1. Chapter Eight
Experimentation in Marketing
Research

2.  Explain the difference between descriptive
and experimental research
 Identify the three conditions indicating
that one variable has a causal influence
on another
 Discuss the most appropriate applications
of laboratory and field experiments
 List and explain the threats to internal
validity and external validity of
experimental results
Chapter Objectives
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3.  Explain the difference between pre-
experimental and true experimental
designs
Chapter Objectives (Cont’d)
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4.  Eddie Bauer, a leading tri-channel
specialty retailer was looking for a way to
draw more shoppers into their stores
 Indiana University students conducted an
in-store advertising experiment using
electronic window posters (images
displayed on plasma screens) on 3
selected stores
Eddie Bauer's Electronic Windows
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5.  RESULTS
◦ The number of passersby who entered the
control stores went up 7 percent
◦ Sales soared 56 percent compared to the
weeks before the installation of digital windows
Electronic Windows (Cont’d)
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6.  An experiment is a procedure in which a
company manipulates one (or sometimes
more than one) independent or cause
variable and collects data on the
dependent or effect variable while
controlling for other variables that may
influence the dependent variable
Experiment
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7. Advertising Experiment Will replacing commercial A with commercial
B lead to a marked increase in consumer
preference for a company’s brand?
Pricing Experiment Can a company improve the profitability of
its fashion clothing line by increasing its
price by 10 percent?
Sales Productivity Experiment Will an increase in the average number of
sales calls per customer from six to eight
per year significantly improve sales?
Shelf Space Experiment Will decreasing the shelf space allocated to
brand X detergent by 25 percent
significantly lower its sales?
Direct Mail Experiment Will it be worthwhile to mail last year's
donors an attractive (but expensive)
brochure describing the company’s activities
and soliciting higher contributions for this
year? 8|7

8.  This research asks consumers whether
they would buy more of a product if its
price were lowered
 Descriptive survey data will merely
suggest causation
Descriptive Research
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9.  Manipulates the independent variable or
variables before measuring the effect on
the dependent variable
◦ The effect of price changes on sales volume of
a particular product can be examined by
actually varying the price of the product
 The very basis of experimental research
lies in the manipulation of independent
variables
Experimental Research
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10.  Temporal ordering of variables
◦ X  Y not Y  X
 Evidence of association
◦ X and Y are related ; presence of X  presence
of Y; absence of X  absence of Y
 Control of other causal factors
◦ X  Y, Z  Y
Conditions For Inferring Causality
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11.  A laboratory experiment is a research study
conducted in a contrived setting in which the
effect of all, or nearly all, influential but
irrelevant independent variables is kept to a
minimum
 A field experiment is a research study
conducted in a natural setting in which the
experimenter manipulates one or more
independent variables under conditions
controlled as carefully as the situation will permit
Laboratory vs. Field Experiments
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12.  Internal validity is the extent to which
observed results are solely due to the
experimental manipulation
 Laboratory experiments are generally high
on internal validity
 Field experiments are generally low on
internal validity
Internal Validity
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13.  External validity is the extent to which
observed results are likely to hold beyond
the experimental setting
 Laboratory experiments are generally low
on external validity
 Field experiments are generally high on
external validity
External Validity
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14.  Practical Considerations
◦ Time
◦ Cost
◦ Exposure to competition
◦ Nature of the manipulation
Deciding Which Type of
Experiment to Use
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15.  Dunkin Donuts and Baskin-Robbins are
now offered in “combo” stores
 KaBloom is testing kiosk flower sales in a
variety of locations
 Utilities companies are experimenting with
providing Internet services via existing
power lines
Test Marketing
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16.  McDonald's test-marketed McPizza to
strengthen the after-4pm adult market
◦ Introduced McPizza with heavy advertising,
emphasizing speedy service for pizza
◦ McPizza received favorable nods in some test
markets and had partial rollout nationally
McDonald's Tests McPizza
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17.  Pizza Hut, a leading competitor, reacted
aggressively to McDonald's move by
running a buy-one-get-one-free
promotion wherever McPizza was
introduced
 The sales performance of McPizza did not
meet management's expectations
McDonald's Tests McPizza
(Cont’d)
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18.  Step #1 Pre-recruitment
 Step #2 Background: habits and practices
 Step #3 Exposure to real advertising in a
competitive context
 Step #4 Simulated store purchase
 Step #5 Post: purchase inquiry
 Step #6 Respondents take product home
for usage
 Step #7 Post: usage evaluation
Simulated Test Marketing
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19.  Created a virtual store to determine how
products catch a consumer's eye
 Computer 3-D graphics create a feeling of
being in a store, walking past shelves of
grocery items just as in a real store
 Consumers can pick items off the virtual
shelves to examine them as in real store
and can select items they would buy
Virtual Test Markets-- Ray Burke,
Professor of Business Administration
at Indiana University
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20.  Virtual simulated marketing tests will
enable companies to examine consumers'
reactions to new products, product line
extensions, prices, packaging, and
merchandising
Virtual Test Markets
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21.  Electronic scanners at the checkouts capture
the product sales
 Marketers of packaged goods conduct
sophisticated field experiments
 The data from the stores are transmitted
electronically to central computers for analysis
and interpretation
 Information Resources Inc. (IRI) and ACNielsen
offer marketers a variety of services through
their information system called
BehaviorScan and Scantrack
Scanner Data Analysis
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22.  Web-based experimentation will enable
companies to test a wide range of possible
marketing mix changes and statistically
model consumer responses to these
changes
Web-Based Experiments
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23.  Random people were selected while
visiting the company’s website
 The questionnaire asked them to complete
a short questionnaire while on the site
 Participants are shown random test
banner ads
 Participants fill out a second survey,
answering questions about the impact of
the banner ads on their impressions of the
brand
Web-based Experiments Conducted
to Test the Effectiveness of Banner
Advertising
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24.  What are the independent variables?
 What is the dependent variable?
 What are some validity threats?
Web-based Experiments Conducted
to Test the Effectiveness of Banner
Advertising (Cont’d)
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25.  The presence of any condition or
occurrence (other than the independent
variable manipulation) that can offer a
compete explanation for the experimental
results is a threat to internal validity
Internal Validity
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26.  History
 Maturation
 Pretesting
 Instrument Variation
 Selection
 Mortality
Threats to Internal Validity
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27.  External validity of experimental results relates
to their generalizability
 The various internal validity threats also
indirectly affect external validity
 Biases that stand in the way of generalizing
experimental results:
◦ Reactive bias
◦ Pretest-manipulation interaction bias
◦ Non-representative-sample bias
Threats To External Validity
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29.  Pre-experimental designs exert little or
no control over the influence of
extraneous factors
 These studies are not much better than
descriptive studies when it comes to
making causal inferences
 Pre-experimental: emphasizes the fact
that these studies are more exploratory
than conclusive as far as causal
inferences are concerned
Pre-Experimental Designs
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30.  O = observation or measurement
 X = experimental manipulation
 EG = experimental group
 CG = control group
 (R) = random assignment
Notations for Describing
Experimental Designs
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31.  One Group, After Only
◦ EG X O
 One Group, Before and After
◦ EG O1 x O2
 Two Group, Post Hoc
◦ EG X O1
◦ CG O2
Pre-Experimental Designs
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32.  Casual inference from a one-group, after-
only design cannot be trusted entirely
One-Group, After-Only Design
(Cont’d)
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33.  The presence of one or more control
groups
 The random assignment of units to
various experimental and control groups
 Random assignment distributes the
sample units chosen for a study to various
groups on a strictly objective basis so that
the group compositions can be equivalent
before an experiment is started
True Experimental Designs
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