This chapter examines a variety of observational methods including those using mechanical means and scanning. It then looks at experimentation as a research method. Different types of experimental design are examined, together with a variety of approaches to test marketing.

One drawback of the survey method is that much of the information obtained is based on interviewees' statements describing what they have done or expect to do in the future. With respect to past actions, the interviewees can make mistakes in trying to recall what has happened, particularly when some time has elapsed since the event. The same kind of problem also applies to their intended actions, since these may also differ markedly from what actually happens. This is a common occurrence when people are asked about their purchase intentions for such items as cars, homes or major appliances. Many intended purchases never actually take place for a variety of reasons. The observation method does not suffer from these shortcomings since it records events as they actually happen.

Observation involves the personal or mechanical monitoring of selected activities. It records actions as they occur and thus there is no lack of accuracy caused by a respondent's faulty recollection of their past actions or inadequate estimate of future ones.

The scene is a US convenience store: 'cappuccino devotees' stride confidently towards the coffee dispenser, while 'clandestine consumers' consider a range of snacks after choosing their main purchase and 'explicit treaters' wander in search of something to satisfy a vague desire before selecting the familiar comfort of a chocolate bar.

Clearly, researchers wanting to understand more about consumer habits would learn little about these shoppers merely by analysing how often people visited the store. But by using a technique called observational research - watching how different types of people use goods and services - a fuller picture can be obtained.

By watching what happened in the convenience store, E-Lab, a Chicago-based research consultancy, was able to advise PepsiCo, the international food and soft drinks group, on where and how to position its products in order to get higher sales.

Observing how people behave in different surroundings or how they handle pieces of equipment is valuable in helping a company meet a specified aim, such as entering a new market, and in developing products to meet future needs that consumers have not yet recognised.

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