1. Elements of Causal Designs
Experiments
Elements of Causal Designs

2. Causal Research
Research design in which the major emphasis is on determining cause-and-effect relationships. Most causal research is conducted as experiments—defined as manipulating an independent variable to see how it affects a dependent variable while also controlling the effects of additional extraneous variables

3. Showing a Causal Relationship
Concomitant variation--evidence of the extent to which X and Y occur together or vary together. Time order of occurrence of variables--evidence that shows X occurs before Y. Elimination of other possible causal factors—evidence that allows the elimination of factors other than X as the cause of Y.

4. Concomitant Variation:
Evidence of the extent to which X and Y occur together or vary together.
“Every time “X” occurs, “Y” follows
Following exposure to the ad, a significantly different, positive change in attitude toward the brand occurs.
Increases in “X are followed by an increase in Y.”

5. Temporal Precedence
If “X” is said to be a cause of “Y,” “X” must occur before “Y.”
Treatment comes before the measured result.
A pre-test, to determine a current state, precedes treatment, followed by a post-test.

6. Controlling for “Other Factors”
Random selection of subjects
Random assignment of subjects to treatments
Use of untreated condition, “control group”
Conditions which exclude or control for alternative explanations.

7. Experimental or Causal Designs
The most powerful, most easily argued means of identifying a cause and effect relationship.
Important when identifying the appropriate marketing action within a marketing strategy.
Effect of a specific ad on buyer motivations
Effect of various prices on buyer intentions
Effect of different products on category sales

8. Cigarettes and Health
“Second-hand smoke kills 50,000 people per year in the U.S.”
“Women who smoked during pregnancy had babies with a 10-15% lower birth weight.
“People who smoke 3 or more packs per day are 50% more likely to develop a respiratory illness.
“8th graders instructed to smoke 3 packs of cigarettes per day for six consecutive years had an 80% higher incidence of lung-cancer than a control group.”

9. Experiments in Marketing Research
Some research questions cannot be addressed with classical experimental designs, i.e., smoking causing cancer.
Causal design provides the clearest approach to marketing action.
Ethical questions are possible within marketing causal designs, but the instances of incidence is low with advertising and pricing research.

10. Elements of an Experiment
Independent Variable(s): Specific advertisement
Dependent Variable(s): Attitude (liking) ad/brand
Extraneous Variables: Age of respondent
Experimental Group: Views the ad
Control Group: Views alternative ad, or no ad
Pretest: Attitude to brand prior to commercial
Posttest: Attitude to brand following commercial

11. Experiment includes pretest and posttest.
EXPERIMENTAL DESIGNS
TRUE EXPERIMENTAL DESIGN
Before-After with Control Group
Experimental Group (R) O1 X O2
Control Group (R) O O4
Where E = (O2 - O1) - (O4 - O3)
Experiment includes pretest and posttest.

12. Assignment to
Groups
Treatment
group X
Treatment O1
Pretest O2
Posttest
Control
group

13. EXPERIMENTAL DESIGNS TRUE EXPERIMENTAL DESIGNS
After-Only with Control Group
Experimental Group (R) X O1
Control Group (R) O2
Where E = (O 2 - O1)
Without random assignment, you could not be sure the effect was attributable to the treatment.

14. EXPERIMENTAL DESIGNS QUASI-EXPERIMENTAL DESIGNS After-Only Design X O1
Where X = O1
One Group, Before-After Design O1 X O2
Where X = O2 - O1
Without control group, you cannot be certain the treatment created a difference (after-only) or that extraneous conditions weren’t the “cause (before-after)”

15. Campbell’s V8 Research Symptom and Problem Definition
Declining sales, low product recall
Research Problems and Designs:
Exploratory: Depth interviews, brand associations
Causal research: Advertising experiments
Descriptive: Theme selection, content analysis
Marketing Action
New advertising campaign

16. Unusual Aspects of the V8 Case
Exploratory, qualitative techniques led to advertising testing, skipping a stage of descriptive (conclusive) research.
Content analysis was used to evaluate an advertisement the company just created.
Illustrates how a rush to address symptoms (time and budget constraints) creates errors in marketing research.

17. VALIDITY OF EXPERIMENTS
Internal Validity
The extent to which the change in the dependent variable is actually due to the independent variable. or
Evidence demonstrating that the variation in the dependent variable was the result of exposure to the treatment, or experimental, variable.

18. VALIDITY OF EXPERIMENTS
External Validity
The extent to which the relationship observed between the independent and dependent variables during the experiment is generalizable to the “real world”.
The extent, to what populations and settings, to which the observed experimental effect can be generalized.

19. TYPE OF EXPERIMENTS “Laboratory” Experiments
Setting: Controlled, “laboratory” setting
Internal validity: Highest certainty of treatment effect
External validity:
Field Experiments
Setting: Realistic, market setting
Internal validity:
External validity: Highest certainty that results can be replicated in the market.

20. MARKET TEST Ultimate Field Experiment
A controlled experiment done in a limited but carefully selected sector of the marketplace; its aim is to predict the sales or profit consequences, either in absolute or relative terms, of one or more proposed marketing actions .

21. TEST MARKETING
TYPES OF TEST MARKETS
Standard Test Market: One or two cities, same wholesalers, retailers.
Controlled Test Market: Rack jobber controls on shelf inventories.

22. In standard test markets, cities form the treatment groups
Treatment cities receives the new product, control cities do not.
Treatment cities receive price reductions, coupons, special advertising, control cities do not.
Includes realistic competitive setting using existing distribution system.

24. Household “Panels” & Longitudinal Designs
“Panel” is group of respondent that agree to repeated participate in a research design.
“True” panel is one where individual respondents are tracked for change, part of longitudinal designs.
Also used in experimental designs, when a “treatment” can varied among panel members, and differences can be monitored.

25. TEST MARKETING
TYPES OF TEST MARKETS
Standard Test Market: One or two cities, same wholesalers, retailers.
Controlled Test Market: Rack jobber controls on shelf inventories.
Electronic Test Market: Panel of households agree to be monitored
Simulated Test Market (STMs): Laboratory studies

26. CRITICAL PROBLEMS OF TEST MARKETING
COST: Standard test markets require major promotional budget to shorten the time needed to measure repurchase
TIME: It may take 10 or 11 months to be completely sure with results
CONTROL: Competitors may monitor results or other unintended competitor behavior may ruin the results.

27. Criteria for Selection of a Test Market City
Representativeness: Large, sufficiently diverse
Degree of Isolation: Media and distribution isolation
Ability to Control Distribution and Promotion:

28. Increasing of risks with Test Markets
Simulated
Test Market
Promising
Not Promising
Abort
Controlled
Test Market
Promising
Not Promising
Abort
Standard
Test Market
Not Promising
Abort
Promising
National
Rollout