1. Learning Objectives Copyright © 2002 South-Western/Thomson Learning Primary Data Collection: Experimentation CHAPTER eight

2. 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.

3. Learning Objectives 6. To compare types of experimental designs. 7. To gain insight into test marketing.

4. Learning Objectives 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 sales marketing mix advertisingmarket share

5. Learning Objectives 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 Demonstrating Causation To understand the nature of experiments.

6. Learning Objectives 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.

7. Learning Objectives 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 O 1 X O 2 for time periods To examine experimental validity. Experimental Validity

8. Learning Objectives 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

9. Learning Objectives Experimental Design and Treatment Experimental Design: Researcher has control of variables and manipulates them. 1. Treatment 2. Subjects 3. Dependent variable 4. Plan for extraneous causal factors To examine experimental validity. Experimentation: Summary Of Basic Issues

10. Learning Objectives Experimental Effects The effect of the treatment variable on the dependent variable. The Control of Other (Extraneous) Causal Factors Randomization Physical Control Design Control Statistical Control To learn the limitations of experimentation in marketing research. Experimentation: Summary Of Basic Issues

11. Learning Objectives Why Experiments Are Not Used More Often The High Cost of Experiments Security Issues exposing to the actual marketplace competitors Implementation Problems cooperation contamination differences: test market/population lack of control group To learn the limitations of experimentation in marketing research. Experimentation: Summary Of Basic Issues

12. Learning Objectives Selected Experimental Designs Three Preexperimental Designs The One-Shot Case Study The One-Group Pretest-Posttest Design The Static-Group Comparison Three True Experimental Designs Before and After with Control Group The Solomon Four-Group Design The After-Only with Control Group To compare experimental designs. Experimentation: Summary Of Basic Issues

13. Learning Objectives 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. Multiple Time-Series Designs An interrupted time-series design with a control group. To compare experimental designs. Experimentation: Summary Of Basic Issues

14. Learning Objectives Test Markets Defined Any 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

15. Learning Objectives Costs of Test Marketing Costs include: commercials, advertising, research, coupons, sampling Deciding Whether to Conduct a Test Market To obtain a good estimate of the sales potential under realistic conditions To identify weaknesses of the product To gain insight into test marketing. Test Markets

16. Learning Objectives Steps in a Test Market Study Define the Objective Select a Basic Approach Develop Detailed Procedures for the Test Select Markets for the Test Execute the Plan Analyze the Test Results To gain insight into test marketing. Test Markets

17. Learning Objectives Simulated Test Markets (STM) uses survey data and mathematical models to simulate test market results also called pretest market. Other Types of Test Marketing A rolling rollout Lead country strategy Line extensions To gain insight into test marketing. Test Markets

18. Learning Objectives What is an Experiment? Demonstrating Causation The Experimental Setting: Laboratory or Field Experimental Validity Experimentation: Summary Of Basic Issues Test Markets SUMMARY

19. Learning Objectives The End Copyright © 2002 South-Western/Thomson Learning