Experimental Designs

Types of Experimental Designs

Completely Randomised Design (CRD) Randomised Block Design (RBD) Latin Square Design (LSD) Factorial Design (FD)

Common Example for all Designs

ITC is launching a scheme of introducing a scheme of giving 5%, 7.5%, and 10% discounts on its products throughout India. The discounts will be offered 18 stores. The sales volumes of each store will be measured to understand the impact of such sales on consumer buying habits.

Completely Randomised Design (CRD)

It is the most simplest design in which treatments are applied to the experimental units entirely by a chance process. Works on implicit assumption that test units are more or less of an equal size or responsiveness.

Rarely used in marketing research.

ANOVA is used for determining the difference in effect of each treatment.

CRD Example
Here, out of 18 stores of ITC, each discount scheme will be introduced on six different stores in a random manner assuming that there are no differences among stores. The measurement of sales volume will be done before and after the introduction of each respective scheme for each store & accordingly the change in sales volume will be noted.

CRD Example Data

Store No. 5% Discount 7.5% Discount 10% Discount

1 2 3 4 5

20 30 16 18 26

18 21 24 27 25

16 18 25 19 22

Randomised Block Design (RBD)

It is used where there is a single major extraneous variable. A blocking variable will be used to classify the test units. For example, it can be Customer Income Levels which can be used to classify the stores as High, Medium or Low Income Group category stores. The stores will be randomly assigned to each treatment after classifying them on basis of customer income groups. 2 Way ANOVA with custom option for model to be used with main effects.

RBD Example Data

Store Type 5% Discount 7.5% Discount 10% Discount

High

20

24

28

Medium

32

40

48

Low

35

41

52

SPSS Output
Source Store Discount Error Total Sum of Squares 611.556 281.556 27.111 df 2 2 4

Mean Square
305.778 140.778 6.778

F 45.115 20.770

Sig. .002 .008

Store High Medium Low

Mean 24.000 40.000 42.667

Discount Low Medium High

Mean 29.000 35.000 42.667

Interaction of Store & Discount Factors

Store High Discount Low Medium High Low Medium Medium High Low Mean 17.444 23.444 31.111 33.444 39.444 47.111 36.111

Low

Medium
High

42.111
49.778

Latin Squares Design (LSD)

LSD may be used when there are two extraneous factors. Major limitation is that the number of categories for each blocking variable must be equal. If one has 3 categories/types, other should also have 3 types. Thus, it can only be applied for square matrix problems. For example, for ITC, it might be store size along with customer income levels. Each factor will be divided into 3 levels. 2 Way ANOVA is to be used with Main Effects option for model.

LSD Example Data

Customer Income High Medium Low

Store Size
Large (5%) (7.5%) (10%)

Medium

(10%)

(5%)

(7.5%)

Small

(7.5%)

(10%)

(5%)

Factorial Design (FD)

In case if we have more than one variables to manipulate at a time. The number of treatment groups will depend upon the number of categories for each variable. For example, for ITC, the company may decide to give free coupon for future purchases at half of the stores along with discounts. The number of combinations of treatment groups will be 32=6. MANOVA is to be used.

FD Example Treatment Groups

Discount

5% Discount

7.5% Discount

10% Discount

Free Coupons

Yes

X1Y1

X1Y2

X1Y3

No

X2Y1

X2Y2

X2Y3