This week with in the Marketing Research & Strategy class and the help of “the Market research toolbox” book, we have learned how to determine a sample size, something that we are going to apply to our final project. The book I just mentioned gives us an efficient way to be able to calculate the size of our sample. The process that we need to do in order to find a sample size is divided into 3 steps. The first step is to square the Z value (that we are going to find in the tables showing the area under the curve for normally distributed data) associated with the desired confidence interval. The second step is to multiply the previous number by the population variance. And the last step is to divide by the square of the desired precision.
In page 303 exercise 4, we are presented with 3 different problems that can be solved using these three steps in order to obtain the sample size. Problem d) is about a firm that wants to track satisfaction on a quarterly basis using a 10-point scale. They would like a precision of ±0.05 – that is to be able to interpret a change in average satisfaction from 8.90 to 8.95 as a true increase in customer satisfaction (95 percent confidence). So in order to find the sample size our first step is to use the confidence interval of 95% to find the Z. We know that a confidence interval of 95 has a Z value of 2. Once we have figured out the Z value, we need to square it, which is going to be equal to 4. Our second step is to multiply 4 by the population variance. The population variance is the only number that is not given to us, so in order to find it we need to check the table 13.1 in page 298 (estimated variance for rating scales). We can see that the variance is going to be 3 because we are dealing with a normal distribution. And our last step should be to divide the result of the previous multiplication by the square of the desired precision, which in this case is (0.05)2 = 0.0025.
This is the way it should be:
22 x 3 / 0.0025 = 48000 customers
Even though this precision works for this specific problem, I think it would have been better to go with a higher number so it doesn’t limit study. In the book Edwar McQaurrie suggests that going lower than 5 percentage point is not a smart move. “a desire for high precision combined with use of high variance scale (10 points rather than 4 points) is going to drive sample size and costs considerably higher”. That being said, there is no reason to conduct a market research for such a narrow precision when you can provably conduct something closer to it with a lower cost. More precision doesn’t mean that you are going to get rid of all the uncertainty, it is always going to be there.
Since we started the Marketing and Strategy class in January, we have learned a lot of different way to get information from our clients. In chapter nine we studied a different way to gather information from our customers, through evaluative surveys. The evaluative surveys are considered to be more efficient and precise than a regular survey because it describes a customer’s stance toward the brand, or positive and negative experiences with product ownership. While on the other hand a regular survey focuses more on simply describing customer’s characteristics and behaviors.
When companies or someone who is doing a research creates a survey, it is usually with the objective of gathering the biggest amount of information possible. It is a simple and complex enough system to get information that can be important for your company. This means that if I am taking a survey for a big company, I might be the person 40 out of 30,000 surveys they gathered. That is one of the reasons why I have never been a fan of taking surveys, because I don’t’ see how my survey is going to influence on anything.
From my point of view, I usually give more importance to a survey if I know that it is a smaller one, or not open to everyone. For instance, every semester we are asked to do a course evaluation that is basically about the class and how the we think the professor has taught it. I usually take it serious because most of the professors personally ask us to do it and they use it as a guide for improvement. A personal favor is another reason why I answer surveys, like a for friend doing a survey for a project. And finally, one of the biggest reasons why I would answer a survey is if there is an incentive. For example, there are a lot of companies like fast food chains that ask you to answer a survey and in exchange they take a % off of your next purchase or maybe they give you something for free.
From the point of view of the marketer conducting the research on what you are trying to obtain after the survey. If your goal is to market a product, use the customer behavior and characteristics to influence them on buying your product the best option would be to go for the second survey. But if your objective as a marketer is to get to know the opinion of your customers about your product and how you can make it more appealing to theme, than you should have to go with the evaluative surveys.
Overall surveys are very useful to gather a lot of information about ideas that you would like to clarify about your product or service. But that is only going to give you an overall idea about the situation, something that you can later on use as a guide for a deeper study of your product image in the market.