Chapter Four: Research Design

What type of statements become our way of manipulating variables of interest when conducting casual research?

"if-then" statements

What factors affect the ability to control distribution and promotion?

- Are distributors in the city available and willing to cooperate? - If not, is a controlled-test-market service company available for the city? - Will the media in the city have the facilities to accommodate your test-market needs? - At what costs?

What are the uses of exploratory research?

- Gain background information - Define terms and concepts - Clarify problems and hypotheses - Establish research priorities

What are the threats to external validity?

- How representative is the sample of test units? - Is this sample really representative of the population? - Incorrect selection of sample units for testing purposes. - Artificiality of the experimental setting itself.

What is one of the values of longitudinal studies using continuous panels for brand managers? What is another use of longitudinal data?

- It allows brand managers to explore the dynamics among competing brands. - Another use of longitudinal data is market-tracking studies.

If test markets are expensive and time consuming, why would companies justify the cost?

- The costs of introducing a new product on a national or regional basis can amount to millions of dollars, so if the test market can improve a product's chance of success, then the costs of the test market are justified. - The test market can identify failures early on and save the company huge losses - The product might test well in a test market and then will be introduced more widely.

Why are test markets conducted?

- To measure sales potential for a new product - To measure consumer and dealer reactions to other marketing-mix variables - To test media usage, pricing, sales promotions, etc.

What are the two types of panels?

1. Continuous 2. Discontinuous

What are the two types of descriptive studies?

1. Cross-sectional 2. Longitudinal

What are the three traditional categories of research designs? How do you decide which research design is most appropriate?

1. Exploratory 2. Descriptive 3. Casual The choice of the most appropriate design depends largely on the objectives of the research. It also depends on how much we already know about the problem and research objective.

Why should exploratory research be used in almost every research project?

1. Exploratory research, particularly secondary data analysis, can be conducted efficiently through online and library resources. 2. Compared to collecting primary data, exploratory research is inexpensive. 3. Exploratory research can often provide information that meets the research objectives or can assist in gathering current information necessary to conduct either a descriptive or casual design.

What are two forms of validity used to assess the validity of an experiment?

1. Internal 2. External

What two broad classes can we classify experiments in?

1. Laboratory 2. Field

What are six ethical issues that may arise when planning the research design?

1. Recommending a costlier design than needed 2. Designing a study in which data are collected for multiple clients 3. Using information obtained for a client in another research project 4. Over- or underestimating data collection costs. 5. Wrongfully gaining respondent cooperation to reduce costs 6. Misrepresenting sampling methods

What three criteria are useful for selecting test-market cities?

1. Representativeness 2. Degree of isolation 3. Ability to control distribution and promotion

What are three commonly used methods for conducting exploratory research?

1. Secondary Data Analysis 2. Experience Surveys 3. Case Analysis

What are the four types of test markets?

1. Standard 2. Controlled 3. Electronic 4. Simulated

What are the advantages of test marketing?

1. Testing product acceptability and marketing-mix variables in a field setting provides the best information possible to the decision maker prior to actually going into full-scale marketing of the product. 2. Allows for the most accurate method of forecasting future sales 3. Allows the firms the opportunity to pretest marketing-mix variables.

What are three common objectives?

1. To gain background information and to develop hypotheses 2. To measure the state of a variable of interest 3. To test hypotheses that specify the relationships between two or more variables

What are the disadvantages of test marketing?

1. test markets do not yield infallible results 2. Competitors may intentionally try to sabotage test markets 3. The cost of test markets involving several test cities and various forms of promotion can be extremely expensive. 4. Test markets bring about exposure of the product to the competition, who get the opportunity to examine product prototypes and to see the planned marketing strategy for the new product via the test market.

When is an experiment valid?

1. the observed change in the dependent variable is, in fact, due to the independent variable. 2. the results of the experiment apply to the "real world" outside the experimental setting.

What are the two broad classes of uses of test markets?

1. to test the sales potential for a new product or service 2. to test variations in the marketing mix for a product or service.

Define experimental group

A group that has been exposed to a change in the independent variable

Define control group

A group whose subjects have not been exposed to the change in the independent variable.

Define research design.

A master plan that specifies the methods that will be used to collect and analyze the information needed for a research project.

Define pretest

A measurement of the dependent variable that is take prior to changing the independent variable

Define posttest

A measurement of the dependent variable that is taken after changing the independent variable

Define experimental design

A procedure for devising an experimental setting so that a change in a dependent variable may be attributed solely to the change in an independent variable. **Allow experimenters to control for the effects on a dependent variable by any extraneous variable.

Define causality

A relationship in which one or more variables affect one or more other variables.

Define case analysis

A review of available information about one or more former situations to gain understanding of a current research problem with similar characteristics.

What is one example of exploratory research?

A situation analysis.

Define experiment

A type of study in which one or more independent variables are manipulated to see how one or more dependent variables are affected, while also controlling the effects of additional extraneous variables.

What are the advantages and disadvantages of laboratory experiments?

Advantages- 1. Allow the researcher to control for the effects of extraneous variables 2. Compared to field experiments, lab experiments may be conducted quickly and with less expense. Disadvantages- 1. The lack of a natural setting and therefore, the concern that the findings do not generalize to the real world

What are the advantages and disadvantages of electronic test markets?

Advantages- 1. As consumers buy (or do not buy) the test product, demographic information on the consumers is automatically recorded. 2. May also have the ability to link media viewing habits to panel members 3. Firms can know how the different elements of the promotional mix affect purchases of the new product. 4. Offers speed, greater confidentiality, less cost than standard and controlled markets. Disadvantages- 1. The test market is one more step removed from the real market

What are the advantages and disadvantages of field experiments?

Advantages- 1. Conducting the study in a naturalistic setting increases the likelihood that the study's findings will also hold true in the real world. Disadvantages- 1. Expensive 2. Time consuming 3. Experimenter must always be alert to the impact of extraneous variables, which are difficult to control in the natural settings of field experimentation

What are the advantages and disadvantages of simulated test markets?

Advantages- 1. Faster 2. Only cost 5% to 10% of the cost of a standard test market 3. confidential so competitors are less likely to know about the test Disadvantages- 1. Not as accurate as full-scale test markets, as they are dependent on the assumptions built into the models

What are the advantages and disadvantages of standard test markets?

Advantages- 1. Good indicators as to how the product will actually perform because they are conducted in real settings Disadvantages- 1. Competitors are immediately aware of the new product or service

What are the advantages and disadvantages of controlled test markets?

Advantages- 1. Offer an alternative to the company that wishes to gain fast access to a distribution system set up for test-market purposes Disadvantages- 1. This distribution network may or may not properly represent the firm's actual distribution system.

Define extraneous variable

All of the variables other than the independent variables that may have an effect on the dependent variable.

What is often the core of exploratory research?

An analysis of secondary data

How can researchers begin to plan which research design will be most appropriate, at the same time as they are forming the problem and the research objectives?

Basic research designs available to them can be successfully matched to a range of problems and research objectives.

Why are laboratory experiments desirable?

Because by controlling for extraneous variables, the experimenter can be assured that any changes in the dependent variable were due solely to differences in the independent variable. Laboratory experiments are most desirable when the intent of the experiment is to achieve high levels of internal validity.

Why should the test market city be representative of the marketing territory in which the product will ultimately be distributed?

Because one of the major reasons for conducting a test market is to achieve external validity.

Why are firms usually interested in using data from continuous panels?

Because they can gain insights into changes in consumers' attitudes and behaviors.

How is the before-after with control group design achieved?

By randomly dividing subjects of the experiment into two groups: the control group and the experimental group.

How is control of extraneous variables typically achieved?

By the use of a second group of subjects.

How do city governments come into play when choosing test-markets?

City governments often consider it desirable to have test markets conducted in their city because it brings n additional revenues, so they and local media typically provide a great deal of information about their city to prospective test marketers.

What ethical problems are associated with test markets?

Companies report test marketing results to the press, which allows them access to premarket publicity. But do we only hear the good news? Companies eager to get good publicity may select test-market cities that they feel will return favorable results. Is this method of getting publicity ethical?

Define test marketing

Conducting an experiment or study in a field setting to evaluate a new product or service or other elements of the marketing mix.

Define sample surveys

Cross-sectional studies whose samples are designed in such a way as to be representative of a specific population at a pre-determined margin of error.

When is case analysis useful?

For developing strategies to prevent and manage crises, since, by definition, crises occur on rare occasions.

Define experience surveys. What is it also known as?

Gathering information from those thought to be knowledgable on the issues relevant to the research problem. This is also known as key-informant technique.

In many cases, how do companies recruit panel members?

In a way so that the demographic characteristics of the panel are proportionate to the demographic characteristics found in the total population according to Census Bureau statistics. Sometimes these panels will be balanced demographically not only to represent the United States but also to allow representation of various geographical regions.

Are the four P's (price, product, promotion and place) considered independent or dependent variables?

Independent variables.

What types of secondary data can the Internet and library offer?

Information found on websites and in books, journals, magazines, special reports, bulletins, and newsletters.

What is one benefit of knowing the needed research design?

It allows for advance planning, so the project may be conducted in less time and typically at a cost savings due to efficiencies gained in preplanning.

How is exploratory research flexible?

It allows the researcher to investigate whatever sources he or she identifies and to the extent he or she feels is necessary to gain an understanding of the problem at hand.

What is a lead-user survey in the technology field?

It is used to acquire information from lead users of new technology.

What are some examples of independent variables that a marketing research would want to manipulate?

Level of advertising expenditure Type of advertising appeal (humor, prestige) Display location Placement of website ads Method of compensating salesperson Price Type of product

Why is casual research important?

Marketing managers are always trying to determine what will cause a change in consumer satisfaction, a gain in market share, an increase in website visits, or an increase in sales.

Define cross-sectional study

Measure units from a sample of the population of interest at only one point in time. - Cross-sectional studies outnumber longitudinal studies and casual studies. - They can be described as "snapshots" of the population because they are one-time measurements.

Can an experiment conducted in a naturalistic field setting, have only external validity but still be a valid experiment?

No- Even if an experiment is conducted in a naturalistic field setting to enhance external validity, the experiment is invalid if it does not also have internal validity.

What are the symbols of experimental design?

O= the measurement of a dependent variable X= the manipulation, or change, of an independent variable R= Random assignment of subjects to experimental and control groups E= experimental effect- the change in the dependent variable due to the independent variable

What are simulated test markets (STMs)?

One in which a limited amount of data on consumer response to a new product is fed into a model containing certain assumptions regarding planned marketing programs, which generates likely product sales volumes.

What are electronic test markets?

One in which a panel of consumers has agreed to carry identification cards that each consumer presents when buying goods or services. **Conducted only in a small number of cities in which local retailers have agreed to participate.

What is the standard test market?

One in which the firm test the product or marketing mix variables through the company's normal distribution channels.

What are controlled test markets?

One that is conducted by outside research firms that guarantee distribution of the product through pre-specified types and numbers of distributors.

If a researcher wants to report on the accuracy of a sample survey, what must they do?

Plan exactly how the population will be sampled and how many people will be surveyed.

Define longitudinal studies

Repeatedly measure the same sample units of a population over a period of time. - Described as "movies" of the population because they involve multiple measurements. - Employed by most of the largest companies that use marketing research.

How can a researcher ensure the success of a longitudinal study?

Researchers must have access to the same members of a sample, so as to take repeated measurements.

What are common dependent variables?

Sales Market share Customer satisfaction Sales force turnover Time spent on site Unique net profits RONW (return on net worth)

What are cross-sectional studies often referred to as?

Sample surveys

Define continuous panels

Samples of respondents who agree to answer the same questions at periodic intervals. - Panel members are asked to record the same type of information on an ongoing basis. - Example- Recording grocery store purchases in a diary or scanner.

Define panel

Samples of respondents who have agreed to provide information or answer questions at regular intervals.

What are test-market cities?

Selected geographical areas in which to conduct the test.

What are focus groups?

Small groups brought together and guided by a moderator through an unstructured, spontaneous discussion for the purpose of gaining information relevant to the research problem.

Define brand-switching studies

Studies that examine the extent that consumers are loyal to one brand.

Define market-tracking studies

Studies that monitor the same variables of interest over time such as market share or unit sales. Example- by tracking SKU over time, managers can learn a great deal about what is happening in the marketplace.

What are some examples of natural settings that marketing experiments might be conducted in?

Supermarkets, malls, retail stores and consumers' homes.

Much of the experimentation in marketing, conducted as field experiments, is known as ____________________________.

Test Marketing

What is A/B testing?

Testing two alternatives (A and B) to see which one performs better.

What is the "ideal" city, in terms of representativeness?

The city whose demographic characteristics most closely math the desired total market.

Define external validity

The extent to which a researcher can be certain that a relationship observed between independent and dependent variables during an experiment would occur under real-world conditions. **If an experiment is so contrived that it produces behavior that would not likely be found in the real world, then the experiment lacks external validity.

Define internal validity in an experimental study

The extent to which the researcher is certain that a change in a dependent variable is actually due to the independent variable. **Another way of asking if the proper experimental design was used and if it was implemented correctly. **Experiments lacking internal validity have little value because they produce misleading results.

Define secondary data analysis.

The process of searching for and interpreting existing information relevant to the research topic.

How do experience surveys differ from surveys conducted as part of descriptive research?

There is usually no formal attempt to ensure that the survey results are representative of any defined group of subjects.

What is the advantage of discontinuous panels?

They represent a group of persons who have made themselves available for research. Represent existing samples of consumers that may be quickly accessed for a wide variety of purposes.

Define laboratory experiments

Those in which one or more independent variables are manipulated and measures of the dependent variable are taken in an artificial setting for the purpose of controlling all extraneous variables that may affect the dependent variable.

Define field experiments

Those in which the independent variables are manipulated and the measurements of the dependent variable are taken in their natural setting.

How are causal relationships examined?

Through the use of experiments

How is A/B testing often used?

To compare website designs to determine which design is more effective. Website traffic can be split between design A and design B, with an important measure such as sales or repeat visitors. The measure is compared between the two websites to determine which design is superior.

Why do organizations use A/B testing? What are some examples?

To determine which of two or more alternatives involved in marketing a product is better, such as two pricing levels, two types of packaging, or two different brand names.

How are cross-sectional studies normally designed?

To represent the population of interest and employ fairly large sample sizes.

Define descriptive research

Undertaken to collect data to examine the characteristics of consumers and/or markets. **Answers the questions- who our customers are, what brands they buy and in what quantities, where they buy the brands, when they shop, and how they found out about our products. **Descriptive research is also desirable when we wish to project a study's findings to a larger population. If the study's sample is representative, the findings might be used to predict some variable of interest, like sales.

Define exploratory research

Unstructured, informal research that is undertaken to gain background information about the general nature of the research problem. (unstructured means that there are no predetermined set of procedures. The nature of the research changes as the researcher gains information). (informal means there are no formal set of objectives, sample plan or questionnaire)

Define casual research

Used to measure causality in relationships, such as "if x, then y".

Define independent variable

Variables over which the researcher has control and wishes to manipulate to measure the effect on the dependent variable.

Define dependent variable

Variables that are measured in response to changes in the independent variables.

Define discontinuous panels

Vary questions from one panel measurement to the next. - Sometimes referred to as Omnibus panels (omnibus means "including or covering many things or classes") - Can be used for a variety of purposes and the information collected by a discontinuous panel varies from one panel measurement to the next. - Primary usefulness is that it represents a large group- people, stores, or some other entity- and its members are agreeable to providing marketing research information.

When is exploratory research usually conducted?

When the researcher does not know much about the problem and needs additional information or desires new or more recent information. Usually conducted at the outset of research projects.