List Testing Exercise

Simulation Overview

It’s a common direct mail practice to test a random sample of names from a rented list before deciding whether to rent the entire list. In this exercise, students use a simulation to explore this practice, making decisions about how many names to test and how many rounds of testing to conduct before making the rollout decision. Students must weigh the value of testing against its costs. After making decisions for 10 lists, students are scored based on profit.

Learning Focus

• Experiment with the mechanics of list testing
• Demonstrate the weaknesses of common statistical approaches for determining sample size
• Understand the statistical reasons why testing results differ from rollout results
• Demonstrate the value of testing
• Learn how simulation can be used to answer statistical questions

Topics Covered

• List Testing
• Sample Size Analysis
• Market Research

Each simulation comes with a Teaching Guidebook for the facilitator along with 1:1 facilitator training and free trials.

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This simulation is by Darden Business Publishing and Forio