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Business
         Research Methods

                William G. Zikmund


     Chapter 12:
Experimental Research
Copyright © 2000 by Harcourt, Inc.

   All rights reserved. Requests for
permission to make copies of any part
 of the work should be mailed to the
   following address: Permissions
Department, Harcourt, Inc., 6277 Sea
   Harbor Drive, Orlando, Florida
              32887-6777.
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




                           Copyright © 2000 by Harcourt, Inc. All rights reserved
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

                            Copyright © 2000 by Harcourt, Inc. All rights reserved
The experimenter has some degree
of control over the independent
variable. The variable is
independent because its value can
be manipulated by the experimenter
to whatever he or she wishes it to
be.

                    Copyright © 2000 by Harcourt, Inc. All rights reserved
Experiment Treatment

Alternative manipulations of the
   independent variable being
           investigated



                     Copyright © 2000 by Harcourt, Inc. All rights reserved
Independent Variable

• The experimenter controls
  independent variable.
• The variable’s value can be
  manipulated by the
  experimenters to whatever they
  wish it to be.
                     Copyright © 2000 by Harcourt, Inc. All rights reserved
MANIPULATION OF INDEPENDENT
         VARIABLE


•Classificatory Vs. Continuous Variables
•Experimental and Control Groups
•Treatment Levels
•More Than One Independent Variable


                         Copyright © 2000 by Harcourt, Inc. All rights reserved
Experimental treatments are
the alternative manipulations
of the independent variable
being investigated.



                    Copyright © 2000 by Harcourt, Inc. All rights reserved
DEPENDENT VARIABLE

• its value is expected to be
  dependent on the
  experimenter’s manipulation
• criterion or standard by which
  the results are judged

                      Copyright © 2000 by Harcourt, Inc. All rights reserved
DEPENDENT VARIABLE

• SELECTION
      – e.g... sales volume, awareness,
        recall
• MEASUREMENT




                             Copyright © 2000 by Harcourt, Inc. All rights reserved
Dependent Variable



• Selection
    - e.g., sales volume, awareness,
    recall

• Measurement


                      Copyright © 2000 by Harcourt, Inc. All rights reserved
The dependent variable is so
called because its value is
expected to be dependent on the
experimenter’s manipulation; it is
the criterion or standard by which
the results are judged.

                      Copyright © 2000 by Harcourt, Inc. All rights reserved
TEST UNITS - subjects or entities
whose response to the
experimental treatment are
measured or observed.




                          Copyright © 2000 by Harcourt, Inc. All rights reserved
Two Types of Experimental Error



•Constant Error
•Random Errors




                        Copyright © 2000 by Harcourt, Inc. All rights reserved
TWO TYPES OF
     EXPERIMENTAL ERRORS
• CONSTANT
  ERRORS
• RANDOM
  ERRORS




                Copyright © 2000 by Harcourt, Inc. All rights reserved
FIELD VERSUS LABORATORY
            EXPERIMENTS




              Copyright © 2000 by Harcourt, Inc. All rights reserved
Controlling Extraneous Variables


• Elimination of Extraneous
     Variables
• Constancy of Conditions
• Order of Presentation
• Blinding
• Random Assignment

                       Copyright © 2000 by Harcourt, Inc. All rights reserved
How May an Experimenter control for
Extraneous Variation?


      •Eliminate Extraneous Variables
      •Hold Conditions Constant
      •Randomization
      •Matching Subjects



                           Copyright © 2000 by Harcourt, Inc. All rights reserved
Establishing Control




               Copyright © 2000 by Harcourt, Inc. All rights reserved
DEMAND CHARACTERISTICS

• EXPERIMENTAL PROCEDURES THE
  INTENTIONALLY HINT TO SUBJECTS
  SOMETHING ABOUT THE
  EXPERIMENTER’S HYPOTHESIS




                     Copyright © 2000 by Harcourt, Inc. All rights reserved
Demand Characteristics



• Guinea Pigs

• Hawthorne Effect




                     Copyright © 2000 by Harcourt, Inc. All rights reserved
Field Vs. Laboratory Experiment




                    Copyright © 2000 by Harcourt, Inc. All rights reserved
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



                                         Copyright © 2000 by Harcourt, Inc. All rights reserved
CONTROL GROUPS


•   Isolates Extraneous Variation




                     Copyright © 2000 by Harcourt, Inc. All rights reserved
WHEN IS AN EXPERIMENT
       INTERNAL VALIDITY?
• INTERNAL VALIDITY - THE ABILITY
  OF AN EXPERIMENT TO ANSWER
  THE QUESTION OF WHETHER THE
  EXPERIMENTAL TREATMENT WAS
  THE SOLE CAUSE OF CHANGES IN A
  DEPENDENT VARIABLE
• DID THE MANIPULATION DO WHAT
  IT WAS SUPPOSED TO DO?
                      Copyright © 2000 by Harcourt, Inc. All rights reserved
FACTORS INFLUENCING
       INTERNAL VALIDITY


• History      • Instrumentation

• Maturation   • Selection

• Testing      • Mortality



                    Copyright © 2000 by Harcourt, Inc. All rights reserved
ISOLATING EXTRANEOUS VARIATION
     WITH A CONTROL GROUP



      • History Effects

      • Maturation Effects

      • Mortality Effects


                            Copyright © 2000 by Harcourt, Inc. All rights reserved
Type of Extraneous Variable                Example

History - specific events in the       A Major Employer
Environment between the Before         Closes Its Plant in
and After Measurement That Are         Test Market Area
beyond the Experimenter’s Control

Maturation - subjects Change           Subjects Become
during the Course of the Experiment    Tired

Testing - The Before Measure Alerts    Questionnaire
or Sensitizes Subject to Nature of     about the Traditional
Experiment or Second Measure           Role of Women
                                       Triggers Enhanced
                                       Awareness of Women
                                       in an Experiment
                                      Copyright © 2000 by Harcourt, Inc. All rights reserved.
Instrument - Changes in         New Questions about
Instrument Result in Response   Women are Interpreted
Bias                            Differently from Earlier
                                Questions.

Selection - Sample Selection    Control Group and
Error Because of Differential   Experimental Group Is
Selection Comparison Groups     Self-Selected Group
                                Based on Preference for
                                Soft Drinks

Mortality - Sample Attrition;   Subjects in One Group
some Subjects Withdraw from     of a Hair Dying Study
Experiment                      Marry Rich Widows and
                                move to Florida
                                     Copyright © 2000 by Harcourt, Inc. All rights reserved.
HOW CAN INTERNAL
VALIDITY BE INCREASE?




             Copyright © 2000 by Harcourt, Inc. All rights reserved.
INCREASING INTERNAL VALIDITY


     • Control Group

     • Random Assignment

     • Pre-testing and Post-testing

     • Posttest Only


                          Copyright © 2000 by Harcourt, Inc. All rights reserved
WHAT ARE THE DIFFERENT
   BASIC EXPERIMENTAL
              DESIGNS?




              Copyright © 2000 by Harcourt, Inc. All rights reserved.
Quasi-Experimental Designs



 • One Shot Design (After Only)

 • One Group Pretest-Posttest

 • Static Group Design



                         Copyright © 2000 by Harcourt, Inc. All rights reserved
ONE SHOT DESIGN (AFTER ONLY)

          X   O1




                   Copyright © 2000 by Harcourt, Inc. All rights reserved
One Group Pretest-Posttest

   O1 X     O2




                    Copyright © 2000 by Harcourt, Inc. All rights reserved
Static Group Design

 Experimental Group                   X  O1
 Control Group                        O2



                      Copyright © 2000 by Harcourt, Inc. All rights reserved
Three Good Experimental Designs



• Pretest - Posttest Control Group

     Design

• Posttest Only Control Group

• Solomon Four Group Design

                           Copyright © 2000 by Harcourt, Inc. All rights reserved
Pretest-Posttest Control Group Design


 Experimental Group            R O1 X O2

 Control Group                 R O3 X O4




                        Copyright © 2000 by Harcourt, Inc. All rights reserved
Posttest Only Control Group


Experimental Group   R                       X             O1

Control Group        R                                    O2




                         Copyright © 2000 by Harcourt, Inc. All rights reserved
One-Shot Design
           Internal Validity Problems
• History            • Instrumentation
   – weak               – not relevant
• Maturation         • Selection
   – weak               – weak
• Testing            • Mortality
   – not relevant       – weak



                           Copyright © 2000 by Harcourt, Inc. All rights reserved
One-Group Pretest-Posttest
         Internal Validity Problems
• History          • Instrumentation
   – weak             – weak
• Maturation       • Selection
   – weak             – controlled
• Testing          • Mortality
   – weak             – controlled



                         Copyright © 2000 by Harcourt, Inc. All rights reserved
Static-Group Design
           Internal Validity Problems
• History                 • Instrumentation
   – controlled              – controlled
• Maturation              • Selection
   – possible source of      – weak
     concern              • Mortality
• Testing                    – weak
   – controlled


                                Copyright © 2000 by Harcourt, Inc. All rights reserved
Pretest-Posttest Control
          Internal Validity Problems
• History           • Instrumentation
   – controlled        – controlled
• Maturation        • Selection
   – controlled        – controlled
• Testing           • Mortality
   – controlled        – controlled



                          Copyright © 2000 by Harcourt, Inc. All rights reserved
Solomon Four-Group Design
        Internal Validity Problems
• History         • Instrumentation
   – controlled      – controlled
• Maturation      • Selection
   – controlled      – controlled
• Testing         • Mortality
   – controlled      – controlled



                        Copyright © 2000 by Harcourt, Inc. All rights reserved
Posttest-Only Control
          Internal Validity Problems
• History           • Instrumentation
   – controlled        – controlled
• Maturation        • Selection
   – controlled        – controlled
• Testing           • Mortality
   – controlled        – controlled



                          Copyright © 2000 by Harcourt, Inc. All rights reserved
Solomon four Group Design


Experimental Group 1:   R O1 X O 2
Control Group 1:        R O3   O4
Experimental Group 2:   R    X O5
Control Group 2:        R    X O6




                         Copyright © 2000 by Harcourt, Inc. All rights reserved
ADVANCED EXPERIMENTAL DESIGNS
                ARE MORE COMPLEX

•   COMPLETELY RANDOMIZED
•   RANDOMIZED BLOCK DESIGN
•   LATIN SQUARE
•   FACTORIAL




                      Copyright © 2000 by Harcourt, Inc. All rights reserved
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.


                            Copyright © 2000 by Harcourt, Inc. All rights reserved
Completely Randomized Designs

              Control: Experimental Experimental
              no music treatment:   treatment:
                       slow music   fast music
Average minutes 16        18                           12
shopper spends
in store




                               Copyright © 2000 by Harcourt, Inc. All rights reserved
INDEPENDENT VARIABLE A

  Level 1   Level 2             Level 3



  Group A   Group B          Group C




                      Copyright © 2000 by Harcourt, Inc. All rights reserved
Completely Randomized Design

With a pretest posttest
   Group A          R     O1   X1             O2

   Group A          R     O3   X2             O4

   Group A          R     O5   X3             O6



                               Copyright © 2000 by Harcourt, Inc. All rights reserved
Completely Randomized Design

With a posttest
   Group A        R   X1   O1

   Group B        R   X2   O2

   Group C        R   X3   O3



                           Copyright © 2000 by Harcourt, Inc. All rights reserved
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.


                               Copyright © 2000 by Harcourt, Inc. All rights reserved
Randomized Block Design
                                               Independent Variables


                                    Control:   Experimental             Experimental
                                    no music     treatment               treatment:
                                                slow music               fast music
Blocking variable




                    Mornings and
                    afternoons


                    Evening hours




                                                              Copyright © 2000 by Harcourt, Inc. All rights reserved
Factorial design


• An experiment that investigates the
  interaction of two or more variables on a
  single dependent variable.




                              Copyright © 2000 by Harcourt, Inc. All rights reserved
Independent Variable 1
                                      No Music   Slow Music                Fast Music
Independent Variable 2




                         No Music
                         cart signs



                           Grocery
                         cart signs




                                                          Copyright © 2000 by Harcourt, Inc. All rights reserved
Factorial Design -- Roller Skates


            Price   Red                Gold

            $25     Cell 1             Cell 4
            $30     Cell 2             Cell 5
            $35     Cell 3             Cell 6

Package Design


                             Copyright © 2000 by Harcourt, Inc. All rights reserved
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.




                              Copyright © 2000 by Harcourt, Inc. All rights reserved
2 x 2 Factorial Design



         Ad A           Ad B

  Men                                              65
                                                             > Main Effects
                                                               of Gender

Women                                              65

          70              60
                 >


           Main Effects of Ad

                            Copyright © 2000 by Harcourt, Inc. All rights reserved
Interaction Between Gender and Ad Copy
                       100

                       90
                                    Wo
                       80             me
                                          n
                       70
       Believability



                       60           Men

                       50

                       40

                       30

                       20

                       10
                             Ad A                                    Ad B
                                              Copyright © 2000 by Harcourt, Inc. All rights reserved
INDEPENDENT VARIABLE 1
                         Level 1          Level 2




               Level 1      Group A         Group B
INDEPENDENT
  VARIABLE 2




               Level 2                    Group D
                           Group C



                                      Copyright © 2000 by Harcourt, Inc. All rights reserved
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



                             Copyright © 2000 by Harcourt, Inc. All rights reserved
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



                           Copyright © 2000 by Harcourt, Inc. All rights reserved
A Test Market Experiment on Pricing

                           Sales in Units (thousands)
                     Regular Price       Reduced Price                  Cents-Off Coupon
                        $.99                 $.89                         Regular Price

Test Market A, B, or C     130                 145                                      153
Test Market D, E, or F     118                 143                                      129
Test Market G, H, or I      87                 120                                       96
Test Market J, K, or L      84                 131                                       99
Mean                     X1=104.75          X2=134.75                           X1=119.25
Grand Mean
                         X=119.58



                                                 Copyright © 2000 by Harcourt, Inc. All rights reserved
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.




                               Copyright © 2000 by Harcourt, Inc. All rights reserved
Order of Usage


SUBJECT                  1                 2                 3

                  1     A B C
                  2     B C A
                  3     C A B

                      Copyright © 2000 by Harcourt, Inc. All rights reserved
TEST MARKETING

   Not just trying           But scientific
   something                 testing
   out


Controlled experimentation



                         Copyright © 2000 by Harcourt, Inc. All rights reserved
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
                     Copyright © 2000 by Harcourt, Inc. All rights reserved
FUNCTONS OF
           TEST MARKETING



               IDENTIFY AND
ESTIMATE         CORRECT
OUTCOMES       WEAKNESSES
                 IN PLANS



                 Copyright © 2000 by Harcourt, Inc. All rights reserved
A Lengthy and Costly Procedure


  $$$$$             When not
                    to Test?



                                         How Long
          Loss of                         Should a
          Secrecy                        Test Last?

                      Copyright © 2000 by Harcourt, Inc. All rights reserved
SELECTING A TEST MARKET

•   POPULATION SIZE
•   DEMOGRAPHIC COMPOSITION
•   LIFESTYLE CONSIDERATIONS
•   COMPETITIVE SITUATION
•   MEDIA
•   SELF-CONTAINED TRADING AREA
•   OVERUSED MARKETS - SECRECY
                       Copyright © 2000 by Harcourt, Inc. All rights reserved
CONTROL METHOD
             OF TEST MARKETING

• SMALL CITY
• LOW CHANCE OF BEING DETECTED
• DISTRIBUTION IS FORCED
  (GUARANTEED)




                    Copyright © 2000 by Harcourt, Inc. All rights reserved
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


                             Copyright © 2000 by Harcourt, Inc. All rights reserved
SOME PROBLEMS ESTIMATING
                 SALES VOLUME
• OVERATTENTION
• UNREALISTIC STORE CONDITIONS
• READING COMPETIVE
  ENVIRONMENT INCORRECTLY
• INCORRECT VOLUME FORECASTS
  – ADJUSTED DATA
  – PENETRATION AND REPEAT PURCHASE RATE

• TIME LAPSE
                                  Copyright © 2000 by Harcourt, Inc. All rights reserved
High Tech
                       Test Markets

Electric
 Test
Markets
           Simulated
             Test
            Markets                     Virtual-reality
                                          Simulated
                                        Test Markets


                       Copyright © 2000 by Harcourt, Inc. All rights reserved

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Ch12 2

  • 1. Business Research Methods William G. Zikmund Chapter 12: Experimental Research
  • 2. Copyright © 2000 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777.
  • 3. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 4. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 5. The experimenter has some degree of control over the independent variable. The variable is independent because its value can be manipulated by the experimenter to whatever he or she wishes it to be. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 6. Experiment Treatment Alternative manipulations of the independent variable being investigated Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 7. Independent Variable • The experimenter controls independent variable. • The variable’s value can be manipulated by the experimenters to whatever they wish it to be. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 8. MANIPULATION OF INDEPENDENT VARIABLE •Classificatory Vs. Continuous Variables •Experimental and Control Groups •Treatment Levels •More Than One Independent Variable Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 9. Experimental treatments are the alternative manipulations of the independent variable being investigated. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 10. DEPENDENT VARIABLE • its value is expected to be dependent on the experimenter’s manipulation • criterion or standard by which the results are judged Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 11. DEPENDENT VARIABLE • SELECTION – e.g... sales volume, awareness, recall • MEASUREMENT Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 12. Dependent Variable • Selection - e.g., sales volume, awareness, recall • Measurement Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 13. The dependent variable is so called because its value is expected to be dependent on the experimenter’s manipulation; it is the criterion or standard by which the results are judged. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 14. TEST UNITS - subjects or entities whose response to the experimental treatment are measured or observed. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 15. Two Types of Experimental Error •Constant Error •Random Errors Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 16. TWO TYPES OF EXPERIMENTAL ERRORS • CONSTANT ERRORS • RANDOM ERRORS Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 17. FIELD VERSUS LABORATORY EXPERIMENTS Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 18. Controlling Extraneous Variables • Elimination of Extraneous Variables • Constancy of Conditions • Order of Presentation • Blinding • Random Assignment Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 19. How May an Experimenter control for Extraneous Variation? •Eliminate Extraneous Variables •Hold Conditions Constant •Randomization •Matching Subjects Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 20. Establishing Control Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 21. DEMAND CHARACTERISTICS • EXPERIMENTAL PROCEDURES THE INTENTIONALLY HINT TO SUBJECTS SOMETHING ABOUT THE EXPERIMENTER’S HYPOTHESIS Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 22. Demand Characteristics • Guinea Pigs • Hawthorne Effect Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 23. Field Vs. Laboratory Experiment Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 24. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 25. CONTROL GROUPS • Isolates Extraneous Variation Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 26. WHEN IS AN EXPERIMENT INTERNAL VALIDITY? • INTERNAL VALIDITY - THE ABILITY OF AN EXPERIMENT TO ANSWER THE QUESTION OF WHETHER THE EXPERIMENTAL TREATMENT WAS THE SOLE CAUSE OF CHANGES IN A DEPENDENT VARIABLE • DID THE MANIPULATION DO WHAT IT WAS SUPPOSED TO DO? Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 27. FACTORS INFLUENCING INTERNAL VALIDITY • History • Instrumentation • Maturation • Selection • Testing • Mortality Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 28. ISOLATING EXTRANEOUS VARIATION WITH A CONTROL GROUP • History Effects • Maturation Effects • Mortality Effects Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 29. Type of Extraneous Variable Example History - specific events in the A Major Employer Environment between the Before Closes Its Plant in and After Measurement That Are Test Market Area beyond the Experimenter’s Control Maturation - subjects Change Subjects Become during the Course of the Experiment Tired Testing - The Before Measure Alerts Questionnaire or Sensitizes Subject to Nature of about the Traditional Experiment or Second Measure Role of Women Triggers Enhanced Awareness of Women in an Experiment Copyright © 2000 by Harcourt, Inc. All rights reserved.
  • 30. Instrument - Changes in New Questions about Instrument Result in Response Women are Interpreted Bias Differently from Earlier Questions. Selection - Sample Selection Control Group and Error Because of Differential Experimental Group Is Selection Comparison Groups Self-Selected Group Based on Preference for Soft Drinks Mortality - Sample Attrition; Subjects in One Group some Subjects Withdraw from of a Hair Dying Study Experiment Marry Rich Widows and move to Florida Copyright © 2000 by Harcourt, Inc. All rights reserved.
  • 31. HOW CAN INTERNAL VALIDITY BE INCREASE? Copyright © 2000 by Harcourt, Inc. All rights reserved.
  • 32. INCREASING INTERNAL VALIDITY • Control Group • Random Assignment • Pre-testing and Post-testing • Posttest Only Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 33. WHAT ARE THE DIFFERENT BASIC EXPERIMENTAL DESIGNS? Copyright © 2000 by Harcourt, Inc. All rights reserved.
  • 34. Quasi-Experimental Designs • One Shot Design (After Only) • One Group Pretest-Posttest • Static Group Design Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 35. ONE SHOT DESIGN (AFTER ONLY) X O1 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 36. One Group Pretest-Posttest O1 X O2 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 37. Static Group Design Experimental Group X O1 Control Group O2 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 38. Three Good Experimental Designs • Pretest - Posttest Control Group Design • Posttest Only Control Group • Solomon Four Group Design Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 39. Pretest-Posttest Control Group Design Experimental Group R O1 X O2 Control Group R O3 X O4 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 40. Posttest Only Control Group Experimental Group R X O1 Control Group R O2 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 41. One-Shot Design Internal Validity Problems • History • Instrumentation – weak – not relevant • Maturation • Selection – weak – weak • Testing • Mortality – not relevant – weak Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 42. One-Group Pretest-Posttest Internal Validity Problems • History • Instrumentation – weak – weak • Maturation • Selection – weak – controlled • Testing • Mortality – weak – controlled Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 43. Static-Group Design Internal Validity Problems • History • Instrumentation – controlled – controlled • Maturation • Selection – possible source of – weak concern • Mortality • Testing – weak – controlled Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 44. Pretest-Posttest Control Internal Validity Problems • History • Instrumentation – controlled – controlled • Maturation • Selection – controlled – controlled • Testing • Mortality – controlled – controlled Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 45. Solomon Four-Group Design Internal Validity Problems • History • Instrumentation – controlled – controlled • Maturation • Selection – controlled – controlled • Testing • Mortality – controlled – controlled Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 46. Posttest-Only Control Internal Validity Problems • History • Instrumentation – controlled – controlled • Maturation • Selection – controlled – controlled • Testing • Mortality – controlled – controlled Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 47. Solomon four Group Design Experimental Group 1: R O1 X O 2 Control Group 1: R O3 O4 Experimental Group 2: R X O5 Control Group 2: R X O6 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 48. ADVANCED EXPERIMENTAL DESIGNS ARE MORE COMPLEX • COMPLETELY RANDOMIZED • RANDOMIZED BLOCK DESIGN • LATIN SQUARE • FACTORIAL Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 49. 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. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 50. Completely Randomized Designs Control: Experimental Experimental no music treatment: treatment: slow music fast music Average minutes 16 18 12 shopper spends in store Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 51. INDEPENDENT VARIABLE A Level 1 Level 2 Level 3 Group A Group B Group C Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 52. Completely Randomized Design With a pretest posttest Group A R O1 X1 O2 Group A R O3 X2 O4 Group A R O5 X3 O6 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 53. Completely Randomized Design With a posttest Group A R X1 O1 Group B R X2 O2 Group C R X3 O3 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 54. 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. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 55. Randomized Block Design Independent Variables Control: Experimental Experimental no music treatment treatment: slow music fast music Blocking variable Mornings and afternoons Evening hours Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 56. Factorial design • An experiment that investigates the interaction of two or more variables on a single dependent variable. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 57. Independent Variable 1 No Music Slow Music Fast Music Independent Variable 2 No Music cart signs Grocery cart signs Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 58. Factorial Design -- Roller Skates Price Red Gold $25 Cell 1 Cell 4 $30 Cell 2 Cell 5 $35 Cell 3 Cell 6 Package Design Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 59. 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. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 60. 2 x 2 Factorial Design Ad A Ad B Men 65 > Main Effects of Gender Women 65 70 60 > Main Effects of Ad Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 61. Interaction Between Gender and Ad Copy 100 90 Wo 80 me n 70 Believability 60 Men 50 40 30 20 10 Ad A Ad B Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 62. INDEPENDENT VARIABLE 1 Level 1 Level 2 Level 1 Group A Group B INDEPENDENT VARIABLE 2 Level 2 Group D Group C Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 63. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 64. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 65. A Test Market Experiment on Pricing Sales in Units (thousands) Regular Price Reduced Price Cents-Off Coupon $.99 $.89 Regular Price Test Market A, B, or C 130 145 153 Test Market D, E, or F 118 143 129 Test Market G, H, or I 87 120 96 Test Market J, K, or L 84 131 99 Mean X1=104.75 X2=134.75 X1=119.25 Grand Mean X=119.58 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 66. 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. Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 67. Order of Usage SUBJECT 1 2 3 1 A B C 2 B C A 3 C A B Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 68. TEST MARKETING Not just trying But scientific something testing out Controlled experimentation Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 69. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 70. FUNCTONS OF TEST MARKETING IDENTIFY AND ESTIMATE CORRECT OUTCOMES WEAKNESSES IN PLANS Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 71. A Lengthy and Costly Procedure $$$$$ When not to Test? How Long Loss of Should a Secrecy Test Last? Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 72. SELECTING A TEST MARKET • POPULATION SIZE • DEMOGRAPHIC COMPOSITION • LIFESTYLE CONSIDERATIONS • COMPETITIVE SITUATION • MEDIA • SELF-CONTAINED TRADING AREA • OVERUSED MARKETS - SECRECY Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 73. CONTROL METHOD OF TEST MARKETING • SMALL CITY • LOW CHANCE OF BEING DETECTED • DISTRIBUTION IS FORCED (GUARANTEED) Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 74. 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 Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 75. SOME PROBLEMS ESTIMATING SALES VOLUME • OVERATTENTION • UNREALISTIC STORE CONDITIONS • READING COMPETIVE ENVIRONMENT INCORRECTLY • INCORRECT VOLUME FORECASTS – ADJUSTED DATA – PENETRATION AND REPEAT PURCHASE RATE • TIME LAPSE Copyright © 2000 by Harcourt, Inc. All rights reserved
  • 76. High Tech Test Markets Electric Test Markets Simulated Test Markets Virtual-reality Simulated Test Markets Copyright © 2000 by Harcourt, Inc. All rights reserved