the mid-north coast of New South Wales. The company has invested a large amount of money into a marketing campaign in order to promote and attract the newly established resort. To evaluate the effectiveness of this campaign it is important to statistically analyse of the type of customer that has been attracted as well as analyzing the performance of the resort through measuring the degree to which the Key Performance Indicators (KPIs) have been achieved.

2. TYPE OF CUSTOMER
An integral component to the success of CPResorts Forster is an understanding of the type of customer that has been attracted to the resort. Key demographic features from the sample have been analysed to provide a univariate analysis of the following three key characteristics.

4.1. INCOME
Annual family income is an important characteristic as it is a determining factor influencing the amount of nights stayed, number of people in the booking party and customer expenditure on resort facilities available.

As shown in figure 1, 69% of customers have a family income that exceeds $80,000 per year. This is also pivotal to consumer expenditure, as people with larger incomes have a greater proportion of disposable income to spend on discretionary activities. This is confirmed by the sample data, as the average total expenditure of low income earners is $525 whilst those earning above $80,000 spend $1454, which is approximately three times as much. Therefore, it can be inferred that the promotional efforts to position the resort as an upmarket facility have been successful as the majority of customers who have chosen to stay at the resort within the past year earn relatively high incomes.

4.2. NUMBER IN BOOKING PARTY

Figure 1 This pie chart displays the family income from a sample of 200 customers based on the two categories of earning below or above $80,000 per year.

The number of guests in each booking party is another statistic which displays the type of customer as the aim of the marketing campaign is to attract families to

Courtney Moses (z3373503) ECON1203

the resort, which can be inferred to be represented by a number of 3 or more guests. As displayed by table 2, there are two relatively large booking numbers, which are bookings with 2 or 4 people in the party. The sample data displays that these numbers are relatively close, revealing that 34% of people were in a party of 2, whilst 4 people was the modal class and marginally larger, represented by 35% of bookings. The table also displays that approximately 66% of bookings contained 3 or more people in the booking party.
Table 2: A cumulative relative frequency table displaying the number of people in the booking party based on sample data from bookings made within the past 12 months.

Number of People

Frequency

Relative Frequency

Cumulative Relative Frequency 0% 34% 46% 80% 90% 100%

1 2 3 4 5 6 TOTAL

0 67 24 69 20 20 200

0% 34% 12% 35% 10% 10% 100%

Whilst there are a relatively large number of couples booking accommodation at the resort, according to the above definition of families, it can be inferred that the majority of those choosing to stay at CPResorts Forster are families. Therefore the marketing campaign can be deemed successful in terms of attracting families to stay at the newly established resort.

4.3. AGE

Age is another demographic feature that is useful in revealing whether the marketing campaign has succeeded in achieving the objective of attracting a certain type of family to stay at the resort. Through a statistical analysis, it has become apparent that the resort has attracted a middle aged customer base. As shown in table 1, the median age group is 46 to 50 years old and 50.5% of customers are aged between 46 and 65 years old. This corresponds to Figure 2, below, which is positively skewed indicating that the majority of the ages of those booking accommodation are middle aged. As a result, this can potentially translate to families with older children choosing to stay at the resort.

Courtney Moses (z3373503) ECON1203

Age

Frequenc y 7 20 33 39 34 32 22 13 200

Cumulativ e% 3.50% 13.50% 30.00% 49.50% 66.50% 82.50% 93.50% 100.00% 100.00%

Table 1: The distribution from the sample of the ages of the person who booked to stay at CPResorts Forster within the past year

25 - 30 31 - 35 36 - 40 41 - 45 46 - 50 51 - 55 56 - 60 61 - 65 Total

Figure 2: A Histogram displaying the frequency of age groups booking accommodation at CPResorts Forster within the previous 12 months.

Overall, descriptive statistics have revealed that the type of customer that is choosing to stay at the Forster resort is older families that are earning a substantially high income. This fulfills the marketing campaign objectives by successfully positioning the resort as an upmarket facility that appeals to families.

3. KEY PERFORMANCE INDICATORS

As stated in the business plan, management aim to meet two KPIs; firstly that more than 50% of customers stay for a full week (i.e. seven nights) and secondly hat the average customer spends more than $260 per day in excess of accommodation costs.

5.1. AVERAGE NIGHTS STAYED

Figure 3: A normal distribution of the sample proportion with hypothesised mean of 0.5 and a 5% rejection region, constituting a critical value of 0.44.

Courtney Moses (z3373503) ECON1203

Using sample data, a one tailed hypothesis test on the sample proportion has been used as an inferential method to analyse whether the first KPI is being achieved. The null hypothesis is that 50% of customers stay for a full week (H0 = p = 0.5), whilst the alternative hypothesis is that less than 50% of customers stay for 7 nights (H1 = p < 0.5). Figure 3 illustrates that the sample proportion, 0.51, is much greater than the critical value of 0.44 and constitutes a p-value of 0.6103. As a result, there is not enough statistical evidence to reject the null hypothesis in favour of the alternative hypothesis. Therfore, more than 50% customers stay for a full week at the resort which successfully meets the target established by the KPI.

5.2. AVERAGE EXPENDITURE

In order to infer whether the average spending per day is greater than $260, a one tailed hypothesis test has been conducted using the sample data. It is assumed that although it unknown whether the population is normally distributed, the large sample size will mean that the sample distribution will be approximately normal according to the central limit theorem. The null hypothesis is that the average spending above accommodation costs is $260 per customer (H0 = = 260) whilst the alternative hypothesis is that the average customer spends less than $260 per day in excess of accommodation costs (H1 = < 260). As seen in figure 4b), the standardized sample mean falls within the rejection region of 5% and has a p-value of 0. Removing the effects of standardization, shown in figure 4a), the sample mean expenditure of $239 per day is significantly less than the lower control limit of $254 per day. Therefore, there is enough statistical evidence to infer that the null hypothesis should be rejected in favour of the alternative hypothesis. Conclusively, it can be stated that the average customer is not spending more than $260 per day in excess of accommodation costs and thus this KPI is not being achieved.

Courtney Moses (z3373503) ECON1203

Figure 4: Two normal distributions with a rejection region of 0.05, showing the unstandardized and standardized sample data relating the daily expenditure of customers in excess of accommodation costs.

4. RECOMMENDATIONS
The statistical analysis of the type of customer and KPIs of the newly established CPResorts Forster has revealed that whilst the marketing campaign has been successful in attracting the target market to stay for a full week it has not resulted in the achievement of the second KPI. Whilst the majority of customers earn a substantial income and therefore have a larger proportion of discretionary income, data has shown that they are not spending $260 per day in excess of accommodation cost. It is recommended that management review the pricing policies of the facilities at the resort in order to achieve this target and attain prosperous success.

Courtney Moses (z3373503) ECON1203