Question

A marketing research consultant hired by Coca-Cola is interested in determining if the proportion of customers who prefer Coke to other brands is over 50%. A random sample of 200 consumers was selected from the market under investigation, 55% favored Coca-Cola over other brands. Additional information is presented below.

Sample proportion 0.55Standard error of sample proportion 0.03518Z test statistic 1.4213p-value 0.07761

If you were to conduct a hypothesis test to determine if greater than 50% of customers prefer Coca-Cola to other brands, would you conduct a one-tail or a two-tail hypothesis test? Explain your answer.

Answer 1

A one-tailed hypothesis will be used to perform the test.

Explanation:

The purpose of the marketing research consultant hired by Coca-Cola is to determine whether the the proportion of customers who prefer Coke to other brands is over 50%.

The marketing research consultant selected a random sample of n = 200 customers. The sample proportion of people who favored Coca-Cola over other brands was 55%.

The marketing research consultant can perform a single proportion hypothesis test to determine whether greater than 50% of customers prefer Coca-Cola to other brands.

Since we need to determine whether the population percentage is greater than a null value, the hypothesis is not two-tailed.

The hypothesis can be defined as:

H₀: The proportion of people who favor Coca-Cola over other brands was 55%, i.e. p = 0.50.

Hₐ: The proportion of people who favor Coca-Cola over other brands was more than 55%, i.e. p > 0.50.

Thus, a one-tailed hypothesis will be used to perform the test.