The object of market research is to find information that generally refers to people’s opinions about something or someone. It is almost always impossible to poll (ask) everyone who might matter, let’s say all potential voters. In this example, all possible voters would include the “universe.” Instead, market researchers examine part of the universe. This is called the “sample.”
REMEMBER: The sample is the key ingredient in the recipe or statistical process. No matter how advanced the analysis is, without a sample that accurately reflects the universe, you have GIGO.
Perhaps nothing illustrates this point better than the famous Literary compendium survey. Literary compendium it was a successful American magazine. In 1936, he published a poll predicting that Republican presidential candidate Alf Landon would easily defeat incumbent Franklin Delano Roosevelt (FDR) to be reelected president. Tea Literary compendium used the proper analysis. But he didn’t consider that just by surveying (sampling) his readers more people on readily available lists such as phone books, he was not sampling typical American voters.
The reason is that during the depths of the Great Depression, only the wealthiest Americans, who tended to be Republicans, could afford a subscription to a magazine and a telephone. At the same time and independently of Literary summary, a generally unheard of statistic was sampling considerably fewer truly representative American voters (5,000 versus 2,000,000). He accurately predicted FDR’s landslide victory. Shortly after the elections, Literary compendium closed while George Gallup became perhaps the best known of all pollsters.
The Literary Digest sample was what is called “skewed.” The Gallup sample was what is called “random.” The laws of probability dictate that a random sample will better represent the universe than any other type of sample. However, to be random, each member of the universe must have the same probability (equal probabilities) of being sampled.
Now you can see where Literary compendium He had a major problem and the result was GIGO.
The first step in this random sampling process is to define the universe. For example, in politics, the universe is everyone who has the right to vote, registered voters or some other group of people. Much depends on the purpose of the survey. Another point is that many surveys claim to use a random sample or make readers think that the sample was random, when in fact the sample was not. That’s one of the tricky things about interpreting survey results, and it often takes a few skillful questions to determine.
Similarly, if you are trying to determine the market potential for a new product, who is likely, not who you want, to be in your universe? Those are the people you want to randomly sample.
The only improvement in random sampling is when, with high certainty, the universe can be divided into different “strata.” Random sampling from each stratum produces a stratified random sample. But remember that knowing the strata is critical to making successful predictors from stratified random samples.
Sometimes you don’t know that your universe is. One way to try to determine that universe is with focus groups drawn randomly from the general population. A future article will discuss focus groups.
