Transcript Slide 1

Marketing Research
Lecture 6
Concept Of Causality
Scientific notion of causality is very different from the common
sense, every day notion
1. Common Sense: there is a single cause of an event. “X” is a
cause of “Y” & “X” is indeed the cause
Scientific: “X” would only be one of the number of determining
conditions.
2. Common Sense: for “X” to be a cause of “Y”, “X” must always
lead “Y”.
Scientific: “X” can be a cause of “Y” if the occurrence of “X”
makes the occurrence of “Y” more likely or more probable.
3. Common Sense: can prove that “X” is a cause of “Y”
Scientific: we can just infer but never prove a relationship.
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What Are Causal Relationships In
Marketing Decision Making?
Market
Analysis
What effect have recent price increases
had on product class sales
Marketing
Program
Development
Does the number of sales call per
month affect the size the order placed?
Performance
Evaluation
How has the new sales training program
affected sales performance?
Does advertising before khabarnama
increase awareness of product A?
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Problems of Experimentation
• Cost
• Time
• Control
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How Test Markets Help To Spot
Product Flaws?
1. A dog food changed color on the store
shelves
2. In cold weather, baby food separated into
a clear liquid & a sludge
3. In hot weather, cigarettes in a new
package dried out
4. A pet food gave the test animals diarrhea
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Conti..
5. When it was combined with price
reduction, a product change in a liquid
detergent was thought by consumers to
be dilution with water
6. Because of insufficient glue, over half of
the packages came apart during transit
7. Excessive settling in a box of tissues
caused the box to be one-third empty at
purchase
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Problems Of Experimentation
• According to a former director of corporate
marketing research for General Mills,
experimentation:
“..costs a mint, tells the competition what
you’re doing, takes forever, and is not
always accurate…. For the moment it’s
the only game in town”
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Advantages & Disadvantages of
Simulated Test Markets
1. Protect from competitors.
2. Faster & cheaper than full scale market
tests.
3. Good to spot weak products before
distribution on a national scale.
----------------------------------------------1.Do not know how well trade will accept the
product.
2.Do not know how competition will react.
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