learning objectives copyright © 2004 john wiley & sons,inc primary data collection:...

Learning ObjectivesLearning Objectives

Copyright © 2004 John Wiley & Sons,Inc

Primary Data Collection:

Experimentation

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Learning Objectives

1. To understand the nature of experiments.

2. To gain insight into requirements for proving causation.

3. To learn about the experimental setting.

4. To examine experimental validity.

5. To learn the limitations of experimentation in marketing research.


Learning Objectives

6. To compare types of experimental designs.

7. To gain insight into test marketing.


An Experiment:

The researcher changes an explanatory, independent, or experimental variable to observe changes in the dependent variable.

To understand the nature of experiments.What is an Experiment?

Dependent variable

Experimental variable

total salesmarketing mix

advertising market share


Causal Research:

The only types of research that has the potential to demonstrate that a change in one variable causes some predictable change in another variable

To Demonstrate Causation:

- Concomitant Variation (Correlation

- Appropriate Time Order Of Occurrence

- Elimination Of Other Possible Causal Factors

Demonstrating Causation To understand the nature of experiments.


Scientific Definition—Causation and Causality

1. X is only one of a number of determining conditions that caused the observed change in Y.

2. X can be a cause of Y if the presence of X makes the occurrence of Y more probable or likely

3. One can never definitively prove that X is a cause of Y but only infer that a relationship exists

4. Causal relationships are always inferred and never demonstrated conclusively beyond a shadow of a doubt.



Concomitant Variation:

A predictable statistical relationship between two variables

Appropriate Time Order of Occurrence:

A change in an independent variable must occur before a change in the dependent variable

Elimination of Other Possible Causal Factors

The change in B was not caused by some factor other than A



Laboratory experiments:

Conducted in a controlled setting.

Advantages of laboratory experiments:

•Ability to control all variables

•Greater internal validity

Disadvantages of laboratory experiments:

•External validity

Field experiments:

Tests conducted outside the laboratory

The Experimental Setting:Laboratory or Field

To learn about the experimental setting.


Internal and External Validity

Internal Validity:

The extent to which competing explanations can be ruled out.

External Validity:

The extent to which causal relationships can be generalized to outside persons, settings, and times.

Experimental Notation:

X indicates exposure

O for observation

O1 X O2 for time periods

To examine experimental validity.Experimental Validity


Extraneous Variables: Threats to Experimental Validity

• History

• Maturation

• Instrument Variation

• Selection Bias

• Mortality

• Testing Effect

• Regression to the Mean

To examine experimental validity.Experimental Validity


Confounding Variables—extraneous causal factors because they confound the treatment condition

Four Basic Approaches to Control Extraneous Factors

1. Randomization

2. Physical Control

3. Design Control

4. Statistical Control

To learn about the experimental setting

Controlling Extraneous Variables


Experimental Design

Ex Post Facto Research—nonexperimental designs

Factors of the Experimental Design:

Researcher has control of variables and manipulates them.

1. Treatment

2. Subjects

3. Dependent variable

4. Plan for extraneous causal factors

To learn about experimental settingExperimental Design,

Treatment, and Effects


Treatment Variable

-Independent variable that is manipulated

Experimental Groups

1. Control Group—the group in which the independent variable is not changed during the course of the experiment

2. Test Group—the group that is exposed to manipulation (change) of the independent variable

Experimental EffectsThe effect of the treatment variable on the dependent variable

To learn about experimental setting.Experimental Design,

Treatment, and Effects


The High Cost of Experiments

• Time

• Money

Security Issues

• exposing to the actual marketplace

• competitors

Implementation Problems

• cooperation

• contamination

• lack of control group

To learn the limitations of experimentation in marketing research.

Limitations of Experimental Research


Three Pre-experimental Designs

• One-Shot Case Study—pre-experimental design with no pretest observations, no control groups, and an aftermeasurement only

• No pretest observations

• No control group of test units

•Lacks internal validity

• One-Group Pretest-Posttest Design—pre- and postmeasurements but no control

• Static-Group Comparison Design—pre-experinmental

To compare experimental designs.Selected Experimental

Designs


Three Pre-experimental Designs (cont’d)

• One-Group Pretest-Posttest Design—pre- and postmeasurements but no control group

• History

• Maturation

• Only one pretest observation

• Static-Group Comparison Design—pre-experinmental

• Absence of pretests

• Not assigned to the groups randomly


Designs


True Experimental Designs

• Before and After with Control Group Design

• Mortality

• History

• Solomon Four-Group Design

•Second experimental group no pretest

•Second control group only posttest measurement

• After-Only with Control Group


Designs


Quasi-Experiments

Developed to deal with external validity

Researcher lacks complete over the scheduling of treatment or must assign treatment in a nonrandom manner.

Interrupted Time-Series Designs

• The treatment interrupts repeated measurements.

• Cannot control history

Multiple Time-Series Designs

• An interrupted time-series design with a control group.


Designs


Test Markets DefinedAny research that involves:

• Testing a new product or change in an existing marketing strategy.

• The use of experimental or quasi - experimental procedures

Test Market Usage and Objectives• Estimate of market share• Effect on sales of similar products• Characteristics of consumers• Behavior of competitors

To gain insight into test marketing.Test Markets


Direct Costs of Test Marketing

Costs include:

• Commercials

• Advertising

• Media

• Research

• POP

• Coupons

• Sampling

• trade allowances



Indirect Costs of Test Marketing

Costs include:

• Management time

• Diversion of sales activity

• Negative impact of test market failure

• Negative trade reactions to products

• Cost of letting competitors know what the firm is doing



Decision To Conduct Test Marketing

Benefits

• Good estimate of product’s sales potential

• Identify weaknesses of the product and the proposed marketing strategy

Factors to Consider

• Weight the cost and risk of failure

• Likelihood and sped product can be copied

• Damage an unsuccessful new product would inflict



Steps in a Test Market Study

1. Define the Objective

2. Select a Basic Approach

3. Develop Detailed Procedures for the Test

4. Select Markets for the Test

5. Execute the Plan

6. Analyze the Test Results



Simulated Test Markets (STM)

• uses laboratory approaches and mathematical models to simulate test market results

Other Types of Test Marketing

• A rolling rollout

• Lead country strategy



• What is an Experiment?

• Demonstrating Causation

• The Experimental Setting: Laboratory or Field

• Experimental Validity

• Experimentation: Summary Of Basic Issues

• Test Markets

SUMMARY

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