MARK977 Research For Marketing Decisions Autumn Semester, 2017 Week 8

MARK977 Research for Marketing Decisions
Autumn Semester, 2017

Week 8
AGENDA:
• Recap from Week 7
• Sampling Design and Procedure
• Introduction to SPSS
Quick Update
 Marketing Research Report (Group Assignment)
 As a group, critically analyse and develop a marketing research
report for a practical marketing problem based on the assigned
case. See (on Moodle) the following attached materials you will
need in order to accomplish this task:
1. JP Morgan Chase Case Study

2. SPSS data set
3. Assignment Instructions and Marking Guide
4. Detailed Hints on Report Structure
RECAP: Primary Scales of Measurement
Primary Scales
Nominal Ordinal Interval Ratio
Lowest level of Highest level of

measurement measurement
Copyright © (Malhotra) 2015 Pearson Education, Inc.

Classification of Scaling Techniques
Scaling
Techniques
Comparative Noncomparative
Scales Scales
Continuous Itemized
Paired Constant Rating Scales Rating Scales
Comparison Sum
Rank
Order
Likert
Stapel
Semantic
Differential
Steps in Questionnaire Design (1- 9)
1. Specify what
information will be 6. Determine
sought questions sequence
2. Determine the type of

questionnaire and
survey research method 7. Determine physical
characteristics of the
questionnaire
3. Determine the
content of individual
questions
8. Re-examine and
4. Determine the form revise steps 1-7 if
of response to each necessary
question
5. Determine the 9. Pre-test the

wording of each questionnaire
question

Sampling Design
Learning Objectives (Chapter 8)
After reading this chapter, the student should be able to:
 Differentiate a sample from a census and identify the conditions which favor the use of
a sample versus a census.
 Discuss the sampling design process: definition of the target population, determination
of the sampling frame, selection of sampling technique(s), determination of sample
size, and execution of the sampling process.
 Classify, describe and compare sampling techniques such as nonprobability and
probability sampling techniques.
 Understand the sampling design process and the use of sampling techniques in
international marketing research.
 Describe how the representativeness of social media samples can be improved.
 Identify the ethical issues related to the sampling design process and the use of
appropriate sampling techniques.
Copyright © 2015 Pearson Education, Inc.

Relationship of this Chapter to the Marketing Research
Process
Step 1: Defining the Problem
Step 2: Developing an Approach to the Problem
Step 3: Formulating a Research Design

Secondary & Syndicated Survey & Observation Questionnaire & Form Sampling Process & Preliminary Plan of Data
Qualitative Research Experimental Research Measurement & Scaling
Data Analysis Research Design Sample Size Analysis
Step 4: Doing Field Work/ Collecting Data
Step 5: Preparing & Analyzing Data
Step 6: Preparing & Presenting the Report

Basic Definitions
 Population. A population is the aggregate of all the elements that
share some common set of characteristics, and that comprise the
universe for the purpose of the marketing research problem.
 Census. A census involves a complete enumeration of the elements of
a population.
 Sample. A sample, on the other hand, is a subgroup of the
population selected for participation in the study.
 Parameter. A parameter is a summary description of a fixed
characteristic or measure of the target population.
A parameter denotes the true value which would be obtained if a
census rather than a sample was undertaken.
 33% of 120 workers at a particular bike factory were paid less than
$20,000 per year. You have the payroll data for all of the workers.
 Statistic. A statistic is a summary description of a characteristic or
measure of the sample. The sample statistic is used as an estimate of
the population parameter.
 60% of US residents agree with the latest health care proposal. It’s not
possible to actually ask hundreds of millions of people whether they agree.

Sampling Issues
 Objective: Obtaining information about the characteristics of a
population, either using a sample or census.
 Sampling is one of the elements of research design involving several

basic questions
- Should a sample be taken?
- If so, what process should be followed?
- What kind of sample should be taken?
- How large should it be?
- What can be done to control and adjust for non-response errors?
A representative sample, though not the entire population, contains the same
characteristics as the population, thus generalisability is high and population
parameters can be inferred from the information from the sample.

A Sample or a Census?
 Population – set of all objects that
posses some common set of
Population characteristics with respect to a
(Census) marketing research problem.
 Objects could be customers, firms,
cars, houses, etc…
 A census obtains information from
every member in the population
A sample is a subgroup
of the population selected
Sample
for participation in the
study.

Why Sample? How Sampling Works
 Business situations are short on
time and money
 More efficient to interview 200
rather than 10,000
 Cheaper to interview 200
rather than 10,000
 Good sampling enables good
results
Picture sourced from: Zikmund et al., 2014,

Marketing Research, 3rd Ed. Cengage
Sample vs. Census
CONDITIONS FAVORING THE USE OF
Sample Census
1. Budget Small Large
2. Time available Short Long
3. Population size Large Small
4. Variance in the characteristic Small Large
5. Cost of sampling error Low High
6. Cost of nonsampling errors High Low
7. Nature of measurement Destructive Nondestructive
8. Attention to individual cases Yes No

Sampling Design Process
Define the Target Population
Determine the Sampling Frame
Select a Sampling Technique
Determine the Sample Size
Execute the Sampling Process

Defining the Target Population
 The target population – collection of elements or objects that
possesses the information sought by the researcher. Should be defined
in terms of elements, sampling units, extent, and time.
− An element is the object about which or from which the
information is desired, e.g., the respondent.
− A sampling unit is an element, or a unit containing the element,
that is available for selection at some stage of the sampling
process.
− Extent refers to the geographical boundaries.
− Time is the time period under consideration.
Defining the target population involves translating the marketing

research problem into a precise statement of who should or should not
be included in the sample.

Example: Revlon sampling girls over 18 years old
Time Frame: Extent:
Upcoming Domestic
Summer Dubai
Sampling Unit: Element:

Households with 18 year old
18 year old females
females
Define the target population for the research objective:

Investigate consumer response to a new brand of Nivea men’s aftershave.
Determine the Sampling Frame
 A sampling frame is a representation of the elements of the target
population.
 It is a list or set of directions for identifying the target population

- Telephone book [white or yellow pages]
- An association directory [AMSRS list of research organisations or
members]
- Mailing list [purchased from a commercial business, membership list e.g., ]
- City directory or map
- Emirates Medical Association
- UAE Business Directory
- Students list
Note: Complete sampling frames are difficult to obtain? Why?

Sampling Frame Error
• When a sample is drawn from an inaccurate or incomplete
sample frame, you get sampling frame error
• The result? “over-registration” or “under-registration” of
population elements
Selecting Sampling Techniques
Sampling
Techniques
Nonprobability Probability
Sampling Sampling
Techniques Techniques
Probability is unknown, All population members have a
based on convenience/ known probability of being
judgement – sample may selected in the sample –
not be representative representative sample

Nonprobability Sampling Techniques
Convenience Judgmental Quota Snowball

Sampling Sampling Sampling Sampling

Convenience Sampling
Attempts to obtain a sample of ✔ Large sample obtained at low-
convenient elements. Often, cost & within short timeframe
respondents are selected because ✔ Appropriate for research in
they happen to be in the right place early stages
at the right time. ✔ Assumes that the sample is
similar to the target population
• use of students and members of even though there is no way to
social organizations measure sampling error
• mall intercept interviews without ✖ Greater risk of non-response
qualifying the respondents error due to self-selection &
volunteering involved in
• department stores using charge obtaining sample
account lists
✖ You cannot generalize the results
• “people on the street” interviews outside of the sample

Example: Convenience Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Group D happens to assemble at a convenient time and place. So all

the elements in this group are selected. The resulting sample consists of
elements 16, 17, 18, 19, 20.
NOTE: no elements are selected from group A, B, C, and E.

Judgement sampling
 Involves selecting a sample based on the researcher’s judgement
that the sample units will meet the research requirement
✔ Can produce a much better sample than convenience sampling but
this hinges on the quality of the market researcher’s judgement
BUT…
✖ Being a non-probability sampling method, there is no way to
measure sampling error
Examples:
• test markets
• expert witnesses used in court
• department stores selected to test new merchandise

Example: Judgmental Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
The researcher considers groups B, C, and E to be typical and convenient.

Within each of these groups one or two elements are selected based on
typicality and convenience. The resulting sample consists of elements 8,
10, 13, 22, and 24.
NOTE: no elements are selected from groups A and D.

Snowball Sampling
In snowball sampling, an initial ✔ Useful when the target population
group of respondents is selected, is very small, unique, & hard-to-
usually at random. reach – “inside knowledge” is
more accessible and accurate
• After being interviewed, than complete lists.
these respondents are asked ✔ It is also cost-effective and easy
to identify others who belong to implement BUT…
to the target population of
✖ There may be significant
interest.
differences between those who
• Subsequent respondents are are “known” and “unknown”
selected based on the amongst insiders – the “known”
referrals. are likely to be quite
homogeneous
✖ There is no way to measure
sampling error
Example: Snowball Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Elements 2 and 9 are selected randomly from groups A and B.

Element 2 refers elements 12 and 13. Element 9 refers element 18. The
resulting sample consists of elements 2, 9, 12, 13, 18.
NOTE: there is no element from group E.

Quota Sampling
May be viewed as two-stage restricted judgmental sampling.
• The first stage consists of developing control categories, or quotas,
of population elements.
• In the second stage, sample elements are selected based on
convenience or judgment.
1. Divide population into strata (gender) & calculate proportion of

population in each stratum (60% female: 40% male)
2. Allocate total sample amongst the strata in direct proportion to

their actual size in population (n=100  60 females: 40 males) –
these proportions serve as quota requirements.
3. You are free to include anyone who meets the quota requirements
in your sample.

Example: Quota Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
A quota of one element from each group, A to E, is imposed. Within each group,
one element is selected based on judgment or convenience. The resulting sample
consists of elements 3, 6, 13, 20, 22.
NOTE: one element is selected from each column or group

Probability Sampling Techniques
Simple Random Systematic Stratified Cluster

Sampling Sampling Sampling Sampling

Simple Random Sampling
• Each unit has a known, equal,
non-zero chance of being
selected
• Probability of selection = size of
sample/size of selection
• Everyday example: drawing
names out a hat
• Market research example:
computer-based random number
generator
SRS tends to be used for small populations or those where

computer-derived lists are available

Example: Simple Random Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Select five random numbers from 1 to 25. The resulting sample consists of
population elements 3, 7, 9, 16, 24.
NOTE: there is no element from Group C.

Systematic Random Sampling
• Researcher selects a starting point (usually
by simple random sampling)
• Then a constant skip interval (kth) is used to
select every other member
• The skip interval used must cover the entire
pop regardless of starting point
- Skip interval = target population
size/sample size
- E.g., 50/5 – select every 10th unit from
your randomly selected starting point
• Is more efficient than simple random

sampling
Tends to be used when companies already maintain customer lists,

membership directories, etc.
Example: Systematic Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Select a random number between 1 to 5, say 2.

The resulting sample consists of population 2, (2+5=) 7, (2+5x2=) 12,
(2+5x3=) 17, and (2+5x4=) 22.
NOTE: all the elements are selected from a single row.

Tennis's Systematic Sampling Returns a
Smash
Tennis magazine conducted a mail survey of its subscribers to gain a
better understanding of its market. Systematic sampling was employed
to select a sample of 1,472 subscribers from the publication's domestic
circulation list. If we assume that the subscriber list had 1,472,000
names, the sampling interval would be 1,000 (1,472,000/1,472). A
number from 1 to 1,000 was drawn at random. Beginning with that
number, every 1,000th subscriber was selected.
A brand-new dollar bill was included with the questionnaire as an

incentive to respondents. An alert postcard was mailed one week before
the survey. A second, follow-up, questionnaire was sent to the whole
sample ten days after the initial questionnaire. There were 76 post
office returns, so the net effective mailing was 1,396. Six weeks after the
first mailing, 778 completed questionnaires were returned, yielding a
response rate of 56%.
Quick question
A researcher wants to select 40 customers from a sampling frame

of 240 customers who have purchased at least $10,000 worth of
products from his company within the past six months. Using a
systematic sampling technique, and after a random start, the
researcher should select every ______ name on the list.
A. 10th
B. 6th
C. 4th
D. 2nd
Stratified Random Sampling
1. 2-step process of partitioning population
into homogeneous strata Sub-Pop2
(e.g., based on some characteristic - location, Sub-Pop1

income, etc.) Sub-Pop3
Sub-Pop4
2. Draw random sample from each stratum via
simple random sampling
3. Combine the samples from each stratum into
a single total sample Age: 18 - 25 year olds
Aim for homogeneity within strata but would have similar
heterogeneity across strata characteristics whereas
46 - 55 year olds would
The strata should be mutually exclusive and have another set
collectively exhaustive in that every population
element should be assigned to one and only one
stratum and no population elements should be
omitted.

Example: Stratified Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Randomly select a number from 1 to 5 for each stratum, A to E.

The resulting sample consists of population elements 4, 7, 13, 19, 21.
NOTE: one element is selected from each column.

Cluster Sampling
 In cluster sampling, the target population is first divided into mutually
exclusive and collectively exhaustive subpopulations, or clusters.
Common form of cluster sampling is area/geographic sampling.
 Then a random sample of clusters is selected, based on a probability
sampling technique such as simple random sampling.
 For each selected cluster, either all the elements are included in the
sample (one-stage) or a sample of elements is drawn probabilistically
(two-stage).
 The criteria for forming clusters are just the opposite of that for strata.
Elements within a cluster should be as heterogeneous (different) as
possible, but the elements within a stratum should be as homogeneous
(similar) as possible.

Types of Cluster Sampling
Divide Population into Cluster
Randomly Sample Clusters
One Stage Two-Stage
Randomly
Include All Elements
Sample Elements
from Each Selected
from Each Selected
Cluster
Cluster

Example: Cluster Sampling Sub-Pop2
Sub-Pop1 Sub-Pop3
Sub-Pop4
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Randomly select 3 clusters, B, D, and E. Within each cluster, randomly

select one or two elements. The resulting sample consists of population
elements 7, 18, 20, 21, 23.
NOTE: no elements are selected from clusters A and C.

Cluster Sampling vs. Stratified Sampling
Cluster Sampling Stratified Sampling

• Only a sample of the • All of the subpopulations (strata)
subpopulations (clusters) is are selected for sampling.
selected for sampling.
• Within a cluster, elements should • Within a strata, elements should
be different (heterogeneous), be homogeneous with clear
whereas homogeneity or similarity differences (heterogeneity)
is maintained between different between the strata.
clusters.
• A sampling frame is needed only • A complete sampling frame for the
for the clusters selected for the entire stratified subpopulations
sample. should be drawn.

Probability or Non-probability sampling?
Conditions favouring the use of...
Factors Probability sampling Non-probability
sampling
Nature of research Conclusive Exploratory
Relative magnitude of Larger sampling error Larger non-sampling
sampling error vs. non- error
sampling error
Variability in the population High (heterogeneous) Low (homogeneous)
Statistical considerations Favourable Unfavourable
Operational considerations Unfavourable Favourable
Do you have a complete list of the Only probability sampling

population with sample units identified methods allow us to appropriate
to use probability sampling? Do you use statistical analysis for
have the resources, time & skill to use population estimates (or for
probability sampling? anyone outside of the sample)
Strengths & Weaknesses of Basic
Sampling Techniques
Technique Strengths Weaknesses
Convenience sampling Least expensive; Selection bias; sample
least time not representative;
consuming; not recommended
most convenient for descriptive or
causal research
Judgmental sampling Low cost; No generalization;

convenient; subjective
not time consuming
Quota sampling Sample can be Selection bias;

controlled for No assurance of
certain characteristics representativeness
Snowball sampling Can estimate rare Time

Characteristics consuming
Strengths & Weaknesses of Basic Sampling
Techniques (cont’d)
Technique Strengths Weaknesses
Simple random sampling Easily understood; Difficult to construct
results projectable sampling frame; expensive;
lower precision; no assurance of
representativeness
Systematic sampling Can increase Can decrease

representativeness; easier to representativeness
implement than SRS;
sampling frame not needed
Stratified sampling Includes all Important Difficult to select relevant
Subpopulations; precision stratification variables;
not feasible to stratify on many
variables; expensive
Cluster sampling Easy to implement; Imprecise; difficult to
cost effective compute and interpret results

Sample size: Why is it important?
 Sample size determines the sample accuracy  sample accuracy
refers to how closely a sample’s statistic represents the target
population’s true value
Sample size = Sample accuracy
 (note: sample representativeness, which is determined by sampling

method, does not necessary increase sample accuracy)
 Factors in determining sample size:

a. The variance or heterogeneity of the population - only a small sample is
required if the population is homogenous.
b. The magnitude of acceptable error - higher precision requires a larger
sample.
c. The confidence level - higher confidence requires a larger sample.
Determining Sample Size
Type of Study Minimum Size Typical Range
• Problem identification 500 1000 – 2500
research (e.g., market
potential)
• Problem solving research 200 300 – 500
(e.g., pricing)
• Product tests 200 300 – 500
• Test marketing studies 200 300 – 500
• TV/radio/print advertising 150 200 – 300
• (per commercial or ad tested)
• Test-market audits 10 stores 10 – 20 stores
• Focus groups 2 groups 10 – 15 groups

International Marketing Research
 Identification and access to the relevant sampling elements varies
widely across countries.
 A reliable sampling frame might not be available. Government data in
many developing countries might be unavailable or highly biased.
 Identification of the decision maker and the relevant respondent might
have to be done on a country-by-country basis.
 Equivalence of samples is a key issue in marketing research studies
extending beyond the home country.
 Researchers must minimize the effects of sample differences that are
not relevant to the main purposes of the study.
 Probability sampling techniques are uncommon in international
marketing research. Rather, there is a reliance on quota sampling for
both consumer and industrial surveys.

Ethics in Marketing Research
 Appropriate definitions of the population, sampling frame, and
sampling technique are essential if the research is to be conducted
and the findings are to be used ethically.
 Probability sampling techniques should be used whenever the results

are to be projected to the population.
 When conducting research with small populations, as in business-to-

business marketing or employee research, researchers must be
sensitive to preserving the respondents’ anonymity.

Discussion Questions
1. A market researcher schedules a test market in Sydney because he feels that this city is typical
of the composition of the target market for a new product nationally. What type of sampling
procedure is this an example of?
A. judgement sampling
B. quota sampling
C. cluster sampling
D. convenience sampling
2. A grocery researcher randomly chooses several geographic areas as primary sampling units
and then interviews a sample of grocery stores within the chosen areas. What type of
sampling procedure does this represent?
A. judgement sampling
B. systematic sampling
C. simple random sampling
D. cluster sampling
3. The head of the marketing research department instructs field interviewers to interview owners
of DVD players in a shopping mall. They are instructed to each interview 15 Sony owners, 18
Panasonic owners, 10 Toshiba owners and 12 owners of other brands. What type of sampling
procedure does this represent?
A. systematic sampling
B. quota sampling
C. area sampling
D. stratified sampling
Discussion Questions
1. In a research report, suppose a researcher states that they
“randomly” stopped passers-by in a shopping centre to get responses
for their survey. Explain why this process is not truly random.
2. What are the benefits of stratified sampling? Contrast stratified

sampling with quota sampling.
3. Outline the step-by-step procedure you would use to select the

following:
a) A simple random sample of 150 students at your university
b) A stratified sample of 50 mechanical engineers, 40 electrical

engineers and 40 civil engineers from the subscriber list of an
engineering journal.

Acronym: Scales
The different comparative and noncomparative scales can be
represented by the acronym SAMPLE:
S ampling design process

A mount: sample size determination
M ethod: sampling technique selection
P opulation definition
L ist: sampling frame determination
E xecution of the sampling process

Class Activity: Introduction to SPSS
(Statistical Package for Social Sciences)
SPSS is a Windows based program that can be used to perform data
entry and analysis and to create tables and graphs.
 Become familiar with the menus and icons
 Reading data in SPSS (Data view, Variable view, and Syntax)
 Naming and defining variables
 Entering data in SPSS
 Saving SPSS files (data file and output file).
 If you are interested in learning more about SPSS, I highly
recommend Andy Field’s book: Field, A. (2013). Discovering statistics
using IBM SPSS statistics. Sage Publications.
What’s coming next?
 Week 9: Preliminary Data Analysis (Descriptive analysis & Cross-
Tabulations)
 Statistical Analyses Outline
− Descriptive statistics & Cross-tabulations [Week 9]
− T-tests (mean difference tests) [Week 10]
− Correlation and regression [Week 11]

Mobile phones popularity
Percentage of Sales of Product A by Country
12
10
18%
24%
9%
Frequency 6
12%
37% 2
0
Nokia Apple Samsung Lg Sony
Brand
UK US Italy France Germany

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MARK977 Research for Marketing Decisions

Autumn Semester, 2017

1. JP Morgan Chase Case Study

Nominal Ordinal Interval Ratio

Lowest level of Highest level of

Copyright © (Malhotra) 2015 Pearson Education, Inc.

2. Determine the type of

5. Determine the 9. Pre-test the

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc.

Step 1: Defining the Problem

Step 2: Developing an Approach to the Problem

Step 3: Formulating a Research Design

Step 4: Doing Field Work/ Collecting Data

Step 5: Preparing & Analyzing Data

Step 6: Preparing & Presenting the Report

Copyright © 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

 Sampling is one of the elements of research design involving several

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Picture sourced from: Zikmund et al., 2014,

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Define the Target Population

Determine the Sampling Frame

Select a Sampling Technique

Determine the Sample Size

Execute the Sampling Process

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Defining the target population involves translating the marketing

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Sampling Unit: Element:

Define the target population for the research objective:

 It is a list or set of directions for identifying the target population

Note: Complete sampling frames are difficult to obtain? Why?

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Nonprobability Sampling Techniques

Convenience Judgmental Quota Snowball

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Group D happens to assemble at a convenient time and place. So all

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

The researcher considers groups B, C, and E to be typical and convenient.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Elements 2 and 9 are selected randomly from groups A and B.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

1. Divide population into strata (gender) & calculate proportion of

2. Allocate total sample amongst the strata in direct proportion to

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Probability Sampling Techniques

Simple Random Systematic Stratified Cluster

Copyright © (Malhotra) 2015 Pearson Education, Inc.

SRS tends to be used for small populations or those where

Copyright © (Malhotra) 2015 Pearson Education, Inc.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

• Is more efficient than simple random

Tends to be used when companies already maintain customer lists,

Select a random number between 1 to 5, say 2.

Copyright © (Malhotra) 2015 Pearson Education, Inc.

A brand-new dollar bill was included with the questionnaire as an

A researcher wants to select 40 customers from a sampling frame