Case Study:
The Custom Car Wash Systems offers car wash franchises throughout the United States. Currently, 872 car washes franchised by Custom are in operation. As part of its service to franchisees, Custom runs a national marketing and advertising program. Carbalm is the senior vice president in charge of marketing for Custom. He is currently in the process of designing the marketing and advertising campaigns for the upcoming year. Bahn believes that it is time for Custom to take a more careful look at user segments in the market. Based on other analyses, he and his associates at Custom have decided that the upcoming campaign should target the heavy user market. Through other research, Custom has defined “heavy car wash users” as those individuals who have their cars washed at a car wash facility three or more times per month on average. “Light users” are defined as those who use such a facility less than three times a month but at least four times a year. “Nonusers” are defined as those who use such a facility less than four times per year. Bahn and his associates are currently in the process of attempting to identify those factors that discriminate between heavy and light users. In the first stage of this analysis, Custom conducted interviews with 50 customers at 100 of its locations for a total of 5,000 interviews. Cross tabulation of the classification variables with frequency of use suggests that four variables may be predictive of usage heaviness: vehicle owner age, annual income of vehicle owner, age of vehicle, and socioeconomic status of vehicle owner (based on an index of socioeconomic variables). Custom retained a marketing research firm called Marketing Metrics to do further analysis for the company. Marketing Metrics evaluated the situation and decided to use multiple discriminant analysis to further analyze the survey results and identify the relative importance of each of the four variables in determining whether a particular individual is a heavy or light user. The firm obtained the following results:
Q1. What would you tell Bahn about the importance of each predictor variable?
Q2. What recommendations would you make to him about the type of people Custom should target, based on its interest in communicating with heavy users?
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.