Marketing Strategy for Dixie Brewing Company.

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Marketing Strategy for Dixie Brewing Company

Market Analysts and Promotional Specialists, Incorporated (M.A.P.S) was hired by the Dixie Brewing Company to research their marketing methods after sales fell.  It was decided that shelf positioning was a major factor for influencing sales and therefore a marketing plan was constructed to test this.

Internal or External Validity?                

There are two specific kinds of validity that are relevant to experimentation, internal and external validity.  Internal validity refers to the extent to which the effect observed was a result of the experimental variable and no other factors (Churchill and Iacobucci, 2002).  External validity refers to whether the cause and effect relationships found in the experiment can be generalized (Malhotra, 1999).

The marketing research design made by M.A.P.S for Dixie Brewing Company can

be classified as a One-Group Pretest-Posttest Design. In this design, a pretreatment measure was taken where the original shelf positioning was observed.  The convenience store was exposed to the treatment where the alternative layout was introduced. A post treatment measure was taken.  The design may be symbolized as:        

                                O1        X        O2

The treatment effect can be shown by O2-O1 (Mc Daniel and Gates, 2002).

The experiment was conducted in an actual market environment, the selected convenience store. Although the price and number of bottles were the same throughout the treatment, some extraneous variables, which were threats to the internal validity to this design were not taken into account.  One of the main extraneous factors is history where outside variables affect the dependent variable during the course of the experiment (McDaniel and Gates, 2002).  This could include the action of other competitors, such as, promotions and increased advertising, and changing weather conditions, for instance, an increase in temperature could result in an increase in sales as people may drink more.  

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Another extraneous factor is maturation, which involves external changes unrelated to the experiment, which affects subjects’ response (McDaniel and Gates, 2002).  In this case financial situation of the customer at the time of experimentation could be a factor.  For example, if they have just received their salary they may have a more disposable income.

As a field experiment, and taking into consideration extraneous variables the experiment seems to have a higher degree of external validity.

Was the convenience store a good venue for the experiment?        

Having discussed external validity in the previous section this provides a basis to judge ...

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