Chapter 5

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Chapter 7
Causal Designs
Issues Addressed
conditions of causality
 what is an experiment?
 differences between a lab vs field
experiment
 two types of experimental validity
 extraneous factors that affect validity
 types of experimental designs
 test marketing and types of test markets

Conditions of Causality

Concomitant variation
» extent to which the cause (X) and the effect (Y) occur
together
– e.g., advertising and sales

Time Order of Occurrence of Variables
» X has to occur before Y

Elimination of Effects of Other Factors
» for X to cause Y, X has to be associated with Y even after the
effects of all other factors have been accounted for
What is an Experiment?
is a scientific investigation in which one
or more independent variables are
manipulated and the effect on a
dependent variable is observed.
 other potential independent variables
are controlled
 class to come up with an experiment

Field versus Lab Experiments

Lab Experiment
» create a situation with desired conditions
» manipulate some variables while controlling others
» examine the dependent variable

Field Experiment
» research study in a natural setting
» manipulate some variables
» under as carefully controlled conditions as the
situation would permit
» examine the dependent variable
Experimental Validity

Internal Validity
» extent to which the researcher can attribute
the effect observed to the experimental
variable and not to other factors
» effect of price on sales
» other factors (ad, display space, store
traffic, competitor prices)
» these can be maintained constant in a lab
experiment
Experimental Validity (cont.)

External Validity
» extent to which the results of the
experiment can be generalized to other
situations
» e.g. simulated shopping trip and problems
Extraneous Factors Affecting
Validity
History
 Maturation
 Testing
 Instrument Variation
 Selection Bias
 Experimental Mortality

History
specific events, external to the
experiment
 occurring at the same time as the
experiment
 that may affect the dependent variable
 e.g., refrigerator pricing
 usually difficult to identify history factors

Maturation






changes occurring within the test units
which are not due to the effects of the
experimental variable
e.g., tired, hungry, not attentive
effects observed may then be partly
attributable to the changes in the test unit
particularly relevant in longitudinal studies
respondents may undergo changes in taste,
family status, knowledge level
Testing
the process of experimentation itself
affects the observed response
 main testing effect

» effect of a prior observation on a later
observation
» may be a result of respondent desire to be
consistent
» can occur in both longitudinal and crosssectional studies
» affects internal validity of the experiment
Testing (cont.)

interactive testing effect
» effect of a prior measurement on the test
unit’s response to the independent variable
» e.g. attitude toward a brand
» sensitivity to that brand’s information
» measured effects are then not
generalizable to the population
» affects external validity of the experiment
Instrument Variation
effect of changes in the measuring
instruments on what is being measured
 could also occur because of variability in
administration
 pricing study

Selection Bias
occurs when it is difficult to certify that
groups of test units are equivalent
 matching and randomization techniques

Experimental Mortality
loss of test units during an experiment
 comparison of units lost with units
retained

Controlling Extraneous
Variables
randomization
 matching
 statistical control
 design control

Types of designs
Preexperimental
 True Experimental
 Quasi-experimental

Pre-experimental Designs
One Shot Case Study
 One Group Pretest-Posttest Design
 Static Group Design

True Experimental Designs
Pretest-Posttest Control Group Design
 Posttest-Only Control Group Design

Quasi-Experimental Design

Time Series Design
Market Test



is a controlled experiment, done in a limited
but carefully selected part of the marketplace,
whose aim is to predict the sales or profit
consequences ... of one or more proposed
marketing actions”
is the final gauge of consumer acceptance
three out of four products test marketed
succeed, while four out of five that have not
been test marketed fail
Types of Test Markets

Standard Test Markets
» products sold thru’ normal distribution channels
» results monitored by a standard syndicated service

Controlled Test Markets
» entire test program is done by an outside service

Electronic Test Markets
» variant of controlled markets
» use of consumer panels to measure purchases and TV
viewing behavior

Simulated Test Markets
» use of a simulated shopping environment
» fast, cheap, protection from competitors
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