Q&A - What is the role of sampling in market research?

Market research involves the collection of data to obtain insight and knowledge into the needs and wants of customers and the structure and dynamics of a market. In nearly all cases, it would be very costly and time-consuming to collect data from the entire population of a market. Accordingly, in market research, extensive use is made of sampling from which, through careful design and analysis, marketers can draw information about the market.

Designing the sample

Sample design covers the method of selection, the sample structure and plans for analysing and interpreting the results. Sample designs can vary from simple to complex and depend on the type of information required and the way the sample is selected.

Sample design affects the size of the sample and the way in which analysis is carried out. In simple terms the more precision the market researcher requires, the more complex will be the design and the larger the sample size.

The sample design may make use of the characteristics of the overall market population, but it does not have to be proportionally representative. It may be necessary to draw a larger sample than would be expected from some parts of the population; for example, to select more from a minority grouping to ensure that sufficient data is obtained for analysis on such groups.

Many sample designs are built around the concept of random selection. This permits justifiable inference from the sample to the population, at quantified levels of precision. Random selection also helps guard against sample bias in a way that selecting by judgement or convenience cannot.

Defining the Population

The first step in good sample design is to ensure that the specification of the target population is as clear and complete as possible to ensure that all elements within the population are represented. The target population is sampled using a sampling frame. Often the units in the population can be identified by existing information; for example, payrolls, company lists, government registers etc. A sampling frame could also be geographical; for example postcodes have become a well-used means of selecting a sample.

What size should the sample be?

For any sample design deciding upon the appropriate sample size will depend on several key factors

(1) No estimate taken from a sample is expected to be exact: Any assumptions about the overall population based on the results of a sample will have an attached margin of error.

(2) To lower the margin of error usually requires a larger sample size. The amount of variability in the population (i.e. the range of values or opinions) will also affect accuracy and therefore the size of sample.

(3) The confidence level is the likelihood that the results obtained from the sample lie within a required precision. The higher the confidence level, that is the more certain you wish to be that the results are not atypical. Statisticians often use a 95 per cent confidence level to provide strong conclusions.

(4) Population size does not normally affect sample size. In fact the larger the population size the lower the proportion of that population that needs to be sampled to be representative. It is only when the proposed sample size is more than 5 per cent of the population that the population size becomes part of the formulae to calculate the sample size.