Experimental research involves manipulating an independent variable and measuring its effect on a dependent variable while controlling for extraneous variables. There are various experimental designs including completely randomized designs, randomized block designs, Latin square designs, and factorial designs. Test marketing is a type of experimental research conducted in realistic market conditions to estimate outcomes and identify weaknesses in new product or marketing plan ideas before broader implementation.

1. Business
Research Methods
William G. Zikmund
Chapter 12:
Experimental Research

2. 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

3. 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

4. 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.

5. Experiment Treatment
Alternative manipulations of the
independent variable being
investigated

6. Independent Variable
• The experimenter controls
independent variable.
• The variable’s value can be
manipulated by the experimenters to
whatever they wish it to be.

7. Manipulation of Independent Variable
• Classificatory Vs. continuous variables
• Experimental and control groups
• Treatment levels
• More than one independent variable

8. Experimental Treatments
• The alternative manipulations of the
independent variable being investigated

9. Dependent Variable
• Its value is expected to be dependent
on the experimenter’s manipulation
• Criterion or standard by which the
results are judged

10. Dependent Variable
• Selection
–e.g... sales volume, awareness, recall,
• Measurement

11. Test Units
• Subjects or
entities whose
response to the
experimental
treatment are
measured or
observed.

12. Two Types of Experimental Error
• Constant errors
• Random errors

13. Field versus
Laboratory Experiments

14. Controlling Extraneous Variables
• Elimination of extraneous variables
• Constancy of conditions
• Order of presentation
• Blinding
• Random assignment

15. How May an Experimenter control for
Extraneous Variation?
• Eliminate Extraneous Variables
• Hold Conditions Constant
• Randomization
• Matching Subjects

16. Establishing Control

17. Demand Characteristics
• Experimental procedures that intentionally
hint to subjects something about the
experimenter’s hypothesis

18. Demand Characteristics
• Guinea pig effect
• Hawthorne effect

19. Field Vs. Laboratory Experiment

20. Laboratory Experiment Field Experiment
Artificial-Low Realism
Few Extraneous
Variables
High control
Low Cost
Short Duration
Subjects Aware of
Participation
Natural-High Realism
Many Extraneous
Variables
Low control
High Cost
Long Duration
Subjects Unaware of
Participation

21. Control Groups
Isolate
extraneous
variation

22. 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
variable
Did the manipulation do what it was
supposed to do?

23. Factors Influencing Internal
Validity
• History
• Maturation
• Testing
• Instrumentation
• Selection
• Mortality

24. Isolating Extraneous Variation
with a Control Group
• History Effects
• Maturation Effects
• Mortality Effects

25. Type of Extraneous Variable Example
History - Specific events in the
environment between the Before
and After measurement that are
beyond the experimenter’s control
Maturation - Subjects change
during the course of the experiment
Testing - The Before measure alerts
or sensitizes subject to nature of
experiment or second measure.
A major employer
closes its plant in
test market area
Subjects become
tired
Questionnaire
about the traditional
role of women
triggers enhanced
awareness of women
in an experiment.

26. Instrument - Changes in
instrument result in response bias
Selection - Sample selection
error because of differential
selection comparison groups
Mortality - Sample attrition; some
subjects withdraw from experiment
New questions about
women are interpreted
differently from earlier
questions.
Control group and
experimental group is
self-selected group
based on preference for
soft drinks
Subjects in one group
of a hair dying study
marry rich widows and
move to Florida

27. How can Internal Validity
Increase?

28. Increasing Internal Validity
• Control group
• Random assignment
• Pretesting and posttesting
• Posttest only

29. What are the Different Basic
Experimental Designs?

30. Quasi-Experimental Designs
• One Shot Design (After Only)
• One Group Pretest-Posttest
• Static Group Design

31. One Shot Design (After Only)
X O1

32. One Group Pretest-Posttest
O1 X O2

33. Static Group Design
Experimental Group X O1
Control Group O2

34. Three Good Experimental Designs
• Pretest - Posttest Control Group Design
• Posttest Only Control Group
• Solomon Four Group Design

35. Pretest-Posttest Control Group Design
Experimental Group R O1 X O2
Control Group R O3 X O4

36. Posttest Only Control Group
Experimental Group R X O1
Control Group R O2

37. One-Shot Design
Internal Validity Problems
• History
– weak
• Maturation
– weak
• Testing
– not relevant
• Instrumentation
– not relevant
• Selection
– weak
• Mortality
– weak

38. One-Group Pretest-Posttest
Internal Validity Problems
• History
– weak
• Maturation
– weak
• Testing
– weak
• Instrumentation
– weak
• Selection
– controlled
• Mortality
– controlled

39. Static-Group Design
Internal Validity Problems
• History
– controlled
• Maturation
– possible source of
concern
• Testing
– controlled
• Instrumentation
– controlled
• Selection
– weak
• Mortality
– weak

40. Pretest-Posttest Control
Internal Validity Problems
• History
– controlled
• Maturation
– controlled
• Testing
– controlled
• Instrumentation
– controlled
• Selection
– controlled
• Mortality
– controlled

41. Solomon Four-Group Design
Internal Validity Problems
• History
– controlled
• Maturation
– controlled
• Testing
– controlled
• Instrumentation
– controlled
• Selection
– controlled
• Mortality
– controlled

42. Posttest-Only Control
Internal Validity Problems
• History
– controlled
• Maturation
– controlled
• Testing
– controlled
• Instrumentation
– controlled
• Selection
– controlled
• Mortality
– controlled

43. Solomon Four Group Design
Experimental Group 1: R O1 X O2
Control Group 1: R O3 O4
Experimental Group 2: R X O5
Control Group 2: R X O6

44. Advanced Experimental Designs are
More Complex
• Completely randomized
• Randomized block design
• Latin square
• Factorial

45. 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.

46. Completely Randomized Designs
Average minutes
shopper spends
in store
Control:
no music
Experimental
treatment:
slow music
Experimental
treatment:
fast music
16 18 12

47. Independent Variable A
Level 1 Level 2 Level 3
Group A Group B Group C

48. 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

49. Completely Randomized Design
With a posttest
Group A R X1 O1
Group B R X2 O2
Group C R X3 O3

50. 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.

51. Independent Variables
Control:
no music
Experimental
treatment
slow music
Experimental
treatment:
fast music
Mornings and
afternoons
Evening hours
Blocking variable
Randomized Block Design

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

53. Independent Variable 1
No Music
cart signs
No Music Slow Music Fast Music
Grocery
cart signs
Independent Variable 2

54. Factorial Design -- Roller Skates
Package Design
Price Red Gold
$25 Cell 1 Cell 4
$30 Cell 2 Cell 5
$35 Cell 3 Cell 6

55. Effects
• Main effect
• The influence of a single
independent variable
on a dependent
variable.
• Interaction effect
• The influence on a
dependent variable by
combinations of two or
more independent
variables.

56. 2 x 2 Factorial Design
Men
Women
Ad A Ad B
65
65
70 60
Main Effects
of Gender
Main Effects of Ad
>
>

57. 100
90
80
70
60
50
40
30
20
10
Women
Men
Ad A Ad B
Believability
Interaction Between Gender and
Advertising Copy

58. Level 1 Level 2
Level 1
Level 2
Group A
Group B
Group C Group D
Independent
Variable 2
Independent Variable 1

59. 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

60. 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

61. A Test Market Experiment
on Pricing
Sales in Units (thousands)
Regular Price
$.99
130
118
87
84
X1=104.75
X=119.58
Reduced Price
$.89
145
143
120
131
X2=134.75
Cents-Off Coupon
Regular Price
153
129
96
99
X1=119.25
Test Market A, B, or C
Test Market D, E, or F
Test Market G, H, or I
Test Market J, K, or L
Mean
Grand Mean

62. 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.

63. Order of Usage
1 2 3
1 A B C
2 B C A
3 C A B
SUBJECT

64. TEST MARKETING
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65. Test Marketing
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66. 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.

67. Functions of
Test Marketing
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68. A Lengthy and Costly Procedure
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69. Popular Test Markets
• Pittsfield,
Massachusetts
• Charlotte, North
Carolina
• Columbus, Ohio
• Little Rock, Arkansas
• Evansville, Indiana
• Cedar Rapids, Iowa
• Eau Claire,Wisconsin
• Wichita, Kansas
• Tulsa, Oklahoma
• Omaha, Nebraska
• Grand Junction.
Colorado
• Wichita Falls, Texas
• Odessa-Midland, Texas

70. Selecting a Test Market
• Population size
• Demographic composition
• Lifestyle considerations
• Competitive situation
• Media
• Self-contained trading area
• Overused markets - secrecy

71. Control Method of Test Marketing
• Small city
• Low chance of being detected
• Distribution is forced (guaranteed)

72. 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

73. 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

74. High Tech Test Markets
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