Business Research Methods 27th February 2021 ANOVA One way ANOVA One-way ANOVA (one-way analysis of variance) is a statistical method to compare means of two or more populations. H0: µ1= µ2= µ3 H1: At least one of the brand mean life is different from the others. https://sixsigmastudyguide.com/anova-analysis-of-variation/ A Car manufacturer certainly planning to conduct the tests to know the performance of 3 different brands of 12V batteries; so, he selected 5 batteries from each brand and discharged them under controlled condition. Assuming the lifetime of batteries are normally distributed at 95% confidence level. Hypothesis that there is no difference between three brands w.r.t lifetime. Two-way ANOVA Two-way ANOVA performs an analysis of variance for testing the equality of populations means when classification of treatments is by two categorical (independent) variables or factors. Example: A researcher conducting an experiment to check the effectiveness of coating. A new coating applied to 2 different materials and research conducted at 2 different laboratories. For instance, each laboratory tested 5 samples from each of the treated materials. Find the results from the below table: Access deviant or hidden populations. Theorize inductively in a qualitative study. Overcome the problem of not having an accessible sampling frame. • The people involved in the experiment might behave differently because of their knowledge that they are taking part in the experiment. A mathematical distribution with the objective to obtain a count of the number of responses associated with different values of one variable and to express this counts in percentage terms. Scales where respondent is asked to rate an item in comparison with another item or a group of items each other based on a common criterion. • A low p-value (<0.05) indicates that you can reject the null hypothesis and a high p-value suggests that changes in the independent variable are unrelated to the changes in the dependent variable. Plénitude by L'Oréal • • • • • • Launched in France 1982, as “high end, superior performance but accessible”. Competed in high end of the market. Main competitor was oil of Olay (Procter and gamble) and nivea. Plenitude was introduced under a “class of mass” strategy. Also, this strategy was validated after the success of Plenitude in France. Brand also deepened the belief in the formula for success in mass skin care • Technologically Superior Products • Concentrate and support the “star product” • Follow the “the golden rules “ of Advertising. L'Oréal in USA • With success of Plenitude in France, this product was test marketed in Atlanta and Dallas in 1988. • With high market shares in test markets and supporting data, L'Oréal decided to launch the brand nationwide. • Will the France formula “class to mass” work in United States? Let's see! • 14 SKUs were introduced. • French advertising executions were basically into English and “star system” was followed. • But the brand was not making any money, and they hit a four-year sales plateau. Management Decision Problem (MDP) • How to cut losses and make profits in the US market. Research Decision Problem (RDP) • To determine if there are too many different types of products • To determine if the premium pricing strategy is appropriate for all products or for any of them • To determine if the money should be put behind the ‘star’ product • To determine the best manner by which L'Oréal brand name can be leveraged. • To assess the competitive scenario Data Collection • Secondary Data (AC Nielsen) • Primary Research: Survey, in-depth interviews, focus group • Sample: • 3500 women. • 16-70 years who use moisturizing cream at least once a week. Place: Trade margin? • Placement in the store • All 14 SKUs at eye-level in one linear foot merchandising unit. • In mass-merchandizing stores like Walmart or Target there is no one to help either. In department stores like JC penny, you might find help • Promotion • To understand promotion plan, lets look at the data collected from surveys and in-depth interviews. Perceptual Map It is a map of how consumers perceive the brand in question and the other competitor brands. It provides a visual landscape of the competitive environment. Three points to remember. • The center is zero which means the further the brand is away from the center, the stronger is has been rated on that attribute • Brand close together are seen similar on particular attributes • Attributes grouping together means they might be correlated with each other. (Detour) Focus Group • • • • What is a focus group? Example: silicon valley Is Focus group qualitative or quantitative in nature? Pros • Inclusion of facial expression and body language • Provides social cues in language expression. • Cons • Artificial environment • Potentially biased result due to group influence Qualitative Study discussion • Using focus group, following things were concluded. • L'Oréal is an expensive, good brand from France. It knows what it is doing. • The product needs to be less oily. • In the supermarket, one doesn’t have time. You pick what you need. In department store, one might be in a more relaxed and exploratory mood. As a result, you need clear, crisp directions which are not time confusing. You need choice which is not less but not so much that it is intimidating. • The difference between French and American customers is becoming evident. Many consumers feel this is too much information and are not as aware about their skin and the treatment it needs. They are keen on maintaining their skin, willing to spend money as well but it needs to be simple and direct such as ‘eyedefense.’ • Packaging looks expensive and has much information. Recommendations • Highlight L'Oréal, reduce focus on Plenitude. Now both get same font size. • Highlight the benefits like revitalift. Essentially, increase the focus on product promise. Move the info packaging to the back. • Same information is repeated twice. Adds no value. Instead, maybe highlight the price. Focus on highlighting the price- not as expensive as Estée lauder but better than Ponds or Olay. • Is there a need to place all the products together? Put the daily moisturizers with Ponds and Olay. Treatment moisturizers with alpha hydroxyl and cleansers separately. This will make it overall less intimidating. • Increase in-store trial and demonstration. Cut down on advertising. • To determine if there are too many different types of products • Data Collection RDP - 1 • Moisturizing Units sold • Sales in 96 first quarter • Assessments: • Cut hydra products from the daily moisturizers. Remove excel cream. • To determine if the premium pricing strategy is appropriate for all products or for any of them RDP - 2 • Data Collection • Facial skin care market study • Qualitative research • Shelf-shopping study • Product line pricing of plenitude and competitors • Sales in 96 first quarter • Assessments: • Can afford to increase price in the treatment. • Reduce trade margins • Reduce cleanser pricing, if needed • To determine if the money should be put behind the ‘star’ product RDP - 3 • Data Collection • Facial skin care market study • Sales in 96 first quarter • Assessments: • Treatment is where L’Oreal gets its revenues from. Revitalift has performed well. • To determine the best manner by which L’Oreal brand name can be leveraged. • Data Collection • Facial skin care market study • Qualitative research • Shelf-shopping study RDP - 4 • Assessments: • Reduce ad spending significantly. Increase in-store demonstrations to educate and increase trials. Not enough trials currently. To increase trials, it is also important to reduce the number of the products so that it is not intimidating. • Provide free samples • To assess the competitive scenario. RDP - 5 • Data Collection • 1995 dollar share of all the market players • Moisturizing Units sold • Assessments: • Ponds is the fastest growing competitor. They have done well in the daily market because of just one product, good size and with less advertising spend.
