CAUSAL RESEARCH

Causal Research
• Causal research is a well structured design and falls under the
category of conclusive research and is conducted to identify the
cause-and-effect relationship between two or more business (or
decision) variables. Many business decisions are based on the causal
relationship between the variables of interest.
• The causal research is designed to address the why part of the
question
• The independent variables are manipulated in a controlled
environment to identify and develop the functional relationship
between the causal factors and its predicted impact on the
dependent variable.
A relative comparison of exploratory research, descriptive research,
and conclusive research
Characteristics of Different Types of Business Research
Experiments
• Experiment
• A carefully controlled study in which the researcher
manipulates a proposed cause and observes any
corresponding change in the proposed effect.
• Experimental variable
• Represents the proposed cause and is controlled by the
researcher by manipulating it.
• Manipulation
• The researcher alters the level of the variable in specific
increments.
• Test-market
• An experiment that is conducted within actual market
conditions.
 Case: Levi’s: Fading Jeans and Market Share
As of 2009, Levi’s (www.levi.com) is a leading global apparel company, with sales in more
than 110 countries. It has been a long –standing company with more than 150 years of
being in the clothing business. Although one may think this long history can only result in
good things, Levi’s heritage has been its worst enemy. John Anderson, the president and
chief executive officer for Levi Strauss & Co., had to work to revamp Levi’s antique image
and make the brand appealing to younger generations in efforts to boost its declining
sales. In the last five years, Anderson saw worldwide sales drop 40%, losing market share
to competitors like the Gap, and trendier ones such as Calvin Klein, Tommy Hilfiger, and
Diesel. Another problem for Anderson came from store brand jeans, such as JC Penny’s
Arizona brand jeans or the Gap’s in-house brand, which have changed their image and
launched an assault on big brand names like Levi’s. These store brand jeans, along with
other store label jeans, now target the teenage market with “cutting edge” advertising.
American trade publication Brand Strategy estimated that the brand has lost about 50% of
the younger consumer market share worldwide between 1999 and 2008.
To compete with these brands and maintain leadership, Levi’s, the market
leader, is considering introducing their own line of private –label jeans to
capture a larger portion of the teenage market. John Anderson wonders,
“How powerful is a brand like Levi’s compared to an in-house brand like Gap
or a store brand like JC Penny’s Arizona Jeans?”
a. If you were John Anderson, what type of research would you want to
conduct to help arrive at an answer?
b. Please explain how you would implement the type of research you have
recommended.
c. Discuss the role of the type of research you recommend in enabling John
Anderson to determine the power of a national brand like Levi’s compared
to
an in-house brand like Gap or a store brand like JCPenny’s Arizona jeans?
d. What should Levi’s do to compete with in-house and store brands of jeans?