It’s in the Bag
LeSportsac. Inc. file dasuit against Kmart Corporation after Kmart introduced a “di Paris sac” line of bags. which LeSportsac claimed looked like its bags. According to LeSportsec, Kmart led consumers to believe that they were purchasing LeSportsac bags when they were not. To prove its point. LeSportsac undertook causal research.
Two groups of women were selected. One group was shown two LeSportsac lightweight soft-sided bags from which all tags were removed and all words and designs were printed over within the distinctive LeSportsac ovals. The second group of women were shown two “di Paris sac” bags with the brand name visible and bearing the tags and labels these bags carry in Kmart stores. Information was obtained from both groups of women to learn whether or not these women perceived a single company or source and/or brand identification of the masked bags. what identifications they made. if any. and the reasons they gave for doing so. The sample consisted of 200 women in each group selected by mall-intercept interviews conducted in Chicago. Los Angeles. and New York. Rather than utilizing a probability sample. the respondents were selected in accordance with age quotas.
Rite Aid Drug Co.conducted an experiment to examine the effectiveness of in-store radio advertisements to induce point-of-purchase (POP) buys. Twenty statistically compatible drugstores were selected based on store size. geographical location. traffic now count. and age. Half of these were randomly selected as test stores. whereas the other half served as control stores. The test stores aired the radio advertisements. whereas the control stores’ POP radio systems were removed. Tracking data in the form of unit volume and dollar sales were obtained for seven days before the experiment. duhng ihe course of the four-week experiment. and seven days after the experiment. The products monitored varied from inexpensive items to small kitchen appliances. Results indicated that sales of the advertised products in the test stores at least doubled, Based on this evidence, Rite Aid concluded that in-store radio advertising was highly effective in inducing pop buys and decided to continue it
In 2009, Point of Purchase Advertising International reported a study 10 dete nnine the effectiveness of POP advertising. The study found that only 30 percent of drugstore shoppers read retailer advertisements, picked up an in-store circular, or arrived at the store with a shopping list. However, 34 percent of shoppers questioned after leaving the store could recall seeing or hearing advertisements or announcements made inside the store. Anheuser-Busch, Pepsi/Frito-Lay, Pfizer. Procter & Gamble, and Ralston-Purina sponsored this study, All these companies sell products that can benefit from point-of-purchase advertising. and based on these results decided to increase their POP promotional budget
Concept of Causality
Experimentation is commonly used to infer causal relationships. The concept of causality requires some explanation. The scientific concept of causality is complex. “Causality” means something very different to the average person on the street than to a scientisr.’ A statement such as “X causes Y” will have different meanings to an ordinary person and to a scientist, as seen in the accompanying table.
The scientific meaning of causality is more appropriate to marketing research than is the everyday meaning. Marketing effects are caused by multiple variables, and the relationship between cause and effect tends to be probabilistic. Moreover, we can never prove causality (i.e., demonstrate it conclusively); we can only infer a cause-and-effect relationship. In other words, it is possible that the true causal relation, if one exists, may not have been identified. We further clarify the concept of causality by discussing the conditions for causality.
Which Comes First?
Recent statistical data show that consumers increasingly make buying decisions in the store while they are shopping, Some’ studies indicate that as much as 80 percent of buying decisions are made at point of purchase (POP). POP buying decisions have increased concurrently with increased advertising efforts in the stores. These include radio advertisements, ads on shopping carts and grocery bags, ceiling signs. and shelf displays. It is estimated that brand and retail owners spent more than $1 billion in 2008 trying to influence the consumer at the point of purchase. It is difficult to ascertain from these data whether th~ increased POP decision making is the result of increased advertising efforts in the store, or whether the increase in store advertising results from attempts to capture changing consumer attitude, toward purchasing and to capture sales from the increase in POP decision making. It is also possible that both variables may be causes and effects in this relationship
Role of Evidence
Evidence of concomitant variation, time order of occurrence of variables, and elimination of other possible causal factors, even if combined, still do not demonstrate conclusively that a causal relationship exists. However. if all the evidence is strong and consistent, it may be reasonable to conclude that there is a causal relationship. Accumulated evidence from several investigations increases our confidence that a causal relationship exists. Confidence is further enhanced if the evidence is interpreted in light of intimate conceptual knowledge of the problem situation. Controlled experiments can provide strong evidence on all three conditions
Definitions and Concepts
In this section, we define some basic concepts and illustrate them using examples. including the LeSportsac and Rite Aid examples given at the beginning of this
DEPENDENT VARIABLES Dependent variables are the variables that measure the effect of the independent variables on the test units. These variables may include sales, profits, and market shares, The dependent variable was brand or source identification in the LeSportsac example and sales in the Rite Aid example.
EXPERIMENTAL DESIGN An experimental design is a set of procedures specifying (I) the test units and how these units are to be divided into homogeneous subsamples, (2) what independent variables or treatments are to be manipulated. (3) what dependent variables are to be measured. and (4) how the extraneous variables are to be controlled.”
Taking Coupons at Face Value
An experiment was conducted to test the effects of the face value of coupons on the likelihood of coupon redemption, controlling for the frequency of brand usage. Personal interviews were conducted in greater New York area with 280 shoppers who were entering or leaving a supermarket. Subjects were randomly assigned to two treatment groups, One group was offered IS-cent coupons and the other 50-cent coupons for four products: Tide detergent, Kellogg’s Com Rakes, Aim toothpaste. and Joy liquid detergent. During the interviews, the respondents answered questions about which brands they used and how likely they were to cash coupons of the given face value the next time they shopped. An interesting finding was that higher face value coupons produced higher likelihood of redemption among infrequent or non buyers of the promoted brand but had little effect on regular buyers, America’s love affair with the coupon continued in 2007 as 257 billion coupons were distributed within newspaper free-standing inserts (FSls). According to the annual Marx FSI Trend Report, this represented a 1.5 percent increase in comparison to 2006. This represented over $320 billion in consumer incentives
Validity in Experimentation
When conducting an experiment, a researcher has two goals: (1) draw valid conclusions about the effects of independent variables on the study group, and (2) make valid generalizations to a larger population of interest. The first goal concerns internal validity; the second, external validity.
Internal validity refers to whether the manipulation of the independent variables or treatments actually caused the observed effects on the dependent variables. Thus, internal validity examines whether the observed effects on the test units could have been caused by variables other than the treatment. If the observed effects are influenced or confounded by extraneous variables, it is difficult to draw valid inferences about the causal relationship between the independent and dependent variables. Internal validity is the basic minimum that must be present in an experiment before any conclusion about treatment effects can be made. Without internal validity. the experimental results are confounded. Control of extraneous variables is a necessary condition for establishing internal validity
External validity refers to whether the cause-and-effect relationships found in the experiment can . be generalized. In other words, can the results be generalized beyond the experimental situation. and if so, to what populations, settings, times, independent variables, and dependent variables can the results be projected? 10 Threats to external validity arise when the specific set of experimental conditions does not realistically take into account the interactions of other relevant variables in the real world
Maturation (MA) is similar to history except that it refers to changes in the test units themselves. These changes are not caused by the impact of independent variables or treatments but occur with the passage of time. In an experiment involving people, maturation takes place as people become older, more experienced. tired, bored, or uninterested. Tracking and market studies that span several months are vulnerable to maturation because” it is difficult to know how respondents are changing over time.
effects also extend to test units other than people. For example, consider the case in which the test units are department stores. Stores change over time in terms of physical layout, decor, traffic, and composition
Testing effects are caused by the process of experimentation. Typically, these are the effects on the experiment of taking a measure on the dependent variable before and after the presentation of the treatment. There are two kinds of testing effects: (I) main testing effect (Mn and (2) interactive testing effect (IT)
In the interactive testing effect (IT), a prior measurement affects the test unit’s response t-o the independent variable. Continuing with our advertising experiment, when people are ask-ed to indicate their attitudes toward a brand, they become aware of that brand: They are sensitized to that brand and become more likely to pay attention to the test commercial than people who were not included in the experiment. The measured effects are then not generalization to thf! population; therefore, the interactive testing effects influence the experiment’s external validity.