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CHAPTER eight Learning Objectives Primary Data Collection: Experimentation Copyright © 2002 South-Western/Thomson Learning Learning Objectives 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 Learning Objectives 6. To compare types of experimental designs. 7. To gain insight into test marketing. Learning Objectives What is an Experiment? To understand the nature of experiments. An Experiment: The researcher changes an explanatory, independent, or experimental variable to observe changes in the dependent variable. Experimental variable Dependent variable marketing mix total sales advertising market share Learning Objectives Demonstrating Causation To understand the nature of experiments. 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 Learning Objectives The Experimental Setting: Laboratory or Field To learn about the experimental setting. 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 Learning Objectives Experimental Validity To examine experimental validity. 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 Learning Objectives Experimental Validity To examine experimental validity. Extraneous Variables: Threats to Experimental Validity • History • Maturation • Instrument Variation • Selection Bias • Mortality • Testing Effect • Regression to the Mean Learning Objectives Experimentation: Summary Of Basic Issues To examine experimental validity. 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 Learning Objectives Experimentation: Summary Of Basic Issues To learn the limitations of experimentation in marketing research. 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 Experimentation: Summary Of Basic Issues Learning Objectives To learn the limitations of experimentation in marketing research. 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 Learning Objectives Experimentation: Summary Of Basic Issues To compare experimental designs. 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 Learning Objectives Experimentation: Summary Of Basic Issues To compare experimental 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. Multiple Time-Series Designs • An interrupted time-series design with a control group. Learning Objectives Test Markets To gain insight into test marketing. 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 Learning Objectives Test Markets To gain insight into test marketing. 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 Learning Objectives Test Markets To gain insight into test marketing. 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 Learning Objectives Test Markets To gain insight into test marketing. 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 Learning Objectives SUMMARY • What is an Experiment? • Demonstrating Causation • The Experimental Setting: Laboratory or Field • Experimental Validity • Experimentation: Summary Of Basic Issues • Test Markets Learning Objectives The End Copyright © 2002 South-Western/Thomson Learning