Business Research Method

1. Business Research Method Experimentation

2. Experiment . Experiment: A research method in which conditions are controlled so that one or more independent variables can be manipulated and their effect on dependent variable is measured . To study impact of a sports coach on cricket team’s performance an experiment can be conducted

3. Experiment .-A research investigation in which conditions are controlled -One independent variable is manipulated (sometimes more than one) -Its effect on a dependent variable is measured -To test a hypothesis

4. Some Definitions • Absolute Experiment: If we want to know impact of a sports coach on cricket team’s performance it is an absolute experiment • Comparative experiment :If we want to know impact of one sports coach on cricket team’s performance compared to impact of another sports coach on cricket team’s performance it is a comparative experiment • Experimental units: Subjects or entitiessubjected to various treatments are called experimental units

5. Some Definitions - Experimental group: The group of subjects exposed to an experimental treatment. Group of students provided with a sport coach • Control Group :A group of subjects who are exposed to the control conditions in an experiment, that is they are subjects not exposed to the experimental treatment Group of students not provided with a sports coach

6. Treatment • Treatment: It refers to conditions to which experimental groups are subjected and control groups are not subjected Provision of sports coach

7. Extraneous Variable • Extraneous variable: Independent variables that are not directly linked with the study but may influence dependent variable: • If the study wants to test a hypothesis that a relationship exists between academic achievement and self concept of children then academic achievement is dependent and self concept is independent variable. • Intelligence may also affect academic achievement but it is not related to study’s purpose and hence it is an extraneous variable.

8. Experimental Design • Experimental Design is a set of procedures specifying --Manipulation of the Independent Variable --Selection of Dependent Variable --Experimental groups & Control groups --Control Over Extraneous Variables

9. Manipulation of independent Variable • The experimenter has some degree of control over the independent variable • The variable is independent because its value can be manipulated by the experimenter. • To test relationship between package design & sales • Expose customers to three package designs A,B &C. These packs are placed on shelves of select outlets • Consumers’ response is measured • Package design is independent variable ,which is manipulated & there are 3 treatment levels A,B & C

10. Selection of Dependent Variable • Selection of dependent variable is another important decision • Sales volume of the product is considered as dependent variable in package design example • Selecting dependent variable may not be easy in all cases • To evaluate effectiveness of various ad programmes dependent variable can be brand image, brand awareness & product sales • Purpose of the research helps in selection of appropriate dependent variable

11. Experimental & Control Groups • Experimental group is a group of test units exposed to change in independent variable • Control group is a group of test units not exposed to change in independent variable • In package design example a group of supermarkets (Experimental group) is selected & each package design is displayed for a month • Another group of supermarkets (Control group) continue to carry regular package design for that period • Sales of product are measured for both groups & difference in sales is analysed to find out impact of design on sales

12. Controlling Extraneous Variables • Extraneous (Confounding) variables need to be controlled otherwise it is difficult to find out whether the change in dependent variable is due to change in independent variable or change in extraneous variable

13. Ways to control extraneous variable • Randomization • Hold Conditions Constant • Matching Subjects • Design Control • Statistical Control

14. Randomisation • Process of assigning test units randomly to experimental treatments and assigning experimental treatments randomly to test units • It helps to spread effects of extraneous variable equally over the test units • Most popular method • Not effective for small samples ----Department stores assigned randomly to Experimental & Control groups ----If 3 versions of test commercials are to be assigned to 3 groups then one commercial is selected at random & assigned to a randomly selected group & process is repeated

15. Physical Control of Extraneous Variables • Hold Conditions Constant: The level of extraneous variables is kept constant throughout the experiment -- If price is the extraneous variable prices are not changed during experimental period

16. Physical Control of Extraneous Variables • Matching Subjects: Judgmental sampling is used to assign test units to both experimental group & control group so that both groups are matched in terms of characteristics of test units • ---Department stores are matched on the basis of annual sales, size and location. One store from each matched pair would be assigned to each experimental group & other to control group

17. Statistical Control • Extraneous variables affecting dependent variable are identified & measured using appropriate statistical tools like ANOVA. Then effects of extraneous variable on dependent variable are removed by statistical adjustments • If 5 departmental stores are used to study sales of products before & after in- house sales promotion then impact of the characteristics of the stores can be removed through use of ANOVA-randomised block design using department stores as blocks

18. Design Control • Selecting appropriate experimental designs to conduct experiments helps in controlling specific extraneous variables . • Experimental Designs are of 4 types -Pre Experimental -True Experimental -Quasi experimental -Statistical

19. Experimental Validity • Validity: Extent to which a research process is accurate & reflects actual market conditions • Internal Validity: It measure the extent of change in dependent variable in an experiment caused by manipulation of independent variable .( Not vitiated by extraneous variables) • External Validity :It measures to what extent inferences derived from experiment can be generalised to real environment

20. Internal Validity • Control of extraneous variable is a necessary condition for establishing internal validity • Internal validity is the basic minimum requirement of an experiment • Six major types of extraneous variables are threats to internal validity

21. Factors Influencing Internal Validity • History • Maturation • Testing • Instrumentation • Selection • Mortality

22. Type of Extraneous Variable Example While test marketing new farm equipment area gets affected by floods Impact of promotional campaign for a car gets affected by steep price rise in petrol Drug trials carried over longer period of time results in some effect on account of physiological changes Questionnaire about the traditional role of women triggers enhanced awareness of women in an experiment. History - Specific events in the environment between the Before and After measurement that are historic in nature (rare occurrence) Maturation - Subjects change during the course of the experiment due to passage of time. Subjects become tired Testing - The Before measure alerts or sensitizes subject to nature of experiment or second measure.

23. New questions about women are interpreted differently from earlier questions. Heavy users in experimental group & moderate & low users in control group Subjects in TV viewing study drop out before completion Instrument -Changes in instrument to minmise testing effect result in response bias Selection – test units selected for experimental group differ from those assigned to control group Mortality - Sample attrition; some subjects withdraw from experiment

24. External Validity • Experiments conducted in natural settings offer more external validity as compared to experiments in controlled conditions. • Since generalisation is easier with field conditions

25. Experimental Environment • Laboratory Environment: Experiments conducted in controlled conditions ---Showing ads or products to select consumers in controlled conditions ----blind taste tests • Advantages- • Effects of extraneous variables can be minimised • -History effects eliminated • -Provides more internal validity • -time & cost effective • -reduces the risk of information about products & ideas being passed on to competitors • Disadvantages • -Expts conducted in artificial conditions &results may not hold well in actual conditions • -less external validity • -results influenced by testing effects ,Test units aware of being tested & may not respond naturally

26. Field Environment • Experiments conducted in natural settings --Launching products in select regions --Observing consumer behaviour regarding a POP display in supermarkets --analysing customer response to trial offers • Advantages • -high degree of external validity • Disadvantages • -Low degree of internal validity • -Require greater time& efforts and are expensive

27. Laboratory Experiment Field Experiment Artificial-Low Realism Natural-High Realism Few Extraneous Variables Many Extraneous Variables High control Low control Low Cost High Cost Short Duration Long Duration Subjects Aware of Participation Subjects Unaware of Participation

28. Different Basic Experimental Designs • Pre-Experimental Designs • True Experimental Designs • Quasi Experimental Designs • Statistical Designs

29. Notations • X: Treatment or manipulation of independent variable • O: Observation or measurement of dependent variable • R: Random assignment of test units to experimental groups • EG : Experimental group exposed to experimental treatment • CG :Control group not exposed to experimental treatment • Notations in the diagram are read from left to right

30. Conventions • Movement from left to right indicates movement through time • Horizontal alignment of symbols implies that all those symbols refer to specific treatment group • Vertical alignment of symbol implies that those symbols refer to activities or events that occur simultaneously

31. Examples • X O1 O2 means that a given group of test units was exposed to treatment variable X and the response was measured at two different points in time ,O1 and O2 • R X1 O1 R X2 O2 means that two groups of test units were randomly assigned to two different treatment groups at the same time and the dependent variable was measured in two groups simultaneously

32. Pre-Experimental Designs ---They lack proper control mechanism to deal with effects of extraneous variables --- Randomization is absent One Shot Design (After Only) One Group Pretest-Posttest Static Group Design

33. One Shot Design (After Only) • It involves exposing experimental group to treatment X after which the measurement (O1) of dependent variable is taken . • EG : X O1 • To measure effectiveness of a test commercial • TV programme containing test Ad (X) is selected • Telephone interviews are conducted of respondents who report having watched the TV programme previous night • Respondents are asked whether they recall having seen the Ad. Measurements of Dependent variable are recalls (O1) • Recalls are compared with norm scores for interpretation.

34. One Shot Design (After Only) Drawbacks • No random assignment of test units • Extraneous variables are not controlled • Internal validity low • There is no other measurement against which O1 can be compared (what would happen if X was absent)

35. One Group Pretest -Posttest • Exposing an experimental group to experimental treatment (X) and taking measurements of dependent variable before(O1) and after(O2) the treatment • EG: O1 X O2 • Difference between O1 and O2 measures the impact of treatment on dependent variable • To measure effectiveness of a test commercial • Respondents are recruited on the basis of convenience • Administered a personal interview to measure attitude towards the product • Then they watch a TV programme containing Commercial • After watching TV programme they are again administered a personal interview to measure attitude towards product • Effectiveness of test commercial is measured as O2-O1 • Influenced by maturation,testing ,mortality, selection bias affecting IV

36. Static Group Design • Two groups of test units are involved EG &CG • EG is exposed to treatment CG is not exposed • Measurements are taken for both groups after Expt. • EG: X O1 • CG: O2 • Difference between O1& O2 is effect of treatment • To test effectiveness of TV commercial • Two groups of respondents are recruited • EG is exposed to TV programme containing Ad • Attitude towards product of both EG &CG are measured • Effectiveness of test Ad is measured as O1-O2 • Selection bias ,mortality affects results with less IV

37. True Experimental Designs ---Use randomisation & one or more control groups to reduce effect of extraneous variables Pre test – Post test Control Group Design Post –test only Control Group Design Solomon Four Group design

38. Pretest-Posttest Control Group Design • Two groups of test units EG &CG are considered • Test units are assigned to these 2 groups randomly • Pre test measurements of dependent variable are taken for both groups • EG is exposed to treatment • Post test measurements of dependent variable are taken for both groups • EG: R O1 X O2 • CG: R O3 O4 • Treatment Effect (TE) is (O2-O1)-(O4-O3)

39. Pre Test Post Test Control Group Design • To measure effectiveness of a TV commercial • Sample of respondents is selected at random • Half of these would be randomly assigned to EG & other half would form CG • Both groups would be administered a questionnaire to obtain pre-test measurement on attitude towards the product • Only EG would be exposed to TV programme containing commercial • Then respondents in both groups would be administered a questionnaire to obtain post test measurements on attitude towards product • Effectiveness measure is (O2-O1)-(O4-O3) • This design provides accurate results & addresses most of extraneous variables accept testing effects

40. Posttest test only Control Group Design • Both EG & CG are formed by random assignment of test units • EG is exposed to experimental treatment CG is not • Post test measurement of dependent variable is taken for both the groups • EG: R X O1 • CG: R O2 • Treatment Effect (TE) equals O1-O2

41. Posttest Only Control Group Design • To measure effectiveness of a TV commercial • Sample of respondents is selected at random • Half of these would be randomly assigned to EG & other half would form CG • Only EG would be exposed to TV programme containing commercial • Then respondents in both groups would be administered a questionnaire to obtain post test measurements on attitude towards product • Difference in attitudes of EG &CG is used as effectiveness measure

42. Posttest Only Control Group Design • Involves only 2 groups & one measurement • Significant advantage in terms of time ,cost & sample size • Selection bias & mortality which are the major drawbacks can be controlled through carefully designed experimental procedures • Because of its simplicity it is most popular in marketing design

43. Solomon Four Group Design • It involves 4 groups ,2 EGs & 2 CGs • Six measurements are taken 2 pretest &4 posttest • Also known as 4 group 6 study design • EG: R O1 X O2 • CG: R O3 O4 • EG: R X O5 • CG: R O6 • Design provides various observations which can be analysed • (O2-O1) –(O4-O3) ; O5-O6 • Addresses all extraneous variables but is expensive & consumes time & efforts

44. Quasi Experimental Designs • Are used when randomisation is not possible & timing of test presentation lacks control of researcher • Not as effective as true designs but better than pre-design • Prominent is Time Series Design • A series of measurements are taken on dependent variable for a group of test units before & after the experimental treatment • O1,O2,O3 X O4, O5, O6 • Trends before treatment are compared with trends after treatment to determine effectiveness of treatment • Aids in identifying permanent change & temporary change • Threats on account of history & instrumentation

45. Quasi Experimental Designs • To test effectiveness of a test commercial • Broadcasting test commercial a predetermined number of times & examining data from a pre-existing test panel • Scheduling of test commercial can be controlled but it is uncertain when or whether panel members are exposed to it • Purchases of panel members before ,during and after the campaign are examined to find out whether test commercial has a short term effect ,long term effect or no effect • To find out impact of price change on sales of a product, a series of observations are taken before the price change &after the price change. Trends before treatment are compared with trends after treatment to determine change

46. Multiple Time Series Design • Similar to time series except that another group of test units is added to serve as control group • EG:O1,O2,O3 X O4,O5,O6 • CG:O7,O8,O9 O10,O11,O12 • Test commercial would be shown only in a few of test cities • Panel members in these cities would form EG • Panel members in the cities where commercial was not shown would constitute control group

47. History weak Maturation weak Testing not relevant Instrumentation not relevant Selection weak Mortality weak One-Shot DesignInternal Validity Problems

48. History weak Maturation weak Testing weak Instrumentation weak Selection controlled Mortality controlled One-Group Pretest-PosttestInternal Validity Problems

49. History controlled Maturation possible source of concern Testing controlled Instrumentation controlled Selection weak Mortality weak Static-Group DesignInternal Validity Problems

50. History controlled Maturation controlled Testing controlled Instrumentation controlled Selection controlled Mortality controlled Pretest-Posttest ControlInternal Validity Problems