Alcon Laboratories has just completed a series of product tests for a new over-t
ID: 3264917 • Letter: A
Question
Alcon Laboratories has just completed a series of product tests for a new over-the-counter eyedrop product. This product proved very effective in clearing up bloodshot eyes in clinical trials and has been perceived to be effective by consumers in market tests. At this point, the effectiveness of the product, both clinically and in terms of consumer perceptions, has been demonstrated. There is now a debate between two different factions on the product and marketing teams regarding pricing. One group feels strongly that the product should be priced only slightly, in the range of 5 percent, higher than the competition. Members of this group are of the opinion that demand for these types of nonprescription eye drop products is relatively elastic. Further, they think that their proven clinical and perceptual advantages are not enough to overcome a price differential of 10 percent, and possibly not enough to overcome a differential of even 5 percent. They think that higher differentials will lead consumers to choose a competitive product. The other group believes that the advantages of the new product and the associated claims that they can make based on the clinical trials will justify a price differential of 20 to 25 percent. Their thinking in this matter is partially supported by focus group results and some similar experiences with related products. These differences have been the subject of several meetings, some of them quite heated, with neither group willing to change its position. The issue has become highly dysfunctional and is starting to hurt the company in terms of delays in the introduction of what many see as an innovative new product. Senior managers who have to approve the launch and the pricing see some logic in the arguments advanced by each side and do not think that they have the information necessary to make an informed decision. They do not want to make the decision on an arbitrary basis or to be seen as favoring one group over the other for no apparent reason. They have decided that the best course is to conduct a market test and to make the final decision based on the results of that test. The company used an interrupted time series design for a similar problem involving a particular product feature. Describe a test that would utilize an interrupted time series design to address the pricing question. Would this type of test provide a definitive answer to their question? Why or why not? What other type of experimental design might the company utilize to answer the question it is trying to deal with? Describe how that design would work in this case. Would that approach be superior to the interrupted time series design? Why or why not? Regardless of the approach used, when comparing the effectiveness of the two prices, would you be more interested in total unit sales or total revenue when comparing results? Justify your response.Explanation / Answer
1. Among all the given tests that are available we can opt for interrupted time series design with comparison group
Quasi-experimental designs came about because of:
1) difficulty of applying the classical natural science method to the social sciences
2) overemphasis on theory testing and development
3) high cost of classic natural science methods
4) development of new statistical tools that allowed for statistical control
There are several types of quasi-experimental designs, including:
time series design
equivalent time series samples
equivalent samples materials design
non-equivalent control group
counterbalanced designs
separate sample pre-test/post-test
separate sample pre-test/post-test control group
multiple time series design
institutional cycle design
regression-discontinuity design
Comparison Group Pre-test/Post-test Design
In a quasi-experimental design, the research substitutes statistical "controls" for the absence of physical control of the experimental situation. The most common quasi-experimental design is the Comparison Group Pre-test/Post-test Design. This design is the same as the classic controlled experimental design except that the subjects cannot be randomly assigned to either the experimental or the control group, or the researcher cannot control which group will get the treatment. In other words, participants do not all have the same chance of being in the control or the experimental groups, or of receiving or not receiving the treatment.
Interrupted Time Series Design
This design uses several waves of observation before and after the introduction of the independent (treatment) variable X. It is diagrammed as follows:
O1 O2 O3 O4 X O5 O6 O7 O8
Interrupted Time Series Design with Comparison Group
The addition of a second time series for a comparison group helps to provide a check on some of the threats to validity of the Single Interrupted Time Series Design discussed above, especially history.
This design uses several waves of observation in both groups (treatment and comparison groups) before and after the introduction of the independent variable X in the treatment group. It is diagrammed as follows:
State A: O1 O2 O3 O4 X O5 O6 O7 O8
State B: O1 O2 O3 O4 - O5 O6 O7 O8
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