344

Part4

Sample Design for Data CoUection and Sample Size

CASE 4 .1

Riverside County Humane Society (B)

Like a lot of nonprofits, Riverside County Humane Society (RCHS) is being expected to do more (services)
with less (funding and donations). In an effort to halt
further decline in the quality of its services and to provide better care for the pets at the center, the Membership Committee of the board of directors began
making plans for a member/contributor drive. The organized drive was the first of its kind for the local
chapter and the committee members wanted it to be as
productive as possible.
As the plans began to evolve, the committee realized
that the organization had only scattered bits and pieces
of information about its current members. It did have a
list of members and contributors for the last five years
that had been compiled by the RCHS staff. In addition, it
had access to the results of a survey that had been done
by a staff member several years earlier that focused on
member usage of shelter facilities and their opinions of
shelter services and programs. However, the organization had only sparse knowledge of the profile of its
typical member and contributor, why they belonged or
contributed, how long they had been associated with the
humane society, how the services of the humane society
could be improved, and so on. The committee members
believed information on these issues was important to
the conduct of a successful membership drive, and thus
they commissioned research to secure it
Initial contacts with other humane society chapters
and interviews with some RCHS staff and board
members produced a number of hypotheses regarding
who is likely to become a member or contributor, why,
how much people are likely to give, and so on. The
researchers are interested in examining these hypotheses through a mail survey sent to current members and contributors. (See Case 2.2, Riverside County
Humane Society (A) for details.)

Sam pling P lan

who were receiving the newsletter. Both lists were

alphabetical. The contributor list included the amount received from each person or business, but not the number
of times the person or business had given during the last
five years. The member list showed the number of years
each organization or person had belonged.
For purposes of the study, all names of businesses or
other organizations were deleted and a separate sample
was taken from each list Approximately 1,050 people
were on the member list and 300 on the contributor list
The researchers decided to take 120 names from the
member list and 50 from the contributor list. They identified those to be sent questionnaires by drawing two
random numbers-3 and 5-using a random number
table. They then sent questionnaires to the 3'd, 11th,
19th, and so on, person on the member lis~ and the 5th,
11th, 1?1h, and so on, person on the contributor list
QUESTIONS

1. What is the sampling frame and is it a good frame

for the target population?
2. What type of sample is being used?
3. Can you think of some ways in which the sample
could be improved?

CASE4.2

Sampling Le ad-Us ers for N ew

Products
The new, hot thing in testing new product concepts and
product specifications 1s to bring in samples of "leadusers.. -the customers who are innovators"' in terms
of diffusion of innovation, or those who precede the
"early adopters'-they're the earliest of adopters. The
idea is that these customers are so highly involved in
this product category that they're likely to encounter
needs and desire benefits before the rest of the marketplace might even recognize that there's an issue or
an unmet need. Their customer involvement is also so
high that they're very likely to agree to be involved in
beta testing products or giving their expert opinions
about product design and the like.

For the last five years, the RCHS had maintained a

master list of members and contributors. Contributors
were those who had sent a donation to RCHS but had
not filled out an official form making them members,
QUESTIONS
which essentially entitled them to receive RCHS's
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Cases

'2. Is this a probability sample? A cluster sample? A

stratified sample? A convenience sample?
3. What limitations might there be to a lead-user
sample?

CASE4.3

Sampling from Your Loyalty

Database
Cain is a holding company that publishes magazines. It
has a large subscription database, across all its magazines. It wants to use this database to get feedback on
some ideas about a new magazine, a new loyalty program, and a new pricing policy as it makes its periodicals available online.
Here's what they're thinking of doing. They have the
entire database-that's their sampling frame. They're
going to split the customers into "good ones" (subscribe to two or more magazines), "current customers'"
(subscribe to one), and 'lapsed customers (those who
subscribed to one or more, more than six months ago
but did not keep up their subscription).
Then, the database is huge and they only want a
sample of 300 of each group (good/ currenV lapsed
customers). So once the database is parsed into these
three groups, they're going to take every 501h customer
in the database until they have 300, then stop and go
onto the next group.

QUESTIONS

1. What kind of sampling plan is this?

'2. Evaluate the sampling plan.

Table 4 .4 . 1

CASE4.4

International Differences in the

Cost of Data
A multinational bank, MNB, was interested in measuring customer satisfaction with its consumer banking
services and financial products. The managers at MNB
Corporate differed in their opinions regarding the form
of the optimal customer satisfaction study: survey,
focus group, interview, and so on. So as a starting point,
MNB commissioned bids from marketing research
firms in the United States to describe how they would
approach studying their U.S. banking customers. In
particular, they asked the bidding firms to offer cost
estimates, that is, how many customers could be sampled given the proposed budget of $1 5,000 for this
research project using different techniques.
The bids covered a variety of research methods,
which differed in their costs. They considered a personal
interview method in which the customer would be intercepted in the bank and asked several questions regarding service and satisfaction. They compared that
method to the costs of sending out mail surveys to
current customers. Finally, they explored the efficiency
of placing small, postcard-sized surveys at each teller
station that the banki ng customer might pick up and
complete and return at their leisure.
MNB gathered the marketing research firms' proposals to begin to make a decision of how the bank should
approach its customers. In terms of outlay expenses,
more postcards could be printed less expensively than
surveys sent or interviewers staffing each of the local
bank branches. However, in terms of response rates,
somewhat fewer people turned down the personal interview than who returned the mail survey or postcard
survey. Table 4.4.1 presents the comparative estimates

The Estimates for the U.S. Samples

a. Researc h bu dget
b. Cost per contact
c. Prospects reached
d . Respo nse ra te
e. Estima ted net sample size (c x d )
f. Effective cost per capita (a/ e)

Interview

Mail Survel:'.

Postcards

$15,000
$ 25
2,400
5%
120
$1 25.00

$15,000
$2 .50
6,000
3%
180
$83.33

$15,000
S.25
60 ,000
1.5%
900
$ 16.67

For mail and postcard, c = alb; for interviews, cost is $ 25 per hour, times a f1vehour day, = $ 125 per day, for each interviewer. Each of 12
1nterv1ewers (spread across the area local bank branches) would spend two weeks ( 10 bank days) approaching and interviewing customers.
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Each interviewer on each day would This
target
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customers,
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346

Part4

Table 4 .4 . 2

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Sam ple Design for Data Collection and Sample Size

.. .

:.,! ,

;,_

,~

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The Pr.ojections'for Indonesia

a. Research budget
b. Cose per concact
c. Prospects reached
d. Response rate
e. Estimated nee sample size (c x d)
f. Effective cost per capita (a/e)

Interview

Mail Surver

Postcards

$15,000
$12*
5,000
20%*
1,000
$15.00

$15,000
$ 2.5 0
6,000
1.5%*
90
$166.67

$15,000
$. 25
60 ,000
.5%
300
$50.00

'These estimates differ from those for conducting the research 1n the U.S. labor costs for mterv1ew1ng are much less, propens1t1es
for customers to acquiesce and be interviewed are much greater, mail surveys are somewhat less efficient because CD-ROM databases on
addresses are less accurate, and postcards are an unfam1l1ar format and are therefore rarely filled out. Given the changes 1n the interviewing
parameters, If the project duration is still two weeks, 25 1nterv1ewers can be deployed, so 5,000 customers would be approached.

for the three different techniques. The table shows

clearly that in the U.S., the postcard technique appears
to be the most cost effective. Thus, the bank managers
are considering implementing this research tool.
MNB's second concern is with a few of its satellite
locations-in particular, the news from abroad is that
the Indonesian banking customers are not happy-and
MNB wants to understand what is going on. Its first
assumpt ion was that the bank should proceed with the
postcard methodology to be able to compare the results in Indonesia to those from the States. However,
they conducted some preliminary investigations and
found the costs of the methods to be quite different.
The bank plans to proceed with personal interviews in
Indonesia. Consider Tables 4.4.1 and 4.4.2 and answer
the questions that follow.

responsible for building two initiatives. First, you're

creating a Web site for social support-blogging by
users and carriers to talk about their drug experiences
but also how their disease impacts their lives, how they
cope, things they've learned, just general, "we're here
for you' kind of support. The second initiative is based
on several pharma-firms' recent successes with flavors
for children's medicines. Your drugs are for adults but
you figure, if it works for kids, why not for adults too, so
you're exploring the possible desire for several flavors
(cherry, strawberry, pina colada, etc.).
Your team would like to get some good consumer
data before proceeding, because each initiative would
eventually require a good level of financial backing.
You've got a beta version of the Web site developed,
you're ready for potential-user feedback, and your
chemists have created several flavors that are
QUESTIONS
palatable, which your team is ready to test.
1. Under what conditions might it matter that one
Your team meets with your boss and his boss. Your
method is used in one country and another method
team has proposed a combination of marketing reis used in another?
search methods, including a few focus groups, some
online surveys, and some mall-intercepted interviews.
2. What is the target population under investigation,
Your boss is supportive, as you all knew he would be,
both in the U.S. and in Indonesia? What are the
from previous meetings, but he's keeping quiet bedifferences between the sampling frames of each
cause this meeting is the first during which the ideas
of the three techniques? What customers will each
are being presented to the big boss.
technique miss?
The big boss likes the focus group idea, doesn't
3. What other issues must the bank managers conreally like the mall-intercept idea, but mostly wants resider in addition to the cost efficiencies of the three
sults quickly ("yesterday!" ) and cheaply (ideally freemethods?
no line on the marketing budget). You all know he's
exaggerating, but he's like that, and you know he's not
CASE4.5
exaggerating by much. So, he's pushing doing the
Online Samples
testing of the Web site and the flavors via your online
customers
whoin the
have
You're working for a large pharmaceutical
onuse by panel
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Ma, past
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a brand management team, and your
team
is
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drugs.
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Cases

QU E STIONS

1. The online panel was, of course, part of your proposal. Shall you just " back down" and do what the
big boss wants?
2. What are the characteristics of the e-panel likely to
be?
3. What kind of information can you obtain from the
online survey?
4. Will you be ready to launch both initiatives after
conducting solely the online survey?

CASE 4 .6

Sampling Gambling
Americans spend nearly $50 billion annually on gambling. That expenditure is more than three times t he
amount spent on going to the movies and theme parks,
as alternative means of entertainment. State-run lotteries and casino games are the most popular legal
games of chance.
Gambling traditionally held negative connotations,
being associated wit h immoral or even criminal behavior.
Crit ics worry that legalized gambling can encourage
compulsive gamblers, that it may encourage people to
gamble who can least afford to do so, and that casinos
bring an undesirable element to the surrounding
neighborhood.
Legalized gambling, however, especially in the form
of state lotteries, has largely sanitized the image of
gaming behavior. Among people who abstain from
gambling, fewer people cite moral or relig ious objections, instead offering practical reasons: e.g. they don't
want to spend the money, or they don't have the money
to spend. Proponents claim casinos create jobs and
provide revenue for education that would otherwise be
raised by tax hikes.
Secondary data suggest that there is no particular
demographic profile of a gambler-people of all walks
of life (e.g. age and income) enjoy casinos and lotteries.
Beyond demographics, the commonly held motivations
appear to be a desire to win a large amount of money,
and a quick and relatively inexpensive form of
entertainment.
The heterogeneity of the demographics of gamblers
and the homogeneity of their motives have left some
casino managers perplexed as to how the consumer

347

market might be segmented. One hypothesis, based on

collective wisdom, is that novice gamblers tend to prefer slot machines because t hey are simple, whereas
more experienced gamblers prefer games like blackjack, baccarat, and craps because they are more strategic in nature. Another frequent assumption is that
people who buy lottery tickets are different from people
who go to casinos, and that the two types of games
satisfy different needs.
The Internet introduces yet another medium in
which a consumer might gamble. Although the number
of gamblers online are far fewer than those who
frequent casinos or lotteries, and online gambling revenues are far less than nonelectronic games (approximately only $2 billion), the online gambling industry is
expected to enjoy rapid growth.
If a gaming industry representative were to come to
you and say, " I'd like to do some interviews. I want to
know more about what kinds of games my casino visitors want me to provide. I want to know how much floor
space to allot to slots versus blackjack tables. I want to
know why they come to any casino, or my casino, rather
than to the movies or something. Maybe I should just
sell lottery t ickets." How would you address the following issues?
QUESTIONS

1. What is the relevant population?

2. What would you recommend in terms of a sampling
plan- would you intercept people in (or entering or
exi ting) casinos? Would you talk to people buying
lottery tickets at convenience stores? Would you
interview people strolling along in a shopping mall?
What sampling frame does each of these locations
presume?
3. If you wanted to verify the aforementioned assumptions (for example, that demographics do not
matter, or that novice versus experienced gamblers
have different game preferences), how would you
modify your sampling plan?
4. How would you try to assess objectively whether
there are moral or religious concerns against gambling? What kinds of sampling plans would you
need to avoid, given the likelihood that they would
shape your conclusions pro or con?

This document is authorized for use by Raymond Ma, from 3/14/2016 to 4/20/2016, in the course:
MGMT 686.001: Marketing Research - Porter (Spring 2016), Rice University.
Any unauthorized use or reproduction of this document is strictly prohibited.