Starting a new business requires careful planning and detailed market-research. Business research involves gathering of data that provides detailed information about the dynamics of the market. It also provides information about the demands of the customers. Accessing information from the entire population of your market is very expensive and lengthy. This is exactly where sampling comes into play.
What is sampling?
Sampling is the process of collecting data from a portion of the population in the market. Drawings from sampling stand out as the estimates of the whole. With help of careful design and analysis, marketers get all the required information from target population.
Steps in Sample design
Sample design depends on the nature of the required data and sample selection process. Following are the steps in sample design:
- Defining population
- Establishing sample frame
- Determining sample size
- Specifying sample method
- Selecting sample
Defining the population:
A market-research-company defines population based on the constituents of the units and sampling units of analysis, designation of the units and timeframe that the data refers to.
Establishing sample frame:
Sample frame is the list of all the elements in the target population, used for drawing samples. Sample frame needs to represent the intended population else, it affects the reliability of the sample result of business research report.
Determining sample size:
Sample size of the research is determined by using subjective methods or by drawing statistical formulae. The subjective method has a conventional approach, based on cost while statistical approach involves more sophisticated confidential interval approach.
Specifying sample method:
There are two basic methods of sampling, namely, probability sampling and non-probability sampling. Both these methods have subtypes and methods.
- There are four types of probability sampling- simple random sampling, systematic random sampling, stratified random sampling and cluster random sampling.
- There are three types of non-probability sampling- quota sampling, convenience sampling and judgment sampling.
Limitations of sampling
There are a few limitations of sampling for market research. They are:
- Sampling demands rigid control in operation.
- Drawings of subgroups need to be studied more carefully due to minority.
- Accuracy level of the data subjected to weight and size.
Different methods of sampling will produce different drawings of data hence it is critical to make sure that the sampling data matches with the answers of the market research questions. Overall, sampling provides information that is more comprehensive in more economical, faster and practical way.
MarketsandMarkets is a global market research and consulting company based in the U.S. We publish strategically analyzed market research reports and serve as a business intelligence partner to Fortune 500 companies across the world.
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