part 1. course syllabus/outline course syllabus/outline

PART 1PART 1

COURSE SYLLABUS/OUTLINECOURSE SYLLABUS/OUTLINE

Introduction to Marketing Introduction to Marketing ResearchResearch

Dr. DohertyDr. Doherty

Tobin College of BusinessTobin College of Business

St. John’s UniversitySt. John’s University

MARKETING CASE REPORT MARKETING CASE REPORT FORMATFORMAT

A.A. Executive Summary: Self-Executive Summary: Self-Contained Document, Contained Document, one to two one to two pagespages

• Statement of Purpose and Issues to be Statement of Purpose and Issues to be AddressedAddressed

• Research Method Used to Address Research Method Used to Address IssuesIssues

• Salient FindingsSalient Findings

(Appears before Table of Contents)(Appears before Table of Contents)

B.B. Table of ContentsTable of Contents• Subject and Page Numbers Including All Subject and Page Numbers Including All

Exhibit ReferencesExhibit References

I.I. IntroductionIntroduction BackgroundBackground Purpose and/or Problem DefinitionPurpose and/or Problem Definition Objectives of ReportObjectives of Report

II.II. MethodologyMethodology Specific Methodology – Why!!!Specific Methodology – Why!!! Data/Information to be StudiedData/Information to be Studied

III.III. Case AnalysisCase Analysis Application of Specific Methodology to CaseApplication of Specific Methodology to Case Discussion/Explanation of AnalysisDiscussion/Explanation of Analysis Interpretation of Tables and Charts. (It is Interpretation of Tables and Charts. (It is notnot

acceptable to merely refer to Tables, e.g., see Table acceptable to merely refer to Tables, e.g., see Table X)X)

IV.IV. Findings and/or ConclusionsFindings and/or Conclusions

V.V. AppendicesAppendices

VI.VI. Other RequirementsOther Requirements Paragraph and Sub Paragraph headingsParagraph and Sub Paragraph headings Identification of all exhibits which are to Identification of all exhibits which are to

be explained and referenced in textbe explained and referenced in text No Misspellings!!!!No Misspellings!!!! Proper GrammarProper Grammar Interesting StyleInteresting Style On Time Delivery of Oral and Written On Time Delivery of Oral and Written

ReportReport

Marketing Research and the Four PsMarketing Research and the Four Ps1.1. ProductsProducts

New ProductsNew Products Evaluating Packaging and Brand DesignsEvaluating Packaging and Brand Designs Compassion Studies With Competitor’s ProductsCompassion Studies With Competitor’s Products Consumer Evaluation of Current ProductsConsumer Evaluation of Current Products

2.2. Place (Distribution Channels)Place (Distribution Channels) Analysis of Different Storage or Transportation MethodsAnalysis of Different Storage or Transportation Methods Analysis of Alternative SitesAnalysis of Alternative Sites Determination Of Inventory LevelsDetermination Of Inventory Levels Growth Rates of Different ChannelsGrowth Rates of Different Channels

3.3. PromotionPromotion Testing Different Ad. MessagesTesting Different Ad. Messages Establishing Sales TerritoriesEstablishing Sales Territories Selecting MediaSelecting Media Evaluating Ad. EffectivenessEvaluating Ad. Effectiveness

4.4. PricingPricing

Research on MarketsResearch on MarketsForecasting DemandForecasting DemandProviding Information of General TrendsProviding Information of General TrendsProviding Information For Segmenting Providing Information For Segmenting

MarketsMarketsDeveloping Customer ProfilesDeveloping Customer ProfilesIdentifying New Markets For Existing Identifying New Markets For Existing

ProductsProductsIdentifying New Product NeedsIdentifying New Product NeedsForeign MarketsForeign Markets

Elements Of The Marketing Mix That Elements Of The Marketing Mix That Compose A Cohesive Marketing ProgramCompose A Cohesive Marketing Program

Marketing Manager

ProductFeaturesBrand namePackagingServiceWarranty

PriceList priceDiscountsAllowancesCredit termsPayment period

PromotionAdvertisingPersonal sellingSales promotionPublicity

PlaceOutletsChannelsCoverageTransportationStock level

Product

Promotion

Price Place

Marketing System ModelMarketing System Model

Dependent Variables (X)Dependent Variables (X)

Controllable (XI)Controllable (XI)

Environmental (X2)Environmental (X2)

EtcEtc

Independent Variables (Y)

Behavorial (YI)

Sales

Demand

Psychological:

Preference

Intentions

Liking

Awareness

Performance Measures (Y2)

Market Share

Profits

Cash Flow

ROE

ROI

P/E

Brand Equity

Marketing ResearchMarketing Research

Three Generic ApproachesThree Generic ApproachesI.I. ExploratoryExploratoryII.II. DescriptiveDescriptiveIII.III. Causal/ExperimentalCausal/Experimental

Applications: See Tables 1 and 2

Definition:A scientific approach to(a) the collection; (b) analysis; and (c) presentation

of data/information to be used in the management decision making process

Exploratory ResearchExploratory Research When:When:

• Problem Not Well DefinedProblem Not Well Defined• No Working HypothesisNo Working Hypothesis• Little to No Relevant InformationLittle to No Relevant Information

Purpose:Purpose:• Identifying Information SourcesIdentifying Information Sources• Identifying Potential CausesIdentifying Potential Causes• Develop HypothesisDevelop Hypothesis• Clarify ConceptsClarify Concepts• Familiarize Analyst with the ProblemFamiliarize Analyst with the Problem• Formulate the Problem for a More Precise Formulate the Problem for a More Precise

InvestigationInvestigation

The Exploratory ApproachThe Exploratory Approach

Purpose: Identify Potential Relevant Factors Purpose: Identify Potential Relevant Factors (Don’t try to solve the problem!)(Don’t try to solve the problem!)

Develop HypothesisDevelop Hypothesis Establish priorities for further researchEstablish priorities for further research Identify information and data sourcesIdentify information and data sources Clarify conceptsClarify concepts Increase analysts’ familiarity with Increase analysts’ familiarity with

problem(s)problem(s) Identify potential causesIdentify potential causes

The Exploratory ApproachThe Exploratory Approach

Five Popular Exploratory Approaches:Five Popular Exploratory Approaches:

1)1) Literature SearchLiterature Search

2)2) Experience SurveyExperience Survey

3)3) Analysis of Selected CasesAnalysis of Selected Cases

4)4) Focus GroupsFocus Groups

5)5) ““Small” Sample/Surveys/InterviewsSmall” Sample/Surveys/Interviews

The Descriptive ApproachThe Descriptive Approach

Purpose: Test HypothesisPurpose: Test Hypothesis Analyze DataAnalyze Data Develop Findings/ConclusionsDevelop Findings/Conclusions

Two Types (Depending on Type of Data)Two Types (Depending on Type of Data)A.A. Longitudinal (Time Series)Longitudinal (Time Series) True PanelTrue Panel Omnibus PanelOmnibus Panel

B.B. Cross SectionalCross Sectional Field SurveyField Survey Field StudyField Study

True Panel ApplicationTrue Panel Application

The Brand Switching Matrix or Turnover The Brand Switching Matrix or Turnover Table (see your textbook!)Table (see your textbook!)

Brand T1 T2A 200 250B 300 270C 350 330D 150 150

Total 1000 1000

Time Period Brand A B C D TotalA 175 25 0 0 200

(.875)B 0 225 50 25 300

(.750)C 0 0 280 70 350

(.800)D 75 20 0 55 150

(.367)Total 250 270 330 150 1000

Time (T1)

Time (T2)

Applications of Turnover TableApplications of Turnover Table

Evaluating:Evaluating:a)a) Price ChangesPrice Changes

b)b) Promotional CampaignsPromotional Campaigns

c)c) New PackagingNew Packaging

d)d) New ProductsNew Products

e)e) Results can be integrated with other Results can be integrated with other databases to determine customer databases to determine customer profiles and media habitsprofiles and media habits

Causal/ExperimentalCausal/ExperimentalResearch DesignResearch Design

1.1. Scientific CriteriaScientific Criteria• Concomitant VariationConcomitant Variation• Time SequenceTime Sequence• Elimination of Other CausesElimination of Other Causes

2.2. Controlled ExperimentControlled Experiment• Reflects 1.Reflects 1.• Lab vs. FieldLab vs. Field• ValidationValidation• Two Groups: Experimental and ControlTwo Groups: Experimental and Control

3.3. Basic Concepts DefinedBasic Concepts Defined• Experiment : ProcessExperiment : Process• Treatments : AlternativesTreatments : Alternatives• Test Units : EntitiesTest Units : Entities• Dependent Variables : MeasuresDependent Variables : Measures• Extraneous VariablesExtraneous Variables

Hold ConstantHold Constant Randomize Assignment of TreatmentsRandomize Assignment of Treatments Specific DesignSpecific Design ANCOVAANCOVA

Types of Evidence That Support a Types of Evidence That Support a Causal InferenceCausal Inference

Concomitant Variation– evidence of the extent to Concomitant Variation– evidence of the extent to which X and Y occur together or vary together in which X and Y occur together or vary together in the way predicted by the hypothesisthe way predicted by the hypothesis

Time order of occurrence of variables- Time order of occurrence of variables- evidence evidence that shows X occurs before Ythat shows X occurs before Y

Elimination of other possible causal factors- Elimination of other possible causal factors- evidence that allows the elimination of factors evidence that allows the elimination of factors other than X as the cause of Yother than X as the cause of Y

X– the presumed causeX– the presumed causeY– the presumed effectY– the presumed effect

Types of ExperimentsTypes of Experiments

Scientific investigation in which an investigator manipulates and controls one or more independent variables and observes the dependent variable for variation concomitant to the manipulation of the independent variables

Experiment

Laboratory Experiment

Research investigation in which investigator creates a situation with exact conditions so as to control some, and manipulate other, variables.

Field Experiment

Research study in a realistic situation in which one or more independent variables are manipulated by the experimenter under as carefully controlled conditions as the situation will permit.

Types of Extraneous Factors That Can Contaminate Types of Extraneous Factors That Can Contaminate Research ResultsResearch Results

HistoryHistory—Specific events external to an experiment, —Specific events external to an experiment, but occurring at the same time, which may affect but occurring at the same time, which may affect the criterion or response variable.the criterion or response variable.

MaturationMaturation—Processes operating within the test —Processes operating within the test units in an experiment as a function of the passage units in an experiment as a function of the passage of time per se.of time per se.

TestingTesting—Contaminating effect in an experiment due —Contaminating effect in an experiment due to the fact that the process of experimentation to the fact that the process of experimentation itself affected the observed response.itself affected the observed response.

Main testing effectMain testing effect—The impact of a prior —The impact of a prior observation on a later observation.observation on a later observation.

Interactive testing effectInteractive testing effect—The condition —The condition when a prior measurement affects the test unit’s when a prior measurement affects the test unit’s response to the experimental variable.response to the experimental variable.

Types of Extraneous Factors That Can Types of Extraneous Factors That Can Contaminate Research ResultsContaminate Research Results

Instrument VariationInstrument Variation —Any and all changes in —Any and all changes in the measuring device used in an experiment that the measuring device used in an experiment that might account for differences in two or more might account for differences in two or more measurements.measurements.

Statistical RegressionStatistical Regression —Tendency of extreme —Tendency of extreme cases of a phenomenon to move toward a more cases of a phenomenon to move toward a more central position during the course of an central position during the course of an experiment.experiment.

Selection BiasSelection Bias —Contaminating influence in an —Contaminating influence in an experiment occurring when there is no way of experiment occurring when there is no way of certifying that groups of test units were certifying that groups of test units were equivalent at some prior time.equivalent at some prior time.

Experimental MortalityExperimental Mortality —Experimental condition —Experimental condition in which test units are lost during the course of an in which test units are lost during the course of an experiment.experiment.


7.7. Pre-Exp. Design (3)Pre-Exp. Design (3)a.a. After Only: X OAfter Only: X O

b.b. Before After: O X OBefore After: O X O

c.c. Static Group Comparisons: X OStatic Group Comparisons: X O11 O O22

Major Errors: H, SBMajor Errors: H, SB


R ExpR Exp OO11 XX OO22

R R ControlControl

OO33 OO44

X = (OX = (O22 – O – O11) – (O) – (O44 – O – O33))

R ExpR Exp XX OO11

R R ControlControl

OO22

X = OX = O11 – O – O22

a. Before/After with Randomization (R) and Control (C)

b. After Only with R and C

8.True Experimental Design

RR OO11 XX OO22

RR OO33 OO44

RR XX OO55

RR OO66

c. Solomon 4 Group

EXT = ?ITE = ?X = ?

O1 = 100O2 – 160O3 = 106

O4 = 140O5 = 150O6 = 135

Problem


9.9. Quasi Exp (3)Quasi Exp (3)A.A. Single Time SeriesSingle Time Series

OO11 O O22 O O33 X O X O44 O O55 O O66

B.B. Multiple Time SeriesMultiple Time SeriesO'O'11 O' O'22 O' O'33 X O' X O'44 O' O'55 O' O'66

C.C. Separate Sample Before/After Design:Separate Sample Before/After Design:R:R: OO11 XX

R:R: XX OO22

Main Problem of Quasi Approach: History(Note: 9A is typical of consumer panel investigation data.)


10.10. Advanced Statistical Design (4)Advanced Statistical Design (4)A.A. CRDCRD

B.B. RBDRBD

C.C. LSDLSD

D.D. FactorialFactorial

Test MarketingTest Marketing1.1. Who?Who?2.2. ObjectivesObjectives

a.a. Forecasts: Sales, Market Share; CANNALBALISTIC Forecasts: Sales, Market Share; CANNALBALISTIC EFFECTSEFFECTS

b.b. Pretest Market MixPretest Market Mixc.c. SerendipitySerendipity

3.3. Key DecisionsKey Decisionsa.a. How Many Cities?How Many Cities?

2 To 62 To 6 Importance of Regional Differences Degree of Importance of Regional Differences Degree of

UncertaintyUncertaintyb.b. Which Cities?Which Cities?

SyracuseSyracuse LeoniaLeonia DaytonDayton Des MoinesDes Moinesc.c. Length Of Test?Length Of Test?

2 Months to 2 Years2 Months to 2 Years Average Repurchase PeriodAverage Repurchase Period Competition ConcernCompetition Concern First to Market ImportanceFirst to Market Importance

Test Marketing Cont’dTest Marketing Cont’dd.d. What Data?What Data?

Warehouse Warehouse ShipmentsShipments

Store AuditsStore Audits Consumer PanelsConsumer Panels Buyer SurveysBuyer Surveys Trade AttitudesTrade Attitudes

4.4. What Action?What Action?Trial RateTrial Rate

Repurchase Repurchase RateRate

HighHigh LowLow

HighHigh Go!Go! More Adv.More Adv.

LowLow Product FlawProduct Flaw Bust!Bust!

PART 2PART 2

Part 2APart 2ADecision Making Under Decision Making Under

UncertaintyUncertainty

Criteria for Selecting the Best OptionCriteria for Selecting the Best Option

• MAX/MINMAX/MIN

• MAX/MAXMAX/MAX

• MIN/MAX-REGRETMIN/MAX-REGRET

•EXPECTED VALUEEXPECTED VALUE

Value of InformationValue of Information Payoff (Decision) TablePayoff (Decision) Table

EVENTS (States of Nature)Management

OptionsE1 Ez . . . En

A1 X11 X12 X1n

A2 Xz1 X22 Xzn

An Xn1 Xnz Xnn

Prior Probabilities

(P1) (Pz) (Pn)

AI : Decision ActsEj : Events (or Sj = States of Nature)Eij : Payoff or ConsequencesPj : Prob. Associated with Ej

ILLUSTRATIONILLUSTRATION

E1 E2 E3 E4

A1 80M 40 -10 -50

A2 30 40 30 10

A3 20 30 40 15

A4 5 10 30 20

Regret TableRegret Table

E1 E2 E3 E4 MAX

A1 0 0 50 70 70

A2 50 0 10 10 50

A3 60 10 0 5 60

A4 75 30 10 0 75

Part 2B Part 2B Marketing Research Case Marketing Research Case

Study Study Bayesian AnalysisBayesian Analysis

Value of InformationValue of InformationPayoff (Decision) Payoff (Decision)

TableTable Events (States of Nature)Events (States of Nature)

ManagemeManagement Optionsnt Options

EE11 EE22 …… EEnn

AA11 XX1111 XX1212 XX1n1n

AA22 XXz1z1 XX2222 XXznzn

AAnn XXn1n1 XXnznz XXnnnn

Prior Prior ProbabilitieProbabilitie

ss

(P(P11)) (P(Pzz)) (P(Pnn))

AI : Decision Acts

Ej : Events (or Sj = States of Nature)

Xij : Payoff or Consequence

Pj : Prob associated with Ej

ILLUSTRATIONILLUSTRATION

EE11 EE22 EE33 EE44

AA11 80M80M 4040 -10-10 -50-50

AA22 3030 4040 3030 1010

AA33 2020 3030 4040 1515

AA44 55 1010 3030 2020

Regret TableRegret Table

EE11 EE22 EE33 EE44 MAXMAX

A1A1 00 00 5050 7070 7070

A2A2 5050 00 1010 1010 5050

A3A3 6060 1010 00 55 6060

A4A4 7575 3030 1010 00 7575

Bayesian CaseBayesian CaseObjective: Determine Value of ResearchObjective: Determine Value of Research

ProblemProblem

SS11 SS22 SS33

AA11 100100 5050 -50-50

AA22 5050 100100 -25-25

AA33 -50-50 00 9090

Prior Probs.Prior Probs. 0.60.6 0.30.3 0.10.1

P(Sj)P(Sj)

EV(A1)=$70MEV(A1)=$70M

EV(A2)=$57.5MEV(A2)=$57.5M

EV(A3)=-$22MEV(A3)=-$22M

EV(L1)=$70MEV(L1)=$70M

EV(C)=$98MEV(C)=$98M

EV(PI)=$28M= EV(C) – EV(U)EV(PI)=$28M= EV(C) – EV(U)

EV(C)= .6(100) + .3(100)+ .1(80) = $98MEV(C)= .6(100) + .3(100)+ .1(80) = $98M

EV(PI)= EV(C) – EV(U) = $98M - $70M = EV(PI)= EV(C) – EV(U) = $98M - $70M = $28M$28M

Conditional Prob. MatrixConditional Prob. MatrixActual ResultsActual Results

Test MKT Test MKT ResultsResults

SS11 SS22 SS33

Light DLight D ZZ11 0.70.7 0.20.2 0.10.1 Should, Should, but not but not

necessary necessary to, sum to to, sum to

one.one.

Mod. DMod. D ZZ22 0.20.2 0.60.6 0.30.3

Heavy Heavy DD

ZZ33 0.10.1 0.20.2 0.60.6

Must sum to oneMust sum to one 1.001.00 1.001.00 1.001.00

Bayesian Work TableBayesian Work Table

0.6 0.7 0.42 0.8570.3 0.2 0.06 0.1220.1 0.1 0.01 0.020

0.49 1.000

0.6 0.2 0.12 0.3640.3 0.6 0.18 0.5450.1 0.3 0.03 0.091

0.33 1.000

0.6 0.1 0.06 0.3330.3 0.2 0.06 0.3330.1 0.6 0.06 0.333

0.18 1.000

State of State of NatureNature

(S(Sjj or E or Ejj))

Prior Prior Prob. Prob. P(SP(Sjj))

Cond’l Cond’l Prob. Prob. P(ZP(Zkk/S/Sjj))

Joint Joint Prob. Prob. P(ZP(ZkkSSjj))

Posterior Posterior Prob. Prob. P(SP(Sjj/Z/Zkk))

ZZ11:: SS11

SS22

SS33

ZZ22:: SS11

SS22

SS33

ZZ33:: SS11

SS22

SS33

Computation of Expected Values Computation of Expected Values from BAYESIAN Work Tablefrom BAYESIAN Work Table

Given:Given:ZZ11 (Test MKT. Results show Light D) (Test MKT. Results show Light D)EV(A1)EV(A1) = 100(.858) + 50(.122) + -50(.02)= 100(.858) + 50(.122) + -50(.02) = $90.9M= $90.9MEV(A2)EV(A2) = 50(.858) + 100(.122) + -25(.02)= 50(.858) + 100(.122) + -25(.02) = $54.6M= $54.6MEV(A3)EV(A3) = -50(.858) + 0(.122) + 80(.02)= -50(.858) + 0(.122) + 80(.02) = $-41.3M= $-41.3M

ZZ22 (Test MKT. Results show Moderate D) (Test MKT. Results show Moderate D)EV(A1)EV(A1) = 100(.364) + 50(.545) + -50(.091)= 100(.364) + 50(.545) + -50(.091) = $59.1M= $59.1MEV(A2)EV(A2) = 50(.364) + 100(.545) + -25(.091)= 50(.364) + 100(.545) + -25(.091) = $70.4M= $70.4MEV(A3)EV(A3) = -50(.364) + 0(.545) + 80(.091)= -50(.364) + 0(.545) + 80(.091) = $-10.9M= $-10.9M

ZZ33 (Test MKT. Results show Heavy D) (Test MKT. Results show Heavy D)EV(A1)EV(A1) = 100(.333) + 50(.333) + -50(.333)= 100(.333) + 50(.333) + -50(.333) = $33.3M= $33.3MEV(A2)EV(A2) = 50(.333) + 100(.333) + -25(.333)= 50(.333) + 100(.333) + -25(.333) = $41.6M= $41.6MEV(A3)EV(A3) = -50(.333) + 0(.333) + 80(.333)= -50(.333) + 0(.333) + 80(.333) = $10.0M= $10.0M

P(ZP(Zkk)) == P(SP(Sjj)P(Z)P(Zkk/S/Sjj))

P(ZP(Z11)) = P(S= P(S11)P(Z)P(Z11/S/S11) + P(S) + P(S22)P(Z)P(Z11/S/S22) + P(S) + P(S33)P(Z)P(Z11/S/S33))= (.6)(.7) + (.3)(.2) + (.1)(.1)= (.6)(.7) + (.3)(.2) + (.1)(.1)= 0.49= 0.49



Probability of Obtaining Each Test Probability of Obtaining Each Test MKT. ResultMKT. Result

k

j 1

Probability of Obtaining Each Test Probability of Obtaining Each Test MKT. Result (cont’d)MKT. Result (cont’d)

FORECASTSFORECASTS Decision Decision ActsActs

Opt. EvOpt. Ev Prob.Prob.

Z1Z1 A1A1 90.990.9 0.490.49

Z2Z2 A2A2 70.470.4 0.330.33

Z3Z3 A3A3 41.641.6 0.180.18

EV(Research) = 90.0(.40) + 70.4(.33) + 41.6(.18)

= $75.26M

EV(U) = 70.0M

Max Price For Res. = EV(R) – EV(U)

= 75.26 – 70.0

=$5.26M

Case DescriptionCase Description

Newco is a manufacturer of natural soft drink Newco is a manufacturer of natural soft drink beverages. It has recently experienced a decline beverages. It has recently experienced a decline in market share. To reverse this decline, in market share. To reverse this decline, management is considering a new promotional management is considering a new promotional program that will cost $1 million. Management program that will cost $1 million. Management believes that the program may have three believes that the program may have three possible effects:possible effects:

1. 1. Very Favorable:Very Favorable: 10% increase in market share; 10% increase in market share; $4 million increase in profits.$4 million increase in profits.

2. 2. Favorable:Favorable: 5% increase in market share; $1 5% increase in market share; $1 million increase in profits.million increase in profits.

3. 3. Unfavorable:Unfavorable: (No Effect on Sales) – incremental (No Effect on Sales) – incremental loss of $1 million, the cost of the program.loss of $1 million, the cost of the program.

Abbey Normal, Director of Marketing Research, Abbey Normal, Director of Marketing Research, estimates the probability of the three events as estimates the probability of the three events as follows:follows:

SS11: Very Favorable Consumer Reaction = 0.30: Very Favorable Consumer Reaction = 0.30

SS22: Favorable Consumer Reaction = 0.40: Favorable Consumer Reaction = 0.40

SS33: Unfavorable Consumer Reaction = 0.30: Unfavorable Consumer Reaction = 0.30

Newco is considering a proposal made by Newco is considering a proposal made by Marketing Testing Experts (MTE), a private Marketing Testing Experts (MTE), a private consulting firm, to asses the potential effects of consulting firm, to asses the potential effects of the program.the program.

MTE has advised Newco that based on its past MTE has advised Newco that based on its past experience of assessing promotional programs experience of assessing promotional programs that the following results on average have been that the following results on average have been obtained:obtained:

MTE proposes a charge of $250,000 for conducting MTE proposes a charge of $250,000 for conducting the research.the research.

Customer Customer ReactionReaction

MTE MTE ExperienceExperience

Very Very FavorableFavorable

FavorableFavorable UnfavorableUnfavorable

Strongly Strongly PositivePositive

0.70.7 0.20.2 0.00.0

Moderately Moderately PositivePositive

0.30.3 0.60.6 0.20.2

Slightly PositiveSlightly Positive 0.00.0 0.20.2 0.80.8

Questions:Questions:

1.1. Construct the relevant payoff table.Construct the relevant payoff table.

2.2. What are the maximin and maximax solutions?What are the maximin and maximax solutions?

3.3. What is the solution according to the expected value What is the solution according to the expected value criterion?criterion?

4.4. What is the value of perfect research information?What is the value of perfect research information?

5.5. Should Newco except MTE’s proposal? Why?Should Newco except MTE’s proposal? Why?

6.6. What price would Newco be willing to pay for the study?What price would Newco be willing to pay for the study?

7.7. What probabilities are critical to the outcome of the study?What probabilities are critical to the outcome of the study?

8.8. How could the various probabilities that are needed for How could the various probabilities that are needed for such a study be obtained in practice?such a study be obtained in practice?

Note:Note: There are many computer software packages, that can There are many computer software packages, that can be run on a PC, mainframe and microcomputer that can be be run on a PC, mainframe and microcomputer that can be used to solve this problem. See, for example, D.A. used to solve this problem. See, for example, D.A. Schellinck and R.N. Maddox, Schellinck and R.N. Maddox, Marketing Research: A Marketing Research: A Computer Assisted ApproachComputer Assisted Approach, The Dryden Press, 1987., The Dryden Press, 1987.

PART 3PART 3

SECONDARY SOURCES OF SECONDARY SOURCES OF DATADATA

FIVEFOLD (5) CLASSIFICATIONFIVEFOLD (5) CLASSIFICATION

1.1. INTERNALINTERNAL• P&LP&L• Balance SheetBalance Sheet• Sales FigureSales Figure• Sales-Call ReportsSales-Call Reports• InvoicesInvoices• Inventory RecordsInventory Records• Prior Research StudiesPrior Research Studies

2.2. PERIODICALS & BOOKSPERIODICALS & BOOKS• Business Periodicals Index (Monthly Publications Business Periodicals Index (Monthly Publications

that provide a list of business articles appearing that provide a list of business articles appearing in a wide variety of business publications).in a wide variety of business publications).

• Standard & Poor’s Industry surveys (provides Standard & Poor’s Industry surveys (provides updated statistics and analyses of industries).updated statistics and analyses of industries).

• Moody’s Manuals (financial data and names of Moody’s Manuals (financial data and names of executives in major corporations).executives in major corporations).

• Encyclopedia of Associations (provides Encyclopedia of Associations (provides information on every major trade and information on every major trade and professional association in the U.S.professional association in the U.S.

• Marketing JournalsMarketing Journals• Trade Magazines (Advertising Age, Chain Store Trade Magazines (Advertising Age, Chain Store

Age progressive Grocer, Sales and MKT. MGT, Age progressive Grocer, Sales and MKT. MGT, Stores).Stores).

• Business Magazines (Fortune, Business Week, Business Magazines (Fortune, Business Week, Forbes, Barrons, Harvard Business Review, etc.)Forbes, Barrons, Harvard Business Review, etc.)

3.3. COMMERCIAL DATACOMMERCIAL DATA• A.C. Nielsen Co.A.C. Nielsen Co.

1)1) Retail Index Service (data on products and brands Retail Index Service (data on products and brands sold through retail outlets)sold through retail outlets)

2)2) Scan track (Supermarket scanner data)Scan track (Supermarket scanner data)Electronic Test MKTElectronic Test MKTa.a. Scanner Cards for Panel MembersScanner Cards for Panel Membersb.b. DemographicsDemographicsc.c. TV Viewers Habit of Panel MembersTV Viewers Habit of Panel Members

3)3) Media Research Services (Television Media Research Services (Television Audience)Audience)

4)4) Neodata Service Inc. (Magazine Circ.)Neodata Service Inc. (Magazine Circ.)5)5) Home Services – National Purchase Diary Home Services – National Purchase Diary

PanelPanel• MRCA – National Purchase Diary PanelMRCA – National Purchase Diary Panel

National Menu Census (data on home food National Menu Census (data on home food consumption)consumption)

COMMERCIAL DATA (CONTINUED)COMMERCIAL DATA (CONTINUED)• Claritas – buying habits of 250,000 U.S. neighborhoodsClaritas – buying habits of 250,000 U.S. neighborhoods• Information Resources Inc. – provide supermarket scanner Information Resources Inc. – provide supermarket scanner

datadata1.1. (InfoScan); also(InfoScan); also2.2. Promotio Scan – IMPACT of supermarket promotionsPromotio Scan – IMPACT of supermarket promotions

• SAMI/BURKESAMI/BURKEProvides reports on warehouse withdrawals to food stores in Provides reports on warehouse withdrawals to food stores in selected market areas (SAMI reports) and supermarket selected market areas (SAMI reports) and supermarket scanner data (SAMSCAN)scanner data (SAMSCAN)

• SIMMONS Market Research Bureau (MRB Group)SIMMONS Market Research Bureau (MRB Group)Provides annual reports covering television market, sporting Provides annual reports covering television market, sporting goods, proprietary drugs.goods, proprietary drugs.

Giving demographic data by sex; income; age Giving demographic data by sex; income; age and brand preference (selective market and media reaching and brand preference (selective market and media reaching them)them)

• OtherOtherAudit Bureau of Circulation ArbitronAudit Bureau of Circulation ArbitronAudit and SurveysAudit and SurveysDunn and BradstreetDunn and BradstreetNational Family OpinionNational Family OpinionStandard Rate and Data ServiceStandard Rate and Data ServiceStardStard

4.4. GOVERNMENT PUBLICATIONGOVERNMENT PUBLICATION• Statistical Abstract of MKT Sources (updated Statistical Abstract of MKT Sources (updated

annually)annually)Provides summary data on: demographic, economy, social Provides summary data on: demographic, economy, social

and other aspects of the U.S. economy and society.and other aspects of the U.S. economy and society.

• County and City Data Book (updated every three County and City Data Book (updated every three years)years)

--Presented statistical information for counties, cities and Presented statistical information for counties, cities and other geographical units regarding:other geographical units regarding:

- population, education, employment- population, education, employment

- aggr. And med. Income – housing- aggr. And med. Income – housing

- bank deposit, retail sales, etc.- bank deposit, retail sales, etc.

• U.S. Industrial OutlookU.S. Industrial Outlook-Projections of industrial activity by industry and includes -Projections of industrial activity by industry and includes data on:data on:

productionproduction

salessales

shipmentshipment

employmentemployment

• Marketing Information GuideMarketing Information GuideProvides a monthly annotated bibliography of Provides a monthly annotated bibliography of marketing information.marketing information.

• OtherOther- Annual Survey of Manufacturers- Annual Survey of Manufacturers- Business Statistics- Business Statistics- Census of Manufacturers- Census of Manufacturers- Census of Retail Trade, Wholesale Trade and - Census of Retail Trade, Wholesale Trade and Selected Service IndustriesSelected Service Industries- Census of Transportation- Census of Transportation- Federal Reserve Bulleting- Federal Reserve Bulleting- Monthly Labor Review- Monthly Labor Review- Survey of Current Business- Survey of Current Business- Vital Statistics Report- Vital Statistics Report

5.5. COMPUTERIZED DATA BASECOMPUTERIZED DATA BASEDefinition: A collection of numeric data and/or Definition: A collection of numeric data and/or textual information that is available on textual information that is available on computer readable form.computer readable form.

e.g.: Bibliographice.g.: BibliographicABI/INFORMABI/INFORMPredicastPredicastNumericNumeric

1.1. 2000/2010 Census Data2000/2010 Census DataDonnelly MKTDonnelly MKTDRIDRI

2.2. Nielsen Retail Product MovementNielsen Retail Product MovementSAMISAMI

3.3. SPI (Strategic Planning Institute) -250 SPI (Strategic Planning Institute) -250 CompaniesCompaniesPIMSPIMS

Work Index:Work Index: Sponsored by Cornell University’s School of Industrial Labor Sponsored by Cornell University’s School of Industrial Labor

Relations and Relations and Human Resource Executive Human Resource Executive magazine, this magazine, this site provides links to resources on labor relations, benefits, site provides links to resources on labor relations, benefits, training, technology, staffing, recruiting, leadership, legal training, technology, staffing, recruiting, leadership, legal issues and related topics.issues and related topics.

MarketingMarketingAdvertising WorldAdvertising World Links to resources in selected areas of Links to resources in selected areas of

marketing and advertising.marketing and advertising.American Association of Advertising AgenciesAmerican Association of Advertising Agencies Provides Provides

membership information, recent bulletins, and links to membership information, recent bulletins, and links to related resources.related resources.

American Marketing AssociationAmerican Marketing Association Provides information on Provides information on membership, publications, and conferences.membership, publications, and conferences.

Guerrilla Marketing OnlineGuerrilla Marketing Online Provides access to recent articles Provides access to recent articles in marketing and links to relevant sites.in marketing and links to relevant sites.

Marketing Cont’dMarketing Cont’dInstitute for the Study of Business Markets (ISBM)Institute for the Study of Business Markets (ISBM)

Features current information about seminars and Features current information about seminars and research projects. Includes marketing links.research projects. Includes marketing links.

John W. Hartman Center for Sales, Advertising & John W. Hartman Center for Sales, Advertising & Marketing History (Duke University Libraries)Marketing History (Duke University Libraries) Center Center promotes study of sales, marketing, and advertising promotes study of sales, marketing, and advertising history. Features “history. Features “Ad*Access,Ad*Access,” an image database of ” an image database of over 7,000 advertisements printed in U.S. and over 7,000 advertisements printed in U.S. and Canadian newspapers between 1911 and 1955. Canadian newspapers between 1911 and 1955. Database allows keyword searching.Database allows keyword searching.

Yahoo – Business and Economy: MarketingYahoo – Business and Economy: Marketing Provides Provides links to marketing web siteslinks to marketing web sites

Marketing Information: A Bibliography Marketing Information: A Bibliography

Statistical SourcesStatistical Sources

Business Resources on the Web: Economic Statistics, Business Resources on the Web: Economic Statistics, Government Statistics, and Business LawGovernment Statistics, and Business Law Maintained Maintained by Boise State University’s Albertsons Library, by Boise State University’s Albertsons Library, contains extensive links to statistics sources for the contains extensive links to statistics sources for the economy, population, international trade, statistics by economy, population, international trade, statistics by state, etc. Primarily dedicated to statistics sources, state, etc. Primarily dedicated to statistics sources, but also contains a business law componentbut also contains a business law component

Fisher College of Business Financial Data FinderFisher College of Business Financial Data Finder Links to Links to financial and economic data on the web and financial and economic data on the web and elsewhere.elsewhere.

Profiling CustomersProfiling Customers




IndustrialIndustrial

Dun’s Market Identifiers (DMI)Dun’s Market Identifiers (DMI)• D&B’s market information service. A D&B’s market information service. A

record of over 7 million establishments record of over 7 million establishments updated monthlyupdated monthly

Enhanced DMI extends 4 digit S/C Enhanced DMI extends 4 digit S/C codes to 6 and 8 digits to allow codes to 6 and 8 digits to allow clients to target specific customer clients to target specific customer groupsgroups

ConsumerConsumer GeodemographersGeodemographers

• R.L. PoleR.L. PoleProduct for Retailers: Vehicle Origin SurveyProduct for Retailers: Vehicle Origin Survey

Samples cars parked in retailer parking lots and Samples cars parked in retailer parking lots and identifies (from the Vehicle Registration Database) identifies (from the Vehicle Registration Database) their home location. Can also match location with their home location. Can also match location with Census data and via their TIGER files provide a Census data and via their TIGER files provide a demographic profile of customersdemographic profile of customers

• ClaritasClaritasUses 500+ demographic variables in its Prigm Uses 500+ demographic variables in its Prigm

(Potential Ratings for Zip markets) database to (Potential Ratings for Zip markets) database to classify 250,000 neighborhoodsclassify 250,000 neighborhoods

40 types based on consumer behavior and lifestyle40 types based on consumer behavior and lifestyle

(shotguns, pickups, patios and pools, etc.)(shotguns, pickups, patios and pools, etc.)

ConsumerConsumer

Diary PanelsDiary Panels• NPD (13,000 HHs)NPD (13,000 HHs)

30 Product Categories30 Product Categories• 29 Miniature Panels29 Miniature Panels• Quota SamplingQuota Sampling• ApplicationsApplications

Brand SharesBrand Shares Brand Switching BehaviorBrand Switching Behavior Frequency of Purchase and AmountsFrequency of Purchase and Amounts Evaluation of Price and PromotionsEvaluation of Price and Promotions Changes in Channels and DistributionChanges in Channels and Distribution Size of MarketSize of Market

ConsumerConsumer Store AuditsStore Audits

• Nielsen Retail IndexNielsen Retail Index(Drug stores, Mass media indexes and liquor stores)(Drug stores, Mass media indexes and liquor stores)

• Now Use ScannersNow Use ScannersBeginning Inventory and Net purchase (from Beginning Inventory and Net purchase (from

wholesalers and manufactures) – Ending Inventorywholesalers and manufactures) – Ending Inventory = Sales= Sales Audit IncludesAudit Includes

• SalesSales• Purchases by retailersPurchases by retailers• InventoriesInventories• Number of Days of SuppliesNumber of Days of Supplies• Out-of-stock storesOut-of-stock stores• Prices (retail and wholesale)Prices (retail and wholesale)• Special factory packsSpecial factory packs• Promotions and AdvertisingPromotions and Advertising

ConsumerConsumer

• Disaggregate data byDisaggregate data by CompetitorsCompetitors Geographic areaGeographic area Store typeStore type

• Nielsen’s Scantrack supplements its Retail Nielsen’s Scantrack supplements its Retail index (since 1970’s)index (since 1970’s) 11 digit WPC code11 digit WPC code EvaluatesEvaluates

• PromotionsPromotions• Price changesPrice changes• Channel trendsChannel trends• Product trendsProduct trends

40,000 HHs using scanner wands40,000 HHs using scanner wands

ConsumerConsumer

Behavior Scan (provided by Behavior Scan (provided by Information Resources)Information Resources)• 3,000 HHs provided scanner cards3,000 HHs provided scanner cards• Supermarkets and Drugstores provided Supermarkets and Drugstores provided

with scannerwith scanner• With coorperation from Cable TV With coorperation from Cable TV

Companies It links view habits with Companies It links view habits with purchase (Black Boxes)purchase (Black Boxes)

• Distinguishes Users from nonusers of Distinguishes Users from nonusers of products WRT …/promotionsproducts WRT …/promotions

ConsumerConsumer TelevisionTelevision

• Nielsen TV IndexNielsen TV Index Audimeters attached to TV sets and tied into a central computer. Audimeters attached to TV sets and tied into a central computer.

Replaced by Replaced by People MetersPeople Meters in 1988. in 1988. Aggregate ratings by 10 socioeconomic groups and demographic Aggregate ratings by 10 socioeconomic groups and demographic

characteristics, including territory, ed. Of head of H.H., age of characteristics, including territory, ed. Of head of H.H., age of woman in house, etc.woman in house, etc.

RadioRadio• ArbitronArbitron

Panel of HHs are randomly selected who have agreed to complete Panel of HHs are randomly selected who have agreed to complete diaries. Radio marketing are rate 1-4 times age during the diaries. Radio marketing are rate 1-4 times age during the “Sweeps” period (April/May). Focus on age, sex, and individual “Sweeps” period (April/May). Focus on age, sex, and individual (USHH) behavior(USHH) behavior

Print MediaPrint Media• Starch Readership ServiceStarch Readership Service• Evals. 50,000 ads in 1000 print media (mag., bus. Publications, Evals. 50,000 ads in 1000 print media (mag., bus. Publications,

newspapers); u=75,000 person interviewnewspapers); u=75,000 person interview• Recognition method: 3 degreesRecognition method: 3 degrees

1.1. NotedNoted. Remembers any part of ad. Remembers any part of ad2.2. AssociatedAssociated (1) plus recalls brand or advertise (1) plus recalls brand or advertise3.3. Read MostRead Most recalls 50% or more of the written material recalls 50% or more of the written material

Multimedia ServicesMultimedia Services Simmons Media/Mkt ServiceSimmons Media/Mkt Service

• Prob. Sample of 19,000+Prob. Sample of 19,000+• Cross references product usage and media exposureCross references product usage and media exposure• 4 different interviews with each respondent4 different interviews with each respondent

Magazine, TV, Newspaper, RadioMagazine, TV, Newspaper, Radio• Results disaggregated by sexResults disaggregated by sex• Self –administered questions covering 500 product categoriesSelf –administered questions covering 500 product categories• TV view behavior gathered by means of a personal diary; Radio via TV view behavior gathered by means of a personal diary; Radio via

both personal and telephone interviewsboth personal and telephone interviews• Demographics collectedDemographics collected• ApplicationApplication Segmentation and targeting by firms Segmentation and targeting by firms

MediamarkMediamark• Similar service, problem sample of 20,000Similar service, problem sample of 20,000• Tends to establish audience rate 10% higher than Simmons (see p Tends to establish audience rate 10% higher than Simmons (see p

252)252) Mail PanelsMail Panels

• NFO ResearchNFO Research Quota Sample of 400,000 HHsQuota Sample of 400,000 HHs Rebuilt every two yearsRebuilt every two years Self-adm qSelf-adm q

• Market Facts, Inc,Market Facts, Inc, Quota Sample of 275,000Quota Sample of 275,000 Cross Tabulation of Aug. Criterion Variable (Adv. Sales, etc) with anyone or Cross Tabulation of Aug. Criterion Variable (Adv. Sales, etc) with anyone or

number of demographic variables (Age, sex, automobile,…, pets ordered, number of demographic variables (Age, sex, automobile,…, pets ordered, etc)etc)

PART 3BPART 3B

Determining Market Determining Market PotentialPotential




Determining Market PotentialDetermining Market Potential

Multiple-Factor Index MethodMultiple-Factor Index Method(“Annual Survey of Buying Power” published (“Annual Survey of Buying Power” published

by by Sales and Marketing ManagementSales and Marketing Management ) )

Purpose: Measure the relative consumer Purpose: Measure the relative consumer buying power in different region, state, buying power in different region, state, and metropolitan areas.and metropolitan areas.

Determining Market PotentialDetermining Market PotentialBBii = 0.5 = 0.5yyii + 0.3 + 0.3rrii + 0.2 + 0.2ppii

wherewhere

BBii : % of total national buying power found in area : % of total national buying power found in area ii

yyii: % of national DI in area : % of national DI in area ii

rrii: % of nat’l retail sales in area : % of nat’l retail sales in area ii

ppii: % of nat’l population in area : % of nat’l population in area ii

Example 1: drug salesExample 1: drug sales

Suppose N.Y. State has:Suppose N.Y. State has: yyii = 5.0%, = 5.0%, rrii = 10.0%, = 10.0%, ppii = 8.0% = 8.0%

BBii = 0.5(5.0) + 0.3 (10.0) + 0.2(8.0) = 7.1 = 0.5(5.0) + 0.3 (10.0) + 0.2(8.0) = 7.1Thus, 7.1% of the nation’s drug sales would be expected to Thus, 7.1% of the nation’s drug sales would be expected to

occur in NY. If the total drug sales are $50 Billion, sales in the occur in NY. If the total drug sales are $50 Billion, sales in the NY market should beNY market should be

$50$50B x B x .071.071 = = $3.55$3.55BB

Determining Market PotentialDetermining Market PotentialBBii = 0.5 = 0.5yyii + 0.3 + 0.3rrii + 0.2 + 0.2ppii

wherewhere

BBii : % of total national buying power found in area : % of total national buying power found in area ii

yyii: % of national DI in area : % of national DI in area ii

rrii: % of nat’l retail sales in area : % of nat’l retail sales in area ii

ppii: % of nat’l population in area : % of nat’l population in area ii

Example 2: Actual 1992 Values for NYExample 2: Actual 1992 Values for NY

yyii = 8.0%, = 8.0%, rrii = 6.7%, = 6.7%, ppii = 7.2% = 7.2%

BBii = 0.5(8.0) + 0.3 (6.7) + 0.2(7.2) = 7.45 = 0.5(8.0) + 0.3 (6.7) + 0.2(7.2) = 7.45Thus, 7.45% of the nation’s drug sales would be expected to Thus, 7.45% of the nation’s drug sales would be expected to

occur in NY. If the total drug sales are $50 Billion, sales in the occur in NY. If the total drug sales are $50 Billion, sales in the NY market should beNY market should be

$50$50B x B x .0745.0745 = = $3.725$3.725BB

U.S. Population, effective buying income, U.S. Population, effective buying income, and retail sails for selected states, 1991and retail sails for selected states, 1991

1991 Total Population (thousands)

Percentage of U.S.

1991 Total EBI ($000)

Percentage of U.S.

1991 Total Retail Sales

Percentage of U.S.

Middle Atlantic 37,947.9 14.9621 632,218,683 16.9542 266,597,624 14.6370New Jersey 7,813.5 3.0807 155,172,906 4.1613 63,209,987 3.4704

New York 18,166.3 7.1626 298,926,889 8.0163 122,445,952 6.7227Pennsylvania 11,968.1 4.7188 178,118,888 4.7766 80,941,685 4.4439

Region State

1991 Regional State Summaries of …

Population Effective Buying Income Retail Sales

Source: Adapted from “1992 Survey of Buying Power,” Part I. Sales and Marketing Management (August 24, 1992), pp. B-2, B-3, B-4.

PART 4PART 4

Measuring Attitude: Five Measuring Attitude: Five ApproachesApproaches


Measuring Attitude: Five Measuring Attitude: Five ApproachesApproaches

1.1. Self ReportsSelf Reports• Most Common ProcedureMost Common Procedure

2.2. Observation of BehaviorObservation of Behavior3.3. Indirect TechniquesIndirect Techniques

• Word AssociationWord Association• Sentence CompletionSentence Completion• StorytellingStorytelling• Graphics InterpretationGraphics Interpretation

4.4. Performance of Objective TasksPerformance of Objective Tasks5.5. Physiological ReactionsPhysiological Reactions

• Galvanic Skin Response TechniqueGalvanic Skin Response Technique• PupilometerPupilometer

Qualitative Research TechniquesQualitative Research Techniques 1. Focus Group 1. Focus Group

Skilled moderator leads a small group (6-12) of Skilled moderator leads a small group (6-12) of participants in an unstructured discussion of a participants in an unstructured discussion of a particular topic.particular topic.

A.A. AdvantagesAdvantages1)1) FlexibilityFlexibility

2)2) ControllableControllable

3)3) Group InteractionGroup Interaction

4)4) Openness (encourages participants to Openness (encourages participants to be honest and direct)be honest and direct)

5)5) Opportunity for quick executionOpportunity for quick execution

Qualitative Research TechniquesQualitative Research Techniques1. Focus Group1. Focus Group

Skilled moderator leads a small group (6-12) of Skilled moderator leads a small group (6-12) of participants in an unstructured discussion of a participants in an unstructured discussion of a particular topic.particular topic.

B.B. DisadvantagesDisadvantages1)1) Lack of scientific validityLack of scientific validity

2)2) Prone to bias (moderator)Prone to bias (moderator)

3)3) Offers false sense of security (Results Offers false sense of security (Results should be considered inconclusive)should be considered inconclusive)

4)4) Measurement difficultiesMeasurement difficulties

5)5) Subject to “Squeaky Wheel Syndrome”Subject to “Squeaky Wheel Syndrome”

Qualitative Research TechniquesQualitative Research Techniques2. Depth Interviews2. Depth Interviews

Structured or Unstructured, one-on-one Structured or Unstructured, one-on-one interview.interview.

A.A. AdvantagesAdvantages1)1) Offers greater comfortability for Offers greater comfortability for

sensitive topicssensitive topics

2)2) More detailed and revealingMore detailed and revealing

3)3) Easier to scheduleEasier to schedule

4)4) Can handle more complex topics (e.g. Can handle more complex topics (e.g. Interviewing financial experts)Interviewing financial experts)

Qualitative Research TechniquesQualitative Research Techniques2. Depth Interviews2. Depth Interviews

Structured or Unstructured, one-on-one Structured or Unstructured, one-on-one interview.interview.

B.B. DisadvantagesDisadvantages1)1) No interaction effectsNo interaction effects

2)2) ExpensiveExpensive

3)3) Inconsistency among interviewers and Inconsistency among interviewers and levels of energy (Diminishing Returns)levels of energy (Diminishing Returns)

4)4) Interpretational errors produce Interpretational errors produce inconsistency and unreliabilityinconsistency and unreliability

5)5) Lack statistical validityLack statistical validity

Qualitative Research TechniquesQualitative Research Techniques3. Projective Techniques3. Projective Techniques

Based on the Based on the theorytheory that people may that people may not be aware of their innermost not be aware of their innermost attitudes and/or may not wish to attitudes and/or may not wish to express certain attitudes.express certain attitudes.


A.A. TechniquesTechniques1)1) Word Association Ex. DetergentsWord Association Ex. Detergents

Respondents Stimulus Words A B Washday Everyday Ironing Fresh and sweet Clean Pure Air Soiled Scrub Don’t Clean Filth This neighborhood Dirt Bubbles Bath Soap and Water Family Squabbles Children Towels Dirty Wash


A.A. TechniquesTechniques2)2) Picture InterpretationPicture Interpretation

Thematic Apperception Test (TAT)Thematic Apperception Test (TAT)

Respondent is shown abstract visual stimuli Respondent is shown abstract visual stimuli and describes what is going on in the and describes what is going on in the pictures and what will happenpictures and what will happen


A.A. TechniquesTechniques3)3) Sentence CompletionSentence Completion

Ex. ToothpasteEx. Toothpaste I brush my teeth because _________.I brush my teeth because _________. I use my brand of toothpaste because I use my brand of toothpaste because

_________._________. My toothpaste tastes like _________.My toothpaste tastes like _________. When I brush my teeth, I _________.When I brush my teeth, I _________.


A.A. TechniquesTechniques4)4) Third-person technique and role Third-person technique and role

playingplaying

5)5) CartoonsCartoons Blank bubbles appear above the cartoon Blank bubbles appear above the cartoon

characterscharacters Ex. New car modelsEx. New car models


B.B. Disadvantages of Projective TechniquesDisadvantages of Projective Techniques1)1) Subjectivity of scoring procedures low Subjectivity of scoring procedures low

reliabilityreliability

2)2) Low validityLow validity

3)3) Absence of substantial evidence of “Basic Absence of substantial evidence of “Basic Assumption,” namely, that respondents Assumption,” namely, that respondents project their true feelings on ambiguous project their true feelings on ambiguous stimulistimuli

4)4) Small samples and unstructured formats Small samples and unstructured formats limit generalizationlimit generalization

Basic Measurement/Scale Basic Measurement/Scale ConceptsConcepts

Measure:Measure:Assignment of numbers to characteristics of objectsAssignment of numbers to characteristics of objects

Object:Object:A material or physical configuration. Can be seen and/or A material or physical configuration. Can be seen and/or

touchedtouched

Characteristics:Characteristics:Qualities associated with objects that give such objects Qualities associated with objects that give such objects

identifying traitsidentifying traits

Measurement Scale:Measurement Scale:A plan that is used to assign numbers to characteristics of A plan that is used to assign numbers to characteristics of

objectsobjects

Construct:Construct:The “something” that is being measuredThe “something” that is being measured

Scales of MeasurementScales of Measurement

Scale Basic Comparisons

Typical Examples Measures of Average

Male-femaleUser-nonuserOccupationsUniform numbers

Preference for brandsSocial classHardness of mineralsGraded quality of lumber

Temperature scaleGrade point averageAttitude toward brandsAwareness of advertising

Units sold Geometric meanNumber of purchasers Harmonic meanProbability of purchaseWeight

Nominal Identity Mode

Ordinal Order Median

Interval Comparison of intervals

Mean

Ratio Comparison of absolute magnitudes

Equal-Appearing Interval Sort of the Statement into CategoriesEqual-Appearing Interval Sort of the Statement into Categories

A B C D E F G H I J K Scale Q1 2 3 4 5 6 7 8 9 10 11 Value Value

f 0 8 10 30 60 60 14 12 60 0 01 p 0.00 0.04 0.05 0.15 0.30 0.30 0.07 0.06 0.03 0.00 0.00 5.4 1.7

cp 0.00 0.04 0.09 0.24 0.54 0.84 0.91 0.97 1.00 1.00 1.00f 0 0 0 0 0 6 16 28 44 66 4

2 p 0.00 0.00 0.00 0.00 0.00 0.03 0.08 0.14 0.22 0.33 0.20 9.6 1.8cp 0.00 0.00 0.00 0.00 0.00 0.03 0.11 0.25 0.47 0.80 1.00f 0 0 0 0 10 10 14 32 84 34 16

3 p 0.00 0.00 0.00 0.00 0.05 0.05 0.07 0.16 0.42 0.17 0.08 8.9 1.5cp 0.00 0.00 0.00 0.00 0.05 0.10 0.17 0.33 0.75 0.92 1.00f 0 0 8 16 36 58 48 24 10 0 0

4 p 0.00 0.00 0.04 0.08 0.18 0.29 0.24 0.12 0.05 0.00 0.00 6.2 2.0cp 0.00 0.00 0.04 0.12 0.30 0.59 0.83 0.95 1.00 1.00 1.00

Statement

Sorting Categories

Centile FormulaCentile Formula

i

P

pcLV

w

bc

Semantic Differential ScaleSemantic Differential Scale

1.1. Origin: Research designed to Origin: Research designed to investigate the underlying structure investigate the underlying structure of words used to describe objects, of words used to describe objects, events, processes, attitude, etc.events, processes, attitude, etc.

2.2. Rational: Three independent Rational: Three independent (orthogonal) dimensions can be (orthogonal) dimensions can be used to describe an object using a used to describe an object using a bipolar adjective scale.bipolar adjective scale.


3.3. Three Uncorrelated DimensionsThree Uncorrelated Dimensions1)1) PotencyPotency

Strong - WeakStrong - Weak Shallow - DeepShallow - Deep Powerful - PowerlessPowerful - Powerless

2)2) EvaluationEvaluation Good – BadGood – Bad Sour – SweetSour – Sweet Informative – UninformativeInformative – Uninformative Helpful – UnhelpfulHelpful – Unhelpful Useless – UsefulUseless – Useful

3)3) Activity:Activity: Dynamic – StaticDynamic – Static Orderly – ChaoticOrderly – Chaotic Aggressive – Non aggressiveAggressive – Non aggressive Dead – AliveDead – Alive Slow - FastSlow - Fast


4.4. Marketing ApplicationMarketing Application• Develop profiles for products, firms, Develop profiles for products, firms,

markets or whatever is being markets or whatever is being measuredmeasured

• Studies often use adjective that are not Studies often use adjective that are not anonyms or single words and use anonyms or single words and use phrases to anchor scalesphrases to anchor scales

• 7-Point Scale is common7-Point Scale is common


5.5. Marketing ApplicationMarketing Application• Purification Stage (often times skipped)Purification Stage (often times skipped)• Item Analysis. Product Moment Item Analysis. Product Moment

Formula is used to compare score of Formula is used to compare score of each item with total score. Or, each item with total score. Or,

• T-test of significance between mean T-test of significance between mean scores of “low” and “high” total scores scores of “low” and “high” total scores groups on an item-by-item basis.groups on an item-by-item basis.

Example of Semantic Differential Example of Semantic Differential ScaleScale

Extremely

Somewhat

QuiteNeith

er

Somewhat

QuiteExtr

emely

Not Trustworthy ____:____:____:____:____:____:____ Trustworthy

Attractive ____:____:____:____:____:____:____ Unattractive

Not Expert ____:____:____:____:____:____:____ Expert

Knowledgeable ____:____:____:____:____:____:____Not Knowledgeable

Likert ScaleLikert Scale

Allows an expression of intensity of Allows an expression of intensity of feelingfeeling

Purification Stage (same as SD scale)Purification Stage (same as SD scale)• Representative Sample of Target PopulationRepresentative Sample of Target Population

Final Selection of QuestionsFinal Selection of Questions• Same as SD ScaleSame as SD Scale

Generally a 5-Point ScaleGenerally a 5-Point Scale Mixes Statements as to Positive or Mixes Statements as to Positive or

Negative ExpressionNegative Expression

Example of Likert ScaleExample of Likert Scale

Strongly

Disagree

AgreeStro

ngly Agree

Neither A

gree nor Disa

gree

Disagree

1.The celebrity endorser is trustworthy.

____ ____ ____ ____ ____

2.The celebrity endorser is attractive.

____ ____ ____ ____ ____

3.The celebrity endorser is an expert on the product.

____ ____ ____ ____ ____

4.The celebrity endorser is knowledgeable about the product.

____ ____ ____ ____ ____

Stapel ScaleStapel Scale

Adjectives or descriptive phrases are Adjectives or descriptive phrases are tested rather than bipolar adjective tested rather than bipolar adjective pairs.pairs.

Generally, a 10 point scale is used. Generally, a 10 point scale is used. Points, on scale are identified by Points, on scale are identified by number.number.

Results my differ according to the Results my differ according to the manner in which statement is manner in which statement is phrased.phrased.

Example of the Stapel ScaleExample of the Stapel Scale

-5 -4 -3 -2 -1 +1 +2 +3 +4 +5

1.The celebrity endorser is trustworthy.

2.The celebrity endorser is attractive.

3.The celebrity endorser is an expert on the product.

4.The celebrity endorser is knowledgeable about the product.

Basic Rating Scales (3)Basic Rating Scales (3)

1.1. Itemized Rating Scale:Itemized Rating Scale:Most commonly used. Attitudes are measured by Most commonly used. Attitudes are measured by

the choice of positions on a continuum.the choice of positions on a continuum.

2.2. Graphics Rating Scale:Graphics Rating Scale:Attitudes are expressed along a line or graphic Attitudes are expressed along a line or graphic

continuum running from one extreme to the continuum running from one extreme to the next.next.

3.3. Comparative Rating Scale:Comparative Rating Scale:Uses an explicit reference point for comparison.Uses an explicit reference point for comparison.

Rank orderRank order Pairwise comparisonPairwise comparison

Examples of the Rating Scales:Examples of the Rating Scales:Itemized Rating ScaleItemized Rating Scale

Please evaluate each of the following attributes of compact disc players according to how important the attribute is to you personally by placing an “X” in the appropriate box.

Not ImportantSomewhat Important

Fairly Important

Exremely Important

1.Quality of sound reproduction

2.Physical size of CD Unit

3. Brand name 4. Durability of unit

Examples of the Rating Scales:Examples of the Rating Scales:Graphic Rating ScaleGraphic Rating Scale

AttributeNot Important

Extremely Important

1. Quality of sound reproduction

2. Physical size of CD Unit

3. Brand name

4. Durability of unit

Please evaluate each of the following attributes of compact disc players according to how important the attribute is to you personally by placing an “X” at the position on the horizontal line that most accurately reflects your feelings.

Examples of the Rating Scales:Examples of the Rating Scales:Comparative Rating ScaleComparative Rating Scale

Please divide 100 points between the following attributes of compact disc players according to the relative importance of each attribute to you.

Quality of sound Quality of sound reproductionreproduction

Physical size of CD UnitPhysical size of CD Unit

Brand nameBrand name

Durability of unitDurability of unit

____________

____________

____________

____________

100%100%

Q-Sort TechniqueQ-Sort Technique

Similar to Thurstone approach. Similar to Thurstone approach. Respondents place questions into Respondents place questions into different piles to form a known probability different piles to form a known probability distribution, e.g., normal or log normaldistribution, e.g., normal or log normal

Subjects reflect their attitude toward an Subjects reflect their attitude toward an objectobject

Focus is on individuals and not the Focus is on individuals and not the object(s)object(s)

Used for cluster and segmentation Used for cluster and segmentation applicationsapplications

Consumer Decision Making ModelsConsumer Decision Making ModelsAttribute Analysis of Valence and Salience PropertiesAttribute Analysis of Valence and Salience Properties

Product AttributesComputer Memory, Software, Price, etc.Hotel ?Mouthwash ?Lipstick ?

BrandMemory Capacity

Graphics Capacity

Software Diversity Price

A 10 8 6 4B 8 9 8 3C 6 8 10 5D 4 3 7 8

1. Product Examples

2. Illustration: PC

3. Decision ModelsA.A. Ideal Brand ModelIdeal Brand Model

B.B. Constrained Brand ModelConstrained Brand Model

C.C. Conjunctive ModelConjunctive ModelMinimum attribute levels screen out Minimum attribute levels screen out competition brands to yield reduced competition brands to yield reduced set. Ex. PC brands equals or exceeds set. Ex. PC brands equals or exceeds (7,6,7,2)(7,6,7,2)

N

iijkikjk PWA

1

N

iikijkikjk CPWD

1

Constrained Brand ModelConstrained Brand ModelEx.: (6,10,10,5)Ex.: (6,10,10,5)

3.8 |5-7|.1 |10-7|.2 |10-3|.3 |6-4|.4D(d)

0.6 |5-5|.1 |10-10|.2 |10-8|.3 |6-6|.4D(c)

1.7 |5-3|.1 |10-8|.2 |10-9|.3 |6-8|.4D(b)

3.1 |5-4|.1 |10-6|.2 |10-8|.3 |6-10|.4D(a)

PART 5PART 5

Questionnaire: AnatomyQuestionnaire: Anatomy




Questionnaire: AnatomyQuestionnaire: Anatomy

Definition: A formalized schedule Definition: A formalized schedule (document) that is designed to (document) that is designed to achieve achieve threethree purposes: purposes:

1.1. Obtain Relevant Information;Obtain Relevant Information;

2.2. Direct the Questioning Process; andDirect the Questioning Process; and

3.3. Set the format for recording and Set the format for recording and evaluating data.evaluating data.

Eight Step ProcessEight Step Process

Step 1: Define Marketing ProblemStep 1: Define Marketing Problem1)1) Write a paragraphWrite a paragraph

2)2) List data to be collectedList data to be collected

3)3) Anticipate use of dataAnticipate use of data

4)4) State objectivesState objectives

5)5) Develop a Plan of AnalysisDevelop a Plan of Analysis

6)6) Client “Sign Off”Client “Sign Off”


Step 2: Interviewing ProcessStep 2: Interviewing Process1)1) PersonalPersonal

– Structured vs. UnstructuredStructured vs. Unstructured– Interviewer Administered vs. Self Interviewer Administered vs. Self

AdministeredAdministered

2)2) TelephoneTelephone

3)3) MailMail

4)4) InternetInternet


Step 3: Evaluate Question ContentStep 3: Evaluate Question Content

Four Rules:Four Rules:1)1) Will the Respondent understand the Will the Respondent understand the

question?question?

2)2) Will the Respondent have the Will the Respondent have the information?information?

3)3) Will the Respondent provide information?Will the Respondent provide information?

4)4) Will the Analyst understand the Will the Analyst understand the Respondent’s response?Respondent’s response?


Step 4: Q/A FormatStep 4: Q/A Format1)1) Open EndedOpen Ended

a.a. Free ResponseFree Responseb.b. ProbingProbingc.c. Projective (e.g. association, construction, Projective (e.g. association, construction,

sentence completion) sentence completion)

2)2) Close EndedClose Endeda.a. DichotomousDichotomousb.b. MultichotomousMultichotomousc.c. ScalesScalesd.d. RankingRankinge.e. Check ListCheck List


Step 5: Determine Wording of QuestionStep 5: Determine Wording of Question

Three Rules:Three Rules:1)1) UnambiguousUnambiguous

2)2) Simple and Familiar WordsSimple and Familiar Words

3)3) Specific Words or OptionsSpecific Words or Options

Ex.) Why did you fly to Chicago on U.S. Ex.) Why did you fly to Chicago on U.S. Airlines?Airlines?


Step 6: Sequence of QuestionsStep 6: Sequence of Questions1)1) Screening (if necessary)Screening (if necessary)

2)2) Gain Confidence and InterestGain Confidence and Interest

3)3) Groups Like Topics TogetherGroups Like Topics Together

4)4) FunnelingFunneling

5)5) Demographics at EndDemographics at End

6)6) Thank You!Thank You!


Step 7: Physical Characteristics of Step 7: Physical Characteristics of Questionnaire (especially by mail)Questionnaire (especially by mail)

Step 8: Pretest - Revise - Formalize - Step 8: Pretest - Revise - Formalize - FinalizeFinalize

1)1) PersonalPersonal

2)2) Planned Method of AdministrationPlanned Method of Administration

Guidelines for Question WordingGuidelines for Question Wording

Use simple words and questionsUse simple words and questions Avoid ambiguous words and Avoid ambiguous words and

questionsquestions Avoid leading questionsAvoid leading questions Avoid implicit alternativesAvoid implicit alternatives Avoid implicit assumptionsAvoid implicit assumptions Avoid generalizations and estimatesAvoid generalizations and estimates Avoid double-barreled questionsAvoid double-barreled questions

Communication MethodsCommunication MethodsF

orm

:

Standardized questionsStandardized questionsStandardized responsesStandardized responsese.g. fixed alternative e.g. fixed alternative questionsquestions

Non standardized Non standardized questionsquestionsNonstandardized Nonstandardized responses. responses. e.g. depth interviewse.g. depth interviews

Simple AdministrationSimple AdministrationSimple AnalysisSimple AnalysisSuitable for facts or Suitable for facts or clear-cut opinions due to clear-cut opinions due to forced alternativesforced alternatives

FlexibleFlexibleDifficult interpretationDifficult interpretationInterviewer influencedInterviewer influencedBetter for exploratory Better for exploratory researchresearch

Standardized questionsStandardized questionsStandardized responsesStandardized responses

Standardized stimuliStandardized stimuliNon standard responsesNon standard responsese.g. projective e.g. projective techniquestechniques

Simple administrationSimple administrationSimple analysisSimple analysisDifficult interpretationDifficult interpretationLeast used methodLeast used method

Difficult analysisDifficult analysisSubjective interpretationSubjective interpretationSuited to exploratory Suited to exploratory researchresearch

UN

DIS

GU

ISE

DC

hara

cter

istic

s:F

orm

:C

hara

cter

istic

s:

DIS

GU

ISE

D

STRUCTURED UNSTRUCTURED

Comparison of mail, telephone, and Comparison of mail, telephone, and personal interview surveyspersonal interview surveys

BASIS OF BASIS OF COMPARISONCOMPARISON MAIL SURVEYSMAIL SURVEYS TELEPHONE TELEPHONE

SURVEYSSURVEYSPERSONAL PERSONAL INTERVIEW INTERVIEW SURVEYSSURVEYS

Cost per Cost per completed completed surveysurvey

Usually theUsually the least least expensiveexpensive, , assuming assuming adequate adequate return ratereturn rate

Moderately Moderately expensiveexpensive, , assuming assuming reasonable reasonable completion completion raterate

Most Most expensiveexpensive because of because of interviewer’s interviewer’s time and time and travel travel expensesexpenses

Ability to probe Ability to probe and ask complex and ask complex questionsquestions

LittleLittle, since , since self-self-administered administered format must format must be short and be short and simplesimple

SomeSome, since , since interviewer interviewer can probe and can probe and elaborate on elaborate on questionsquestions

MuchMuch, since , since interviewers interviewers can show can show visuals, probe, visuals, probe, establish establish rapportrapport

Opportunity for Opportunity for interviewer to interviewer to bias resultsbias results

NoneNone, since , since form is form is completed completed without without interviewerinterviewer

SomeSome, because , because of voice of voice inflection of inflection of interviewerinterviewer

SignificantSignificant, , because of because of voice and voice and facial facial expressions of expressions of interviewerinterviewer

Anonymity given Anonymity given respondentrespondent

CompleteComplete, , since no since no signature is signature is neededneeded

SomeSome, because , because of telephone of telephone contactcontact

LittleLittle, because , because of face-to-face of face-to-face contactcontact

Comparison of Three Communications Media on Comparison of Three Communications Media on Ten FactorsTen Factors

FACTOR MAIL PERSONAL TELEPHONEBias freedom (from interviewer) 1 3 2Control over collection 3 2 1Depth of questioning 3 1 2Economy 2 3 1Follow-up ability 3 2 1Hard-to-recall data obtainable 1 2 3Rapport with respondent 3 1 2Sampling completeness 3 1 2Speed of obtaining reponses 3 2 1Versatility to use variety of methods

2 1 3

MEDIUM

© 1987 by Prentice-Hall, Inc.A division of Simon & SchusterEnglewood Cliffs, NJ 07632

PART 6PART 6

STATISTICAL ANALYSISSTATISTICAL ANALYSIS

From A, B, and C

Rewriting (1)

Also, from (1)

Solving for Sample Size

x

xZ

x

xt

ˆ

xZx xZx ̂

n

EZ

xE

2

22

E

Zn

or

or

where Examples:

Let =100, Z=2, and E=10

n=(22 x 1002) 102 = 400

Let =100, Z=2, and E=5

n=(22 x 1002) 52 = 1600

(1)

(2)

(3)

Major Principles

A) )(xE

B)n

x

C) CLT

Determinants of Sample Size (3)Determinants of Sample Size (3)

Variance of PopulationVariance of Population Error AllowanceError Allowance Probability of Realizing Error Probability of Realizing Error

AllowanceAllowance

22

E

Zn

From A, B, and C: Binomial

Similar to (3), for Binomial

2

2 )1(

E

PPZn

A) )(PE

B)N

PPP

)1(

note: )1( PPx 22 )1( PPx

xP

n

PPZP

)1(

(4)

(5)

Example:

Let P =0.2, Z=2, and E=0.02

160002.0

)8.0(2.022

2

n

Suppose that P =0.3 from (5)

0229.3.

)0115(.23.1600

)7.0(3.023.

From A, B, and C: Binomial

Similar to (3), for Binomial

2

2 )1(

E

PPZn

A) )(PE

B)N

PPP

)1(

note: )1( PPx 22 )1( PPx

xP

n

PPZP

)1(

(4)

(5)

Example:

Let P =0.2, Z=2, and E=0.02

160002.0

)8.0(2.022

2

n

Suppose that Pfound =0.3 from (5)

0229.3.

)0115(.23.1600

)7.0(3.023.

Six-Step Procedure for Drawing a SampleSix-Step Procedure for Drawing a Sample

Step 1:Step 1: Define the PopulationDefine the Population Step 2:Step 2: Identifying the Sampling Identifying the Sampling

FrameFrame Step 3:Step 3: Select a Sampling ProcedureSelect a Sampling Procedure Step 4:Step 4: Determine the Sample SizeDetermine the Sample Size Step 5:Step 5: Select the Sample ElementsSelect the Sample Elements Step 6:Step 6: Collect the Data from the Collect the Data from the

Designated ElementsDesignated Elements

Sampling PlansSampling PlansNon ProbabilityNon Probability ProbabilityProbabilityConvenienceConvenienceJudgmentJudgmentSnowballSnowballQuotaQuota

Simple Random SamplingSimple Random SamplingSystematic Random SamplingSystematic Random SamplingStratified Random SamplingStratified Random Sampling

•ProportionateProportionate•DisproportionateDisproportionate

Cluster Random SamplingCluster Random Sampling•One StageOne Stage•Two StageTwo Stage

AreaArea•One StageOne Stage•Two StageTwo Stage

Stratified SamplingStratified Sampling1) Proportionate

22

2

iiWE

Zn

Where:

Allocation:

Note:

N

NW i

i

nN

Nn i

i

22

222

11

2

2

... kk

N

N

N

N

N

N

E

Zn

n

W iix

2

Stratified SamplingStratified Sampling2) Disproportionate

22

2

iiWE

Zn

Allocation:

Note:

nN

Nn k

iii

iii

1

2

22

11

2

2

...

k

k

N

N

N

N

N

N

E

Zn

n

W iix

2

Stratified Sampling IllustrationStratified Sampling IllustrationN=1250E=8.0090% Confidence Level: Z=1.64

Industry

750 20 0.60 15000 0.50500/ 1250

30 0.4015,000/ 30,000

0.50

iN i iW iiN ii

ii

N

N

1N

2N

1) Proportionate

)360240(042025.

)900(4.)400(6.64

6896.2

)30(4.)20(6.8

)64.1( 222

2

n

10)25(4.

15)25(6.

215.25

2

1

n

n

n

Stratified Sampling IllustrationStratified Sampling IllustrationN=1250E=8.0090% Confidence Level: Z=1.64

Industry

750 20 0.60 15000 0.50500/ 1250

30 0.4015,000/ 30,000

0.50

iN i iW iiN ii

ii

N

N

1N

2N

2) Disproportionate

)576(042025.

121264

6896.2

)30(4.)20(6.8

)64.1(

2

2

2

2

n

121224

12)24()30(500)20(750

)20(750

24

12

1

nnn

n

n

PART 7PART 7

STATISTICAL DISTRIBUTIONSSTATISTICAL DISTRIBUTIONS

Sales Performance of REPS under Three Sales Performance of REPS under Three Different Sales Training ProgramsDifferent Sales Training Programs

80

758580

375425400Total

818984

718270

738881

687679

829086

IIIIII

x

x

SUMMARY (Anova: Single Factor)Groups Count Sum Average VarianceColumn 1 5 400 80 38.5Column 2 5 425 85 35Column 3 5 375 75 38.5

ANOVASource of Variation SS df MS F P-value F crit

Between Groups 250 2 125 3.348214 0.0699094 3.88529Within Groups 448 12 37.3333

Total 698 14

3.348 3.885

Accept H0 Reject H0

348214.33333.37

125

)315/(448

)13/(250

)/(

)1/(

KNSSE

KSSBF

698

)8081(...)8079()8086(

)(

222

2

N

ij xx

Step I: SST

Step II: SSB

250

])8075()8085()8080[(5

)(

222

1

2

K

jjj xxn

448154140154

154)7581()7571()7573()7568()7582(

140)8589()8582()8588()8576()8590(

154)8084()8070()8081()8079()8086(

)(

22222

22222

22222

2

N

jij xx

Step III: SSE

Note: SST = SSB + SSE

698 = 250 + 448

Step IV: Fcalc. Value

Accept H0. No significant difference among samples at 5% level

88.3 of Value Table

35.33.37

125

124482

2501

05122

j .i F

N-KSSEK-SSB

Chi-SquareChi-Square1.1. DefinitionDefinition

2.2. ApplicationsApplications

ler

ji ij

ijij

E

EO,

1,1

22 )(

rrkr2r1

22k2221

11k1211

P...PP

P...PP

P...PP

:H 0

rr

22

11

E0

E0

E0

:H 0

A. Contingency Table (r by le) B. Goodness of Fit Test

Chi-SquareChi-Square3. Illustration3. IllustrationProblem: Children's Commercials:Problem: Children's Commercials:Does the level of Understanding (Levels I, II, and III) Does the level of Understanding (Levels I, II, and III)

vary with a child's age (5-7 vs 8-10 vs. 11-12)vary with a child's age (5-7 vs 8-10 vs. 11-12)

33k3231

2232221

1131211

PPP

PPP

PPP

:H 0

Sample Test: Level of AGEUnderstanding 5-7 8-10 11-12 Total

I 55 37 15 107II 35 50 60 145III 10 13 25 48

TOTAL 100 100 100 300

Chi-SquareChi-Square4. Solution4. Solution

160300/48PPP

483300/145PPP

357300/107PPP

3k3231

232221

131211

:0H

Level of AGEUnderstanding 5-7 8-10 11-12 Total

I 55 37 15 107(35.7) (35.7) (35.7)

II 35 50 60 145(48.3) (48.3) (48.3)

III 10 13 25 48(16) (16) (16)

TOTAL 100 100 100 300

1,000

Chi-SquareChi-Square

4. Solution (continued)4. Solution (continued)

488.9

9.3616

)1625(...

7.35

)7.3537(

7.35

)7.3555(

24,05.

2

222

calc

022 reject , Since Hcriticalcalc

Dependent Samples: t-TestDependent Samples: t-Test

nd

d

ˆ

H0: Consumers are Indifferent Between Alternatives, that is, 0D

d

Ddt

Test Statistic:

n

dd

1

)(ˆ

2

n

ddd

where:

n = number of sample (retail outlets)

Store TUMS I TUMS II d

1 130 111 19 1692 82 76 6 03 64 58 6 04 111 103 8 45 50 48 2 166 56 61 -5 121

TOTAL 493 457 36 310

2)( dd

Dependent Samples: t-TestDependent Samples: t-Test

Illustration:

Dependent Samples: t-TestDependent Samples: t-TestIllustration (continued)

66

36

n

dd

87.75

310

1

)(ˆ

2

n

ddd

21.345.2

87.7ˆ

nd

d

0:0 DH

015.205.: 5.0,1 nt

87.121.3

6ˆ

d

Ddt

0Htt criticalcalc reject cannot , Since

ENDEND

part 1. course syllabus/outline course syllabus/outline

Documents

table x slide

marketing research

pricing slide

products new products

marketing case report

marketing mix

johns university slide

new markets