Marketing Experiment Assignment - Christian van 't Hof
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Student: Christian van ’t Hof 11th of January 2016 Marketing Experiment Assignment 1 Introduction This report is about a marketing experiment for Viking Beds of Sweden. This Swedish boxspring brand has just been introduced on the Dutch market in the upper-middle and higher segment. The marketing will be a TV advertising campaign for their boxspring type ‘Royal Viking’. Since boxsprings are gaining more market share, these high quality beds are being the ‘real deal’. The experiment that is going to run will be a before-after design experiment. Since there hasn’t been any brand exposure yet, a basic experiment won’t be working because the city with the TV ads will always be selling more. Moreover, a full factorial experiment won’t be working either, because it’s about 1 product with the same pricing for both cities. In this case, the before-after design experiment will be working by showing two different ads. 2 Experiment Design The variables in this experiment will be independent as well as dependent. The dependable variable will be the amount of units sold and the independent variable will be the TV advertisements. This experiment will run in the cities Laren and Naarden in the Netherlands. These cities are both in the same geographical area, share almost the same amount of population and have both on average about €50,000 income per household 1 , which is almost the highest in the Netherlands. Both Laren and Naarden have above 10,000 inhabitants, which is enough for statistical significance. The entire cities will see that TV ads, so this makes this a valid experiment. The first round of TV ads will run from March till April and the second round of TV ads will run from May till June. In the first round, both cities will see TV Ad 1. In the second round Laren will see TV Ad 1 and Naarden will see TV Ad 2. The lift in sales will be calculated from the differences between the two periods. In terms of causality three rules will at least be applicable, the other one is in this case not applicable. The two applicable rules are the first, second and the third one: Change in the marketing mix produces change in sales, no sales increase when there’s no change in the marketing mix (Round 2, Laren) and the time sequence. In this high-end market, competitors will probably respond, so that will be the external factors. 1 Centraal Bureau voor Statistiek. (2015, December 8). StatLine - Centraal Bureau voor Statistiek. Retrieved
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Transcript of Marketing Experiment Assignment - Christian van 't Hof
Student:Christianvan’tHof 11thofJanuary2016
MarketingExperimentAssignment
1IntroductionThisreportisaboutamarketingexperimentforVikingBedsofSweden.ThisSwedishboxspringbrandhasjustbeenintroducedontheDutchmarketintheupper-middleandhighersegment.ThemarketingwillbeaTVadvertisingcampaignfortheirboxspringtype‘RoyalViking’.Sinceboxspringsaregainingmoremarketshare,thesehighqualitybedsarebeingthe‘realdeal’.Theexperimentthatisgoingtorunwillbeabefore-afterdesignexperiment.Sincetherehasn’tbeenanybrandexposureyet,abasicexperimentwon’tbeworkingbecausethecitywiththeTVadswillalwaysbesellingmore.Moreover,afullfactorialexperimentwon’tbeworkingeither,becauseit’sabout1productwiththesamepricingforbothcities.Inthiscase,thebefore-afterdesignexperimentwillbeworkingbyshowingtwodifferentads.
2ExperimentDesignThevariablesinthisexperimentwillbeindependentaswellasdependent.ThedependablevariablewillbetheamountofunitssoldandtheindependentvariablewillbetheTVadvertisements.ThisexperimentwillruninthecitiesLarenandNaardenintheNetherlands.Thesecitiesarebothinthesamegeographicalarea,sharealmostthesameamountofpopulationandhavebothonaverageabout€50,000incomeperhousehold1,whichisalmostthehighestintheNetherlands.BothLarenandNaardenhaveabove10,000inhabitants,whichisenoughforstatisticalsignificance.TheentirecitieswillseethatTVads,sothismakesthisavalidexperiment.ThefirstroundofTVadswillrunfromMarchtillAprilandthesecondroundofTVadswillrunfromMaytillJune.Inthefirstround,bothcitieswillseeTVAd1.InthesecondroundLarenwillseeTVAd1andNaardenwillseeTVAd2.Theliftinsaleswillbecalculatedfromthedifferencesbetweenthetwoperiods.Intermsofcausalitythreeruleswillatleastbeapplicable,theotheroneisinthiscasenotapplicable.Thetwoapplicablerulesarethefirst,secondandthethirdone:Changeinthemarketingmixproduceschangeinsales,nosalesincreasewhenthere’snochangeinthemarketingmix(Round2,Laren)andthetimesequence.Inthishigh-endmarket,competitorswillprobablyrespond,sothatwillbetheexternalfactors.
1 Centraal Bureau voor Statistiek. (2015, December 8). StatLine - Centraal Bureau voor Statistiek. Retrieved
Student:Christianvan’tHof 11thofJanuary2016
3AnticipatedIssues3.1-2IssuestobeconsideredInthisexperimenttherecouldbeissues.IntheNetherlandspeoplegetaroundMayandJune,theirholidayfeefromtheirjobs,thiscouldincreasetheirbudgetinthosemonths,whichcouldbeanexternalfactorthatcouldaffectthenetlift.AnotherissuecouldbeourcompetitorCarpeDiem.CarpeDiemisalsofromSwedenandhasalreadyenteredthemarket.Iftheylaunchanewcampaign,thanthiswoulddefinitelyaffectthenetliftaswell.
3.2-2ThingstheexperimentdemonstratesThisexperimentcouldpointoutadifferenceinoutcomeofbothTVAds.ItcouldindicatewhichTVAdwouldworkbetter.Ontheotherhand,aresultofthisexperimentcouldalsoindicatewhichcitywouldbebuyingmoreproductsfromourcompanycomparedtotheother.Iftheoutcomeofbothcitiesshowsverydifferentnumbers,themostinterestingcitycouldbeappointed.
4ExperimentAdaptionInthis2ndversionVikingisgoingtoshowtheirTVAdsontheInternet.Thiscampaignwillspaninthesamemonthsinthesecondyear.Inthiscase,afullfactorialexperimentwillassistinprovidingmorespecificmetrics,whichcanbecontrolledmoreprecise.Inthiscasethevideoadswillbeanindependentvariableaswellasgender.AccordingtometricsSweden,malestendtobuytheseboxspringsoverfemales.Thedependentvariablewillstillbetheamountofunitssold.Thismorespecificexperimentwillshowmorerelevantinformationonthegenderofourcustomers,whichwecanusetoimprovethetargetingofcustomersbymorespecifiedvideosthatwillbemorefocussedonthedifferencesingender.Theresultsfromthisexperimentwillbeeasiertomeasureandtoanalyse,whichsavesthecompanymoneyandgivesthecompanybetterresults.Ontheotherhand,justlikeTVads,itonlymeasuresthepeoplethatusetheInternetontheircomputerorwatchTV.
