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Complete Study Guide for Chapters 7 and 8

(Chapters 5, 6, and 7 for 6th Edition users

Chapter 7 Primary Data Collection: Observation


I. Nature of Observation Research a. Conditions for Using Observation i. The needed info must be either observable or inferable from behavior that is observable. ii. The behavior of interest must be repetitive, frequent, or in some manner predictable. iii. The behavior of interest must be of relatively short duration. Approaches to Observation Research a. Natural vs. Contrived Situations b. Natural Observer plays no role in the behavior of interest c. Contrived simulated experiment used to carefully observe behavior. i. Recruits must be given notice that they are participating in a study ii. Frito Lay and P&G use online simulated environments. d. Open vs. Disguised Observation i. Open people know they are being observed ii. Closed people do NOT know they are being watched 1. One way mirror e. Human vs. Machine Observers i. Machine data more accurate and timely f. Direct vs. Indirect Observation i. Direct observing present behavior ii. Indirect observing past behavior g. Garbologists analyzes product household consumption patterns by sorting through trash Advantages of Observation Research a. Firsthand info is not subject to many of the biasing factors associated with the survey approach. b. Some forms of data are gathered more quickly and accurately by observation. Disadvantages of Observation Research a. Observer does not learn about motives, attitudes, intentions, or feelings b. Private behavior is beyond the scope of observation research c. Present observed behavior may not be projectable in the future. d. Can be time-consuming and costly if the observed behaviors occur infrequently. Human Observation a. Ethnographic Research i. The study of human behavior in its natural context ii. Observation of behavior and physical settings iii. Participant observers b. Advantages of Ethnographic Research i. observers can record: ii. What is happening, including what objects are being created or manipulated iii. Where it is happening iv. The flow of what is happening v. The order of what is happening vi. The time spent on what is happening vii. Who is doing what viii. What is being communicated verbally and nonverbally ix. The reactions of the various participants

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c. Principle activity is observing behavior, active interviews or discussion with the respondents is a key component. VI. Conducting Ethnographic Research a. Informant i. Participant who can introduce the researcher(s) to a particular group of people and explain the meaning behind the rituals, language, and general goings on. b. Data Recorded in Field Notes i. Researcher's own experiences c. Analyze and Interpret Data for Themes and Patterns i. Triangulation check for accuracy ii. Findings must be presented in a fashion to enable companies to create innovative and successful solutions. Mystery Shoppers a. Level 1 Mystery telephone call b. Level 2 Quick purchase, little or no customer-employee interaction is required c. Level 3 Does not involve purchase. MS visits establishment using script or scenario to initiate conversation with a service and/or sales rep. d. Level 4 Visit that requires excellent communication skills and knowledge of the product i. Measures employee training and organization compliance with standards and specs One-Way Mirror Observation a. Allows clients to observe group discussion as it unfolds b. In recent years, the trend has been to inform participants of the one-way mirror and explain who is in the other room watching and why. Audits a. b. c. d.

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Examination and verification of sales of a product Retail Audit measures sales to final consumers Wholesale Audit determine the amount of product movement from warehouse to retailers Being replaced by scanner-based data

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Machine Observation a. Traffic Counters i. Measure vehicular flow over a particular stretch of roadway ii. Retailers use info to ascertain where to locate a particular type of store Physiological Measurement Devices a. Electroencephalograph (EEG) measures electric pulses on the scalp and generates a record of electrical activity in the brain. i. Most versatile and sensitive procedure for detecting arousal ii. Expensive equipment iii. Disadvantage the ability to accurately translate b. Galvanic Skin Response (GSR) change in the electric resistance of the skin associated with activation responses. i. Small electric current of constant intensity is sent into skin through electrodes attached to the palmar side of the fingers. ii. Changes in voltage observed by the electrodes indicate the level of stimulation iii. Most popular way to assess emotional reaction to a stimulus c. Eye Tracking d. Facial Action Coding Service (FACS) e. Firms use to get the truth from facial expressions Opinion and Behavior Measurement Devices a. GPS Measurement

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i. Firms use to determine actual exposure to outdoor displays by gathering travel info of routes taken by observed individuals. b. People Reader i. Respondents sit in front of monitor that records the activity of their eyes as they read articles and observes their attention to ads. c. Scanner-Based Research i. UPC codes ii. BehaviorScan panel members shop with ID card. 1. Tracks household purchases, item by item, over time iii. InfoScan provides info essential to developing, implementing, and evaluating marketing programs. d. The Portable People Meter and Project Apollo i. Wearable device that records exposures to television, radio, web, and any other media. ii. Project Apollo a day in the life of thousands of consumers. iii. Uses PPMs iv. Objective: accomplish marketings holy grail, how did the marketing mix influence the purchase of specific goods and services XIII. Observation Research on the Internet a. Clicksteam data cookies, tracking software, proxy servers b. Unique to every site Predictive Customer Intelligence a. Modeling surfing patterns along with demographic and psychographic data to predict consumer behavior. b. Requirements: website design must be matched up with the buying process, website must model clickstream data to increase understanding of the online customer base, website must develop predictive models. c. DoubleClick largest company tracking clickstreams on the internet Observation Research and Virtual Shopping a. Computer-simulated environments offer a number advantages over older research methods b. Virtual store duplicates the distracting clutter of an actual marketing medium c. Researchers can set up and alter the tests quickly d. Production costs are low e. Simulation has a high degree of flexibility

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Primary Data Collection: Experimentation and Test Markets


I. Experimentation And Test Markets a. What is an experiment? i. Research approach in which one variable is manipulated and the effect on another variable is observed. Demonstrating Causation Research a. Research designed to determine whether a change in one variable likely caused an observed change in another. (that A likely caused B) b. Must be able to show 3 things i. Concomitant Variations: statistical relationship between two variables. (correlation) ii. Appropriate Time Order of Occurrence: change in an independent variable occurred before an observed change in the dependent variable. iii. Elimination of Other Possible Causal Factors: Hard to prove that something else did not cause change in B. Experimental Setting: experiments can be conducted in a laboratory or a field. a. Laboratory experiments: experiments conducted in a controlled setting. (internal validity)

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b. Field experiments: test conducted outside the lab in an actual environment, such as a market place. (external validity) Experimental Validity a. Validity: the degree to which an experiment actually measures what the researcher was trying to measure. i. Internal Validity: extent to which competing explanations for the experimental results observed can be ruled out. ii. External Validity: extent to which causal relationships measured in an experiment can be generalized to outside persons, settings, and times. Extraneous Variables: a. Factors or Variables that pose a threat i. History: intervention, between the beginning and end of an experiment, of outside variable or events that might change the dependent variable. ii. Maturation: Changes in subjects occurring during the experiment that are note related to the experiment but which may affect subjects response to the treatment factor. iii. Instrument Variation: changes in measurement instruments (e.g., interviewers or observers) that might affect measurements. iv. Selection Bias: systematic differences between the test group and the control group due to a biased selection process. v. Mortality: loss of test units or subjects during the course of an experiment, which may result in a non-representativeness. b. Controlling Extraneous Variables: causal factors that threaten validity must be controlled in some manner to establish a clear picture of the effects of the manipulated variable on the dependent variable. i. Randomization: random assignment of subjects to treatment conditions to ensure equal representation of subjects characteristics. ii. Physical Control: holding constant the value or level of extraneous variables throughout the course of an experiment. iii. Design Control: use of the experimental design to control extraneous causal factors. iv. Statistical Control: adjusting for the effects of confounded variables by statistically adjusting the value of the dependent variable for each treatment condition. Experimental Design, Treatment, and Effects a. Experimental Design: test in which the researcher has control over and manipulates one or more independent variables. i. Four Factors 1. Treatment: variable that is manipulated 2. Subjects: who participates in the experiment 3. Dependent: Variable that is measured 4. Plan or Procedure: dealing with extraneous causal factors. b. Treatment Variable: independent variable that is manipulated in an experiment. c. Experimental Effect: effect of the treatment variable on the dependent variable. Limitations of Experimental Research a. High cost of experiments: (money and time) b. Security Issues: (exposing a marketing plan or some key element of a marketing plan in actual marketplace; the element of surprise is lost/stolen by competitors.) c. Implementation Problems: (difficulty gaining cooperation within the organization, contamination problems, differences between test markets and the total population.) d. Contaminations: inclusion in a test of a group who are not normally there. (Buyers from outside the test market.) Selected Experimental Design

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a. Pre experimental designs generally are difficult to interpret because such designs offer little or no control over the influence of extraneous factors. b. One shot case study design involves exposing test units to the treatment variable for some period of time and then taking measurement of the dependent variable c. One group pretest- posttest design is the design employed most frequently for testing changes in established products or marketing strategies. True experimental designs the experimenter randomly assigns treatments to randomly selected test units a. Before and After with control group design- test units in this design are randomly assigned to the experimental and control groups, the two groups can be considered equivalent b. After-only with control group design Same as the before and after design except there is no premeasurement of the dependent variable. Quasi experiments- researcher lacks complete control over the scheduling of treatments or must assign respondents to treatments in nonrandom fashion a. Interrupted Time-series designs- involves repeated measurements of an effect both before and after a treatment is introduced that interrupts previous data patterns. b. Multiple time series Designs. - If a control group can be added to an interrupted time-series design, then researchers can be more certain their interpretation of the treatment effect. Test Markets a. Used rather loosely to refer to any research that involves testing a new product or change in an existing marketing strategy in a single market, group of markets, or region of the country through the use of experimental or quasi-experimental designs Types of test markets a. Traditional or standard test marker- testing the product and other elements of the marketing mix through a firms regular channels of distribution b. Scanner or electronic test markets have panels of consumers who carry scannable cards for use in buying particular products. c. Controlled Test Markets- are managed by research suppliers who ensure that the product is distributed through the agreed upon types and numbers of distributors. d. STMs (simulated test markets)- simulations of the test markets noted above Costs of Test Marketing a. Test markets are expensive, and, as a result, they should be used only as the last step in a research process that has shown the new product has potential b. Decision to conduct test marketing due to the important benefits that come from conducting a test. c. Steps in a test market study i. Define objective ii. Select a basic approach iii. Develop detailed test procedures iv. Select test markets v. Execute the plan vi. Analyze the test results

Research Design: Meaning, Purpose and Principles What exactly is Research Design? -It is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions and to control variance. 1. The plan is the overall scheme or program of the research including an outline of steps taken from the hypothesis to the final analysis of data. 2. The structure is more specific. It is the outline, the scheme, the paradigm or model of the operation of the variables. 3. The strategy is also more specific than the plan. It includes the methods to be used to gather and analyze the data and how problems will be approached. Purposes of Research Design: 1. To help the investigator obtain answers to research questions. 2. To help the investigator control the experimental, extraneous, and error variances. 3. To enable to researcher to answer research questions as validly, objectively, accurately and economically as possible. 4. To suggest what observations to make, how to make them, and how to analyze the quantitative representations of the observations. An Example: 1. Research Question: Do colleges and universities discriminate against women in hiring and in admissions? 2. Remember Statistics class? a. Colleges are randomly chosen to be sent an application for either a male or female. b. Male: A1, Female: A2. c. Difference in means, MA1 and MA2 will be tested for statistical significance. d. H0: MA1= MA2 e. HA: MA1 > MA2 Look familiar? A Stronger Design: -Refined idea to test: If a college bases its selections of incoming students strictly on ability, there is no discrimination based on sex. 1. If another independent variable, ability (B), is applied to the design, the results would be considerably stronger evidence. 2. Colleges will be randomly chosen to receive an application for either a male or female that will also be attributed as being high, medium, or low ability. 3. Once data is gathered, several statistical tests are now possible instead of just one. a. Between A1 and A2 b. Among B1, B2, and B3 c. The interaction of A and B 4. Examples of alternate hypotheses: a. HA: A2 > A1|B1

b. HA: A1 A2|B2 c. HA: A1 > A2|B3 Research Design as Variance Control -The main technical function of research design is to control variance. 1. Maximize the variance of the variable or variables of the substantive research hypothesis 2. Control the variance of extraneous or unwanted variables that may have an effect on the experimental outcomes 3. Minimize error or random variance: a. Sounds like Quantitative Business Tools II doesnt it? Maximization of Experimental Variance -This can be done by making each variable as unlike as possible. Once this is done, a variables variance can be separated from the total variance. -In other words, analyze the effect a change in a particular variable has on the dependent variable. (In Quant Tools II, this is called a Thing II analysis.) Control of Extraneous Variables -Three ways to control these. 1. Eliminate the variable as a variable by giving it a range. (or percentage) a. For example, if we are worried that IQ is a possible contributing factor in our achievement study, we can include only IQs within a range of 90-110. 2. Randomization also controls for extraneous variance. a. Randomization. b. Randomization. c. Randomization. 3. Control the extraneous variable by building into the design as an independent variable. a. Can be treated like an attribute and split into several parts like the ability attribute mentioned earlier. Called matching. b. For example, IQ can be split into high and low variables then randomized. c. The control of variance is identified and built into the design. Minimization of Error Variance -Supposedly, random errors tend to balance each other so that their mean is zero. -Systematic variance is predictable. Error variance, on the other hand, is unpredictable. -Minimizing error variance has two principle aspects: 1. The reduction of errors of measurement through controlled conditions 2. An increase in the reliability of measures -The more uncontrolled the conditions of an experiment, the more the many determinants of error variance can operate.

-The Standard Error of the Statistic should be an accurate measure of random error. - To increase the reliability of measures is to reduce the error variance... reliability can be taken to be the accuracy of a set of scores. 1. Remember what a Confidence Interval looks like? One that is more narrow is more precise. Which is generally better.

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