Sampling Fundamentals

Put simply, sampling involves identifying a group of individuals or households who can be reached by
mail, by telephone, or in person and who possess information relevant to solving the marketing
problem at hand. Why sample at all? The answer is simple and straightforward; sampling is practical
and economical. A target population is that set of people, products, firms, markets, and so forth,
that contains the information that is of interest to the researcher. A sample is a subset of target
population from which information is gathered to estimate something about the population. The
objective of sampling is to learn something about the population without taking a census. That is
based on information derived from the sample we will make an inference about the entire
population.

Sampling issues are primarily concerned with the membership of the population that should be
included in the sample (i.e., what size sample do we need) , the selection of the items from the
target population so that the sample is representative of the entire population, and the computation
of an estimate about the target population for some variable interest which is based on what is
observed in the sample.

Sampling design considerations

The first step requires the specification of data that must be collected for the research project.
Generally this will be determined by the background and objectives section of a marketing research
proposal. Once the researcher and/ or manager determines what information will be collected, the
next step is to define the target population. Here the researcher and/or manager must specify the
target population, determine the relevant sampling units, determine the incidence rates and select a
sampling frame. The third step of the sampling process involves data – collection issues, that is, what
method will be used to collect data. Data collection methods can affect other aspects of the
sampling design. For example, incidence rates may change if the data collection is implemented with
a mall intercept versus a telephone interview.

The next step is to determine the required sample size. This is usually one of the first questions
asked, “What size sample do we need?” As we will see there are many ways to determine the
required sample size for a project. Some of the methods are based on statistical theory, whereas
others are based on industry practices. The next step requires a selection of a sampling technique.
The sample may be either a probability sample or a nonprobability sample, and there are a variety of
specific sampling techniques for each of these major categories. The last step of the sampling
process relates to issues concerning nonreponse bias. That is, what are the potential sources of error
due to the fact that not all of the sample elements responded to the survey.

Target population and frame issues

A sample does not have to be representative of the general population, but it must be
representative of the population of interest. The population of interest is called the target
population. Precise definition of the target population is absolutely essential. If you define your
target population improperly, the research will likely be ineffectual for solving your problem. To be
precise, a population must be defined in terms of elements, units, and time. Once the population of
interest has been defined, it is commonly referred to as the target population. The elements that
make up that population are called sampling units.

Sampling frames

Selecting a sample means that one selects some number of elements from the target population.
The ability to select a sample of elements from a target population is based on the presumption that
we are able to identify (locate) the target population of interest. A sampling frame is simply a list or
set of directions (e.g., a geographic breakdown) that identifies the target population. A sampling
frame can be a list of names and telephone numbers, as in a telephone survey; an area map of
dwellings, as in an in-home personal survey; or a list of household addresses obtained from a local
utility company, as in a mail survey. The list (sampling frame) that is used defines what can be called
the operational or working population. If a sampling frame consists of all the sampling units in the
target population plus additional units, then it suffers from overregistration.

Sample size determination issues

An important issue in survey research is how large a sample to draw. Large samples are generally
more precise than small samples. In other words, if all else is the same, with large samples the
researcher is generally more confident that the results are representative of the target population.
However, large samples are also generally associated with higher costs. Marketing researchers use at
least five different methods of determining sample size. Sample size can be determined based on i)
blind guesses ii) statistical precision iii) Bayesian considerations iv) cost limitations and v) industry
standards.

Blind guesses

Blind guessing, clearly the most unsatisfactory method of determining sample size, uses informed
intuition as the basis of determining how many units to sample. This approach to determine sample
size is completely arbitrary and does not consider the likely precision of the survey results or the cost
of obtaining them.

Statistical Precision

Statistical precision relies on traditional statistical formulas for determining sample sizes. For
example, consider the formula shown in the Equation below, which is used to determine the sample
size for estimating the population mean.

n∗¿ ¿ ¿
¿
Note that the required sample size ( n ) depends on three criteria:

1. The desired confidence level ( Z 1−α /2 )

2. The desired precision (P)
3. The variability, as measured by the estimated standard deviation ( σ^ ) of the variable to be
estimated.
To see how these three criteria affect the required sample size, consider the case in which a brand
manager for a frozen foods corporation was interested in estimating the number of main dishes
prepared by microwave in a typical month for dual-income families. The research design calls for a
telephone interview, and the manager wants to know what sample size he or she should use. First
the manager must determine how confident he or she wants to be. That is, does the manager want
to be 90 percent confident in estimating the true population mean, 95 percent confident, etc. Once
this has been established, the ( Z 1−α /2 ) value is found by using a standard Z- table. Assume that the
manager determines that he or she wants to be 95 percent confident in estimating the true number
of main dishes prepared by the microwave in a typical month. In this case, from the Z-table, the
value of ( Z 1−α /2 ) is 1.96.

Second, the manager must determine how precise the estimate should be. Does he or she want to
be able to estimate the true number of main dishes prepared by microwave in a typical month
within a range of plus or minus trio meals, four meals, or more? Assume that the manager states the
estimate must be within plus or minus one meal hence P= 1.

Bayesian Considerations

Bayesian decision analysis can also be used to determine sample size. The Bayesian approach,
although not used much in practice, bases the decision regarding how large a sample to draw on
both the expected value of the information obtained by the sample and the cost of taking the
sample. This approach involves computing a difference known as expected net gain from sampling
for various sample sizes and choosing the sample size with the largest positive expected net gain.

Cost limitations

The cost limitations method, or “all-you- can-afford,” determines sample size on the basis of the
budget allocated to the project. This approach involves; subtracting from the available budget all
nonsampling-related costs for example, fixed cost of designing the survey, questionnaire
preparation, data analysis, and report generation. It also involves dividing this amount by the
estimated cost per sampling unit to arrive at the desired sample size. This approach is unsatisfactory
because it emphasizes cost to the exclusion of all other factors, especially precision.

Industry standards

Industry standards refer to those rules of thumb, developed from experience that have become
standard industry guidelines for determining how large a sample to draw. Conventional guidelines
on sample size vary with the type of marketing research study as well as with the number of cells
included in the study. The conventional approach to determining sample size is frequently used in
nonprobability designs, especially in quota samples. In quota samples for example the minimum
number of respondents per cell is usually no less than 50.

Sampling Technique Issues

There are two broad categories: probability samples and nonprobability samples.

Probability samples
All probability sampling procedures share two fundamental characteristics

1. Before the sampling takes place, it is always possible to specify every potential sample of a
given size (samples of size two, of size three, and so on) that could be drawn from the
population and the probability of selecting each sample.
2. Every sampling unit must have some nonzero chance of being selected.

Thus, in probability sampling designs, the population must e clearly defined, enabling the researcher
to tell which sampling units belong to the population of interest and which sampling units do not.
This means that a sampling frame (a list or other organized breakdown of the target group) must be
available. There is no requirement that every potential sample have the same probability of
selection, but the probability of selecting any particular sample of a given size can be specified.

The ability to determine this probability means that the precision of the estimated value of the
characteristics under study can be computed. In other words, confidence intervals into which the
true population value will fall with a given level of certainty can be computed. And in essence, this
allows the researcher to make inferences (projections) to the target population from which the
sample was drawn. The primary probability sampling methods are simple random sampling,
systematic sampling, stratified sampling and cluster sampling.

Simple Random Sampling (SRS)

Simple random sampling guarantees that every sample of a given size, as well as every individual in
the target population, has an equal chance of being selected. To draw a simple random sample
requires a list or other organised breakdown that specifically enumerates each individual,
household, or other element in the target population. The elements with numbers corresponding to
the random numbers are selected into the sample. Simple random samples have many desirable
features, for example they are easily understood and used, and they allow one to project sample
results to the target population. Nevertheless, simple random samples are rarely used in practise.

Systematic Sampling

With systematic sampling the target is generated by picking an arbitrary starting point (in a list) and
then picking every nth element in succession from a list. For example, if one wanted a target sample
of 60 from a target population of 3600 and assuming that the 21 st element (or any number between
1 and 60) was selected as the arbitrary starting point, then elements 81, 141, 201... 3561 would
make up the remaining 59 elements of the target sample. Systematic sampling is very easy to use.
Note also that although a list of all individual elements in the population is required, there is no need
to generate a set of random numbers, and therefore, the random numbers do not have to be
matched with individual elements as in SRS.

Stratified Sampling

Stratified sampling involves partitioning the entire population of elements into sub-populations and
then selecting elements separately from each sub population. Consequently, stratified sampling
necessarily involves two types of variables: a classification variable, which is used to place each
population element into a particular subpopulation, and a sampling variable, which represents the
characteristic of the population that we wish to estimate. Stratified sampling can be described by
four steps:

1. Based on some classification variable, the entire population of sample units is divided into
distinct subpopulations called strata.
2. Within each stratum a separate sample of elements is selected from all of the elements
composing that stratum, usually by SRS.
3. For each separate sample an estimate of characteristics of interest is calculated and properly
weighted; this is then added to obtain a combined estimate for the entire population.
4. The variances of the estimates also are computed separately for each stratum, and these are
properly weighted and added to form a combined estimate for the entire population.

Stratified sampling is more complex than SRS and, because at least one classification variable must
be observed for each sampling unit, potentially more costly. On the positive side, however, stratified
sampling can be much more efficient than SRS.

Cluster Sampling

Cluster sampling procedures can be described broadly by the following features:

1. Based on some classification variable or natural grouping, the entire population of sampling
units is divided into mutually exclusive and exhaustive subsets, called clusters.
2. Clusters are then selected based on a specified probability design such as SRS.
3. Elements are either probabilistically drawn from each selected cluster, or for each selected
cluster all of the elements are included in the sample.

The two primary advantages of cluster sampling are feasibility and economy. For these reasons,
cluster sampling is frequently used in practice, especially in surveys covering large geographical
areas. The practical feasibility of cluster sampling comes about because in many settings the only
sampling frame readily available for the target population is one that lists clusters. Lists of
geographical regions, blocks, telephone exchanges, and the like can usually be easily compiled, and
the researcher can thus avoid compiling a list of all individual elements for the target population, a
process almost never feasible in terms of time and resources for populations of any reasonable size.
Cluster sampling is generally the most cost effective means of sampling. Cost efficiencies come about
because of the relative ease with which sampling frames can be assembled and the reduced costs
associated with travelling.

Nonprobability Samples

All nonprobability sampling procedures share a common characteristic. There is no way of

determining exactly what the chance is of selecting any particular element into the sample.
Consequently, estimates are not statistically projectable to the entire population. We don’t mean
that nonprobability samples are necessarily inaccurate and always inferior to probability samples.
Rather, nonprobability samples can be good (representative) or bad (unrepresentative) depending
on the approach and controls used in selecting who is included in the sample. Certain nonprobability
designs produce what are called purposive samples because certain “important” segments of the
target population are intentionally overrepresented in the sample. Some of the major nonprobability
sampling approaches include convenience samples, judgemental samples, and quota samples.

Convenience Samples

If convenience sampling is used, there is very little or no control over who is included in the sample.
If respondent participation is voluntary or if the interviewer selects sampling units, then convenience
samples are produced.

Judgmental Samples

Judgmental sampling involves selecting certain respondents for participation in the study.
Respondents are selected because they are presumably representative of the population of interest
and/or meet the specific needs of the research study. Judgmental samples are frequently used in
commercial marketing research studies. A special kind of judgmental sampling is the snowball
design, frequently used when it is necessary to reach a small, specialized target population. Under a
snow ball design, after being interviewed, each respondent is asked to identify others who belong to
the target population.

Quota Samples

Quota sampling involves selecting specific numbers of respondents who possess certain
characteristics known or presumed to affect the subject of the research study. It is extremely
common in commercial marketing research studies to set quotas on interviews based on age, gender
or income.
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