BusinessResearch Methods William G. Zikmund Chapter 12:Experimental Research
Experiment• A research investigation in which conditions are controlled• One independent variable is manipulated (sometimes more than one)• Its effect on a dependent variable is measured• To test a hypothesis
Basic Issues of Experimental Design• Manipulation of the Independent Variable• Selection of Dependent Variable• Assignment of Subjects (or other Test Units)• Control Over Extraneous Variables
The experimenter has some degree ofcontrol over the independent variable.The variable is independent because itsvalue can be manipulated by theexperimenter to whatever he or shewishes it to be.
Experiment TreatmentAlternative manipulations of the independent variable being investigated
Independent Variable• The experimenter controls independent variable.• The variable’s value can be manipulated by the experimenters to whatever they wish it to be.
Manipulation of Independent Variable• Classificatory Vs. continuous variables• Experimental and control groups• Treatment levels• More than one independent variable
Experimental Treatments• The alternative manipulations of the independent variable being investigated
Dependent Variable• Its value is expected to be dependent on the experimenter’s manipulation• Criterion or standard by which the results are judged
Laboratory Experiment Field Experiment Artificial-Low Realism Natural-High Realism Few Extraneous Many Extraneous Variables Variables High control Low control Low Cost High Cost Short Duration Long Duration Subjects Aware of Subjects Unaware of Participation Participation
When does an Experiment have Internal Validity?Internal Validity - The ability of an experiment to answer the question whether the experimental treatment was the sole cause of changes in a dependent variableDid the manipulation do what it was supposed to do?
Isolating Extraneous Variation with a Control Group• History Effects• Maturation Effects• Mortality Effects
Type of Extraneous Variable ExampleHistory - Specific events in the A major employerenvironment between the Before closes its plant inand After measurement that are test market areabeyond the experimenter’s controlMaturation - Subjects change Subjects becomeduring the course of the experiment tiredTesting - The Before measure alerts Questionnaireor sensitizes subject to nature of about the traditionalexperiment or second measure. role of women triggers enhanced awareness of women in an experiment.
Instrument - Changes in New questions aboutinstrument result in response bias women are interpreted differently from earlier questions.Selection - Sample selection Control group anderror because of differential experimental group isselection comparison groups self-selected group based on preference for soft drinksMortality - Sample attrition; some Subjects in one groupsubjects withdraw from experiment of a hair dying study marry rich widows and move to Florida
Solomon Four Group DesignExperimental Group 1: R O1 X O2Control Group 1: R O3 O4Experimental Group 2: R X O5Control Group 2: R X O6
Advanced Experimental Designs are More Complex• Completely randomized• Randomized block design• Latin square• Factorial
Completely Randomized Design• An experimental design that uses a random process to assign subjects (test units) and treatments to investigate the effects of only one independent variable.
Completely Randomized Designs Control: Experimental Experimental no music treatment: treatment: slow music fast musicAverage minutes 16 18 12shopper spendsin store
Independent Variable ALevel 1 Level 2 Level 3Group A Group B Group C
Completely Randomized DesignWith a pretest posttest Group A R O1 X1 O2 Group A R O3 X2 O4 Group A R O5 X3 O6
Completely Randomized DesignWith a posttest Group A R X1 O1 Group B R X2 O2 Group C R X3 O3
Randomized Block Design• An extension of the completely randomized design in which a single extraneous variable that might affect test units’ response to the treatment has been identified and the effects of this variable are isolated by blocking out its effects.
Randomized Block Design Independent Variables Control: Experimental Experimental no music treatment treatment: slow music fast musicBlocking variable Mornings and afternoons Evening hours
Factorial Design• An experiment that investigates the interaction of two or more variables on a single dependent variable.
Independent Variable 1 No Music Slow Music Fast MusicIndependent Variable 2 No Music cart signs Grocery cart signs
Effects• Main effect • Interaction effect• The influence of a • The influence on a single independent dependent variable by variable on a combinations of two dependent variable. or more independent variables.
2 x 2 Factorial Design Ad A Ad B Men 65 Main Effects > of GenderWomen 65 70 60 > Main Effects of Ad
100 Interaction Between Gender and Advertising Copy 90 Wo 80 me n 70Believability 60 Men 50 40 30 20 10 Ad A Ad B
Independent Variable 1 Level 1 Level 2 Level 1 Group A Group BIndependent Variable 2 Level 2 Group D Group C
2 x 2 Factorial with a Pretest Posttest Group A R O1 X11 O2 Group B R O3 X21 O4 Group C R O5 X12 O6 Group D R O7 X22 O8
2 x 2 Factorial Design with a Posttest Measure Group A R X11 O1 Group B R X21 O2 Group C R X12 O3 Group D R X22 O4
A Test Market Experiment on Pricing Sales in Units (thousands) Regular Price Reduced Price Cents-Off Coupon $.99 $.89 Regular PriceTest Market A, B, or C 130 145 153Test Market D, E, or F 118 143 129Test Market G, H, or I 87 120 96Test Market J, K, or L 84 131 99Mean X1=104.75 X2=134.75 X1=119.25Grand Mean X=119.58
Latin Square Design• A balanced, two-way classification scheme that attempts to control or block out the effect of two or more extraneous factors by restricting randomization with respect to the row and column effects.
Order of Usage 1 2 3 1 A B CSUBJECT 2 B C A 3 C A B
TEST MARKETING Not just trying But scientific something testing outControlled experimentation
Test Marketing Not just trying But scientific something testing outControlled experimentation
Test Marketing• An experimental procedure that provides an opportunity to test a new product or a new marketing plan under realistic market conditions to measure sales or profit potential.
Functions of Test Marketing IDENTIFY ANDESTIMATE CORRECTOUTCOMES WEAKNESSES IN PLANS
A Lengthy and Costly Procedure When not $$$$$ to Test? Loss of How Long Secrecy Should a Test Last?
Popular Test Markets• Pittsfield, • Eau Claire,Wisconsin Massachusetts • Wichita, Kansas• Charlotte, North • Tulsa, Oklahoma Carolina • Omaha, Nebraska• Columbus, Ohio • Grand Junction.• Little Rock, Arkansas Colorado• Evansville, Indiana • Wichita Falls, Texas• Cedar Rapids, Iowa • Odessa-Midland, Texas
Selecting a Test Market• Population size• Demographic composition• Lifestyle considerations• Competitive situation• Media• Self-contained trading area• Overused markets - secrecy
Control Method of Test Marketing• Small city• Low chance of being detected• Distribution is forced (guaranteed)
The Advantages of Using the Control Method of Test Marketing• Reduced costs• Shorter time period needed for reading test market results• Increased secrecy from competitors• No distraction of company salespeople from regular product lines
Some Problems Estimating Sales Volume• Over-attention• Unrealistic store conditions• Reading competitive environment incorrectly• Incorrect volume forecasts – Adjusted data – Penetration and repeat purchase rate• Time lapse
High Tech Test MarketsElectric TestMarkets Simulated Test Markets Virtual-reality Simulated Test Markets