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Exploring Marketing Research William G. Zikmund

Exploring Marketing Research William G. Zikmund. Chapter 12: Test Marketing . Test Marketing. Controlled experimentation. Not just trying something out. But scientific testing. Test Marketing.

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Exploring Marketing Research William G. Zikmund

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  1. Exploring Marketing ResearchWilliam G. Zikmund Chapter 12: Test Marketing

  2. Test Marketing Controlled experimentation Not just trying something out But scientific testing

  3. Test Marketing • An experimental procedure that provides an opportunity to test a new product or a new marketing plan under realistic market conditions to measure sales or profit potential.

  4. Functons of Test Marketing IDENTIFY AND CORRECT WEAKNESSES IN PLANS ESTIMATE OUTCOMES

  5. When not to Test? $$$$$ How Long Should a Test Last? Loss of Secrecy A Lengthy and Costly Procedure

  6. Pittsfield, Massachusetts Charlotte, North Carolina Columbus, Ohio Little Rock, Arkansas Evansville, Indiana Cedar Rapids, Iowa Eau Claire,Wisconsin Wichita, Kansas Tulsa, Oklahoma Omaha, Nebraska Grand Junction. Colorado Wichita Falls, Texas Odessa-Midland, Texas Popular Test Markets

  7. Selecting a Test Market • Population size • Demographic composition • Lifestyle considerations • Competitive situation • Media • Self-contained trading area • Overused markets - secrecy

  8. Control Method of Test Marketing • Small city • Low chance of being detected • Distribution is forced (guaranteed)

  9. The Advantages of Using the Control Method of Test Marketing • Reduced costs • Shorter time period needed for reading test market results • Increased secrecy from competitors • No distraction of company salespeople from regular product lines

  10. Some Problems Estimating Sales Volume • Over-attention • Unrealistic store conditions • Reading competitive environment incorrectly • Incorrect volume forecasts • Adjusted data • Penetration and repeat purchase rate • Time lapse

  11. High Tech Test Markets Electric Test Markets Simulated Test Markets Virtual-reality Simulated Test Markets

  12. Advanced Experimental Designs are More Complex • Completely randomized • Randomized block design • Latin square • Factorial

  13. Completely Randomized Design • An experimental design that uses a random process to assign subjects (test units) and treatments to investigate the effects of only one independent variable.

  14. Completely Randomized Designs Control: no music Experimental treatment: slow music Experimental treatment: fast music Average minutes shopper spends in store 16 18 12

  15. Independent Variable A Level 1 Level 2 Level 3 Group A Group B Group C

  16. Completely Randomized Design With a pretest posttest Group A R O1 X1 O2 Group A R O3 X2 O4 Group A R O5 X3 O6

  17. Completely Randomized Design With a posttest Group A R X1 O1 Group B R X2 O2 Group C R X3 O3

  18. Randomized Block Design • An extension of the completely randomized design in which a single extraneous variable that might affect test units’ response to the treatment has been identified and the effects of this variable are isolated by blocking out its effects.

  19. Randomized Block Design Independent Variables Control: no music Experimental treatment slow music Experimental treatment: fast music Mornings and afternoons Evening hours Blocking variable

  20. Factorial Design • An experiment that investigates the interaction of two or more variables on a single dependent variable.

  21. Independent Variable 1 No Music Slow Music Fast Music No Music cart signs Independent Variable 2 Grocery cart signs

  22. Factorial Design -- Roller Skates Package Design Price Red Gold $25 Cell 1 Cell 4 $30 Cell 2 Cell 5 $35 Cell 3 Cell 6

  23. Main effect The influence of a single independent variable on a dependent variable. Interaction effect The influence on a dependent variable by combinations of two or more independent variables. Effects

  24. 2 x 2 Factorial Design Ad A Ad B Men Women 65 65 Main Effects of Gender > 70 60 > Main Effects of Ad

  25. 100 90 80 70 60 50 40 30 20 10 Women Men Believability Ad A Ad B Interaction Between Gender and Advertising Copy

  26. Independent Variable 1 Level 1 Level 2 Level 1 Level 2 Group A Group B INDEPENDENT VARIABLE 2 Group D Group C

  27. 2 x 2 Factorial with a Pretest Posttest Group A R O1 X11 O2 Group B R O3 X21 O4 Group C R O5 X12 O6 Group D R O7 X22 O8

  28. 2 x 2 Factorial Design with a Posttest Measure Group A R X11 O1 Group B R X21 O2 Group C R X12 O3 Group D R X22 O4

  29. A Test Market Experiment on Pricing Sales in Units (thousands) Regular Price $.99 130 118 87 84 X1=104.75 X=119.58 Reduced Price $.89 145 143 120 131 X2=134.75 Test Market A, B, or C Test Market D, E, or F Test Market G, H, or I Test Market J, K, or L Mean Grand Mean Cents-Off Coupon Regular Price 153 129 96 99 X1=119.25

  30. Latin Square Design • A balanced, two-way classification scheme that attempts to control or block out the effect of two or more extraneous factors by restricting randomization with respect to the row and column effects.

  31. 1 2 3 1 A B C 2 B C A 3 C A B Order of Usage SUBJECT

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