experimentation Flashcards
generally research is…
exploratory, descriptive or causal
exploratory research
no preconceived ideas
descriptive research
describing reality but no necessarily explaining it
causal
gives some idea of ‘why’
correlation…
does not mean causation! e.g. smoking linked with lung cancer: tobacco companies argued that there was another factor
strictly speaking the only was to prove a causal relationship is through…
experimentation
experimentation involves
an isolated piece fo reality, changing on variable, keeping all others the same, and observing the change n the dependent variable: this is an idealised pure experiment
what are we trying to learn?
trial rate and repeat rate
trial rate
what proportion of customers will try the offer?
repeat rate
what proportion of those who try it will buy again?
test marketing is…
the best known form of marketing experiment… a full launch but only in a limited geographical area
we assume that the limited geographical area is…
typical of the whole market so findings can be extrapolated
test marketing can…
test a new offer without the risk/expense of a full launch
test marketing can also be used to…
experiment using the marketing mix variables as IV’s to discover the effect on the DV’s like sales, market share and profit
problems with test marketing
- expensive: limited area is still quite big
- slow
- low internal validity (distortion by extraneous variables like weather, local economy, sabotage by competitors)
- tips off competitors
- limited number of good test market areas (they get ‘over tested’ so become atypical)
- failure can damage company morale and reputation (likely to happen)
- quite an unsubtly experiment
