Chapter 7 Causal Designs

Issues Addressed l conditions of causality l what is an experiment? l differences between a lab vs field experiment l two types of experimental validity l extraneous factors that affect validity l types of experimental designs l test marketing and types of test markets

Conditions of Causality l Concomitant variation »extent to which the cause (X) and the effect (Y) occur together –e.g., advertising and sales l Time Order of Occurrence of Variables »X has to occur before Y l 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? l is a scientific investigation in which one or more independent variables are manipulated and the effect on a dependent variable is observed. l other potential independent variables are controlled l class to come up with an experiment

Field versus Lab Experiments l Lab Experiment »create a situation with desired conditions »manipulate some variables while controlling others »examine the dependent variable l 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 l 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.) l 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 l History l Maturation l Testing l Instrument Variation l Selection Bias l Experimental Mortality

History l specific events, external to the experiment l occurring at the same time as the experiment l that may affect the dependent variable l e.g., refrigerator pricing l usually difficult to identify history factors

Maturation l changes occurring within the test units l which are not due to the effects of the experimental variable l e.g., tired, hungry, not attentive l effects observed may then be partly attributable to the changes in the test unit l particularly relevant in longitudinal studies l respondents may undergo changes in taste, family status, knowledge level

Testing l the process of experimentation itself affects the observed response l 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 cross- sectional studies »affects internal validity of the experiment

Testing (cont.) l 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 l effect of changes in the measuring instruments on what is being measured l could also occur because of variability in administration l pricing study

Selection Bias l occurs when it is difficult to certify that groups of test units are equivalent l matching and randomization techniques

Experimental Mortality l loss of test units during an experiment l comparison of units lost with units retained

Controlling Extraneous Variables l randomization l matching l statistical control l design control

Types of designs l Preexperimental l True Experimental l Quasi-experimental

Pre-experimental Designs l One Shot Case Study l One Group Pretest-Posttest Design l Static Group Design

True Experimental Designs l Pretest-Posttest Control Group Design l Posttest-Only Control Group Design

Quasi-Experimental Design l Time Series Design

Market Test l 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” l is the final gauge of consumer acceptance l three out of four products test marketed succeed, while four out of five that have not been test marketed fail

Types of Test Markets l Standard Test Markets »products sold thru’ normal distribution channels »results monitored by a standard syndicated service l Controlled Test Markets »entire test program is done by an outside service l Electronic Test Markets »variant of controlled markets »use of consumer panels to measure purchases and TV viewing behavior l Simulated Test Markets »use of a simulated shopping environment »fast, cheap, protection from competitors