Business Research Methods

William G. Zikmund

Chapter 12: Experimental Research

ExperimentA research investigation in which conditions are controlledOne or more independent variable(s) is /are manipulated The effect on a dependent variable is measuredTo test a hypothesis

Basic Issues of Experimental DesignManipulation of the Independent VariableSelection of Dependent VariableAssignment of Subjects (or other Test Units)Control Over Extraneous Variables

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.

Experiment TreatmentAlternative manipulations of the independent variable being investigated

Independent VariableThe experimenter controls the independent variable.The variables value can be manipulated by the experimenters to whatever they wish it to be.

Manipulation of Independent VariableClassificatory Vs. continuous variablesExperimental and control groupsTreatment levelsMore than one independent variable

Experimental Treatments The alternative manipulations of the independent variable being investigated

Dependent VariableIts value is expected to be dependent on the experimenters manipulationCriterion or standard by which the results are judged

Dependent VariableSelectione.g... sales volume, awareness, recall,Measurement

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

Two Types of Experimental ErrorRandom errorExperimental bias

Field versus Laboratory Experiments

Controlling Extraneous VariablesElimination of extraneous variablesConstancy of conditionsOrder of presentationBlindingRandom assignment

How May an Experimenter control forExtraneous Variation?Eliminate Extraneous VariablesHold Conditions ConstantRandomizationMatching Subjects

Establishing Control

Demand CharacteristicsExperimental procedures that intentionally hint to subjects something about the experimenters hypothesis

Demand Characteristics Guinea pig effect Hawthorne effect

Field Vs. Laboratory Experiment

Laboratory ExperimentField ExperimentArtificial-Low RealismFew ExtraneousVariablesHigh controlLow CostShort DurationSubjects Aware ofParticipationNatural-High RealismMany ExtraneousVariablesLow controlHigh CostLong DurationSubjects Unaware ofParticipation

Control Groups Isolate extraneous variation

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?

Factors Influencing Internal Validity History Maturation Testing Instrumentation Selection Mortality

Isolating Extraneous Variationwith a Control GroupHistory EffectsMaturation EffectsMortality Effects

Type of Extraneous VariableExampleHistory - Specific events in theenvironment between the Beforeand After measurement that are beyond the experimenters control

Maturation - Subjects changeduring the course of the experiment

Testing - The Before measure alertsor sensitizes subject to nature of experiment or second measure. A major employercloses its plant intest market area

Subjects become tired

Questionnaireabout the traditionalrole of women triggers enhanced awareness of womenin an experiment.

Instrument - Changes ininstrument result in response bias

Selection - Sample selectionerror because of differentialselection comparison groups

Mortality - Sample attrition; some subjects withdraw from experimentNew questions aboutwomen are interpreteddifferently from earlierquestions.

Control group and experimental group isself-selected groupbased on preference forsoft drinks

Subjects in one groupof a hair dying study marry rich widows and move to Florida

How can Internal Validity Increase?

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

What are the Different Basic Experimental Designs?

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

One Shot Design (After Only)

XO1

One Group Pretest-Posttest

O1X O2

Static Group Design

Experimental GroupX O1 Control Group O2

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

Posttest Only Control GroupExperimental Group R X O1

Control Group R O2

Pretest-Posttest Control Group DesignExperimental Group R O1 X O2

Control Group R O3 O4

Solomon Four Group DesignExperimental Group 1: R O1 X O2Control Group 1: R O3 O4Experimental Group 2: R X O5Control Group 2: R O6

One-Shot DesignInternal Validity ProblemsHistoryweakMaturationweakTestingnot relevant

Instrumentationnot relevantSelectionweakMortalityweak

One-Group Pretest-PosttestInternal Validity ProblemsHistoryweakMaturationweakTestingweak

InstrumentationweakSelectioncontrolledMortalitycontrolled

Static-Group DesignInternal Validity ProblemsHistorycontrolledMaturationpossible source of concernTestingcontrolled

InstrumentationcontrolledSelectionweakMortalityweak

Pretest-Posttest ControlInternal Validity ProblemsHistorycontrolledMaturationcontrolledTestingcontrolled

InstrumentationcontrolledSelectioncontrolledMortalitycontrolled

Solomon Four-Group DesignInternal Validity ProblemsHistorycontrolledMaturationcontrolledTestingcontrolled

InstrumentationcontrolledSelectioncontrolledMortalitycontrolled

Posttest-Only ControlInternal Validity ProblemsHistorycontrolledMaturationcontrolledTestingcontrolled

InstrumentationcontrolledSelectioncontrolledMortalitycontrolled

Advanced Experimental Designs are More ComplexCompletely randomizedRandomized block designLatin squareFactorial

Completely Randomized DesignAn 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 DesignsAverage minutesshopper spendsin storeControl:no musicExperimentaltreatment:slow musicExperimentaltreatment:fast music161812

Independent Variable AGroup AGroup BGroup CLevel 1Level 2Level 3

Completely Randomized DesignWith a pretest posttestGroup ARO1X1O2

Group BRO3X2O4

Group CRO5X3O6

With a posttestGroup ARX1O1

Group BRX2O2

Group CRX3O3Completely Randomized Design

Randomized Block DesignAn 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.

Independent VariablesControl:no musicExperimentaltreatmentslow musicExperimentaltreatment: fast musicMornings andafternoons

Evening hoursBlocking variableRandomized Block Design

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

Independent Variable 1No Musiccart signsSlow MusicFast MusicNo MusicGrocerycart signsIndependent Variable 2

PriceRedGold

$25Cell 1Cell 4$30Cell 2Cell 5$35Cell 3Cell 6Package DesignFactorial Design -- Roller Skates

EffectsMain effectThe influence of a single independent variable on a dependent variable.Interaction effectThe influence on a dependent variable by combinations of two or more independent variables.

Men

WomenAd A Ad B65

657060Main Effectsof GenderMain Effects of Ad>>2 x 2 Factorial Design

Interaction Between Gender and Advertising Copy

Level 1 Level 2Level 1

Level 2Group AGroup DGroup CGroup BIndependent Variable 2Independent Variable 1

Group ARO1X11O2

Group BRO3X21O4

Group CRO5X12O6

Group DRO7X22O82 x 2 Factorial with a Pretest Posttest

Group ARX11O1

Group BRX21O2

Group CRX12O3

Group DRX22O42 x 2 Factorial Design with a Posttest Measure

A Test Market Experiment on PricingSales in Units (thousands)Regular Price$.99

1301188784

X1=104.75X=119.58Reduced Price$.89

145143120131

X2=134.75

Cents-Off CouponRegular Price

1531299699

X1=119.25

Test Market A, B, or CTest Market D, E, or FTest Market G, H, or ITest Market J, K, or L

MeanGrand Mean

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.

1 2 3

1ABC2BCA3CAB

Order of UsageSUBJECT

TEST MARKETING

Controlled experimentationNot just tryingsomethingoutBut scientifictesting

Controlled experimentationNot just tryingsomethingoutBut scientifictestingTest Marketing

Test MarketingAn 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.

ESTIMATEOUTCOMESIDENTIFY ANDCORRECTWEAKNESSESIN PLANSFunctions of Test Marketing

A Lengthy and Costly Procedure

Popular Test MarketsPittsfield, MassachusettsCharlotte, North CarolinaColumbus, OhioLittle Rock, ArkansasEvansville, Indiana Cedar Rapids, IowaEau Claire,WisconsinWichita, KansasTulsa, Oklahoma Omaha, NebraskaGrand Junction. ColoradoWichita Falls, TexasOdessa-Midland, Texas

Selecting a Test MarketPopulation sizeDemographic compositionLifestyle considerationsCompetitive situationMediaSelf-contained trading areaOverused markets - secrecy

Control Method of Test MarketingSmall cityLow chance of being detectedDistribution is forced (guaranteed)

The Advantages of Using the Control Method of Test MarketingReduced costs Shorter time period needed for reading test market resultsIncreased secrecy from competitorsNo distraction of company salespeople from regular product lines

Some Problems Estimating Sales VolumeOver-attentionUnrealistic store conditionsReading competitive environment incorrectlyIncorrect volume forecastsAdjusted dataPenetration and repeat purchase rateTime lapse

High Tech Test MarketsElectricTestMarketsSimulatedTestMarketsVirtual-realitySimulatedTest Markets

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