1. Chapter 9 Causal Research Designs and Test Markets

2. Types of Experiments Definitions – two broad types:
Laboratory experiments – take place in an artificial setting where extraneous variables can be controlled.
Field experiments – take place in a natural setting but extraneous variables cannot be controlled.
9-2

3. Field experiments – issues to consider
Realism
Control
Time frame
Cost
Competitive reactions
9-3

4. Types of Variables in Experimental Designs
Independent Variables
Types of Variables in Experimental Designs
Dependent Variables
Variables manipulated
by researcher
Control Variables
Measures of effects/outcomes
Extraneous Variables
Conditions that we measure to better understand the true effects
Uncontrolled, unmeasured
variables that may affect
the dependent variable
9-4

5. Validity and Reliability Concerns
Internal Validity
Reliability
External Validity
9-5

6. Experiments – Validity
External validity – the extent to which a causal relationship is true for the defined target population.
Internal validity – the extent to which the research design accurately identifies causal relationships.
Validity – the extent to which the conclusions drawn from the experiment are true.
Notes:
9-6

7. Threats to Internal Validity
History
Maturation
Testing
Instrumentation
Selection Bias
Statistical Regression
Mortality
Notes:
9-7

8. Threats to External Validity
Treatment vs. Treatment
Treatment vs. Testing
Treatment vs. Selection
Treatment vs. Setting
Treatment vs. History
Notes:
9-8

9. The Nature Of Experimentation
Construct validity the extent to which the variables under investigation are completely and accurately identified prior to hypothesizing any functional relationships. (Are we measuring what we think we are measuring?)
9-9

10. Threats to Construct Validity
Inadequate measurement of the variables
One measurement, one methodology bias
Evaluation apprehension – respondent concern of other knowing their responses
Demand characteristics – respondents trying to guess the desired response
Diffusion of treatment – respondents causing bias by discussing the treatment with others.
Notes:
9-10

11. Improving Experimental Validity
Time order of the manipulation exposure.
Including control groups
Exclusion of non-similar test subjects.
Matching extraneous variables.
Randomization of test subjects to treatment groups.
Notes:
9-11

12. Symbols Used in Experimental Research Designs
X = exposure of an independent variable to a group of test subjects for which the effects are to be determined. O = observation or measurement of the dependent variable (outcome) for the test subjects. [R] = random assignment of test subjects to separate groups. EG = the experimental group of test subjects. CG = the control group of test subjects. → = movement through time shown as left-to-right movement. Vertical alignment of symbols = activities that occur simultaneously. Horizontal alignment of symbols = refer to a specific group of subjects.
9-12

13. Pre-Experimental Designs
One-Shot Study
(EG): X → O1
One-Group, Pretest-Posttest
(EG): O1 → X1 → O2
Static Group Comparison
(CG): O2
9-13

14. True Experimental Designs
Posttest-Only, Control Group (Good) (EG): [R] X → O1 (CG): [R] O2 Pretest-Posttest, Control Group (Better) (EG): [R] O1 → X → O2 (CG): [R] O3 → O4 Solomon Four Group (Best) Design 1 (CG): [R] O3 → O4 Design 2 (EG): [R] X → O5 (CG): [R] O6
9-14

15. Quasi-Experimental Designs
Non-Equivalent Control Group
Group 1 O1 → X → O2
Group 2 O3 O4
Separate Sample, Pretest-Posttest
Sample 1 O1 → (X)
Sample 2 (X) → O2
9-15

16. Test Marketing
use of a controlled field experiment to collect information on market performance indicators.
Pros:
Is most accurate method of forecasting future sales.
Provides an opportunity to pretest marketing mix variables (particular PRICE).
Cons:
Expensive.
Exposes the new product or service to competitors.
Takes time to conduct.
9-16

17. 9-17

18. Criteria for Selecting Test Market Locations
Representativeness: Do demographics match the total market?
Degree of isolation: Phoenix and Tulsa are isolated markets – thus better; Los Angeles is not isolated.
Ability to control distribution and promotion: Are there preexisting arrangements to distribute the new product in selected channels of distribution? Are local media prepared to test variations in promotional messages?
9-18