How to Determine the Right Sample Size for Effective Market Research (Full Transcript)

Speaker 1: Welcome to Surface Sparrow, and in this video, we'll be telling you how to determine the sample size for market research. Before introducing a product, a company makes use of market research to establish the needs of the targeted audience. Once the product has hit the market, the company uses market research to recognize the features that can be leveraged to generate hype about the product. Once that is over, the objective shifts to find out how to improve the performance of the product. The last stage is when the company uses the research to understand where to take the product in the future. Having the right sample size is key for the success of any research, let alone market research. A sample can be defined as the chosen number of respondents in such a way that they represent the total population. Now, to decide the sample size, we have four variables to consider. 1. Population Size This is about knowing the number of respondents that fit in your demographic. If your survey is about doctors in the US, then it is the number of doctors in the US. 2. Margin of Error You must accept that no sample will ever be perfect. It can be explained as the positive or negative deviation that you allow in your survey results. If your survey results say 80% of teenagers can drive with a margin error of plus or minus 5%, you can be sure that the results may vary only up to 85% or 75%. 3. Confidence Level Taking our previous example, this tells us how confident we are that results are going to fall only within this margin of error, which is plus or minus 5%. If you choose 95%, then you can say that you are 95% sure that 75% to 85% of the teenagers can drive. 4. Standard of Deviation This gives the variance you are expecting from the responses, and not results. Do not confuse it with the margin of error. Now that we have this under control, let's look at the calculations. Your confidence level is your Z-score. For 90%, Z-score equal to 1.645. And for 95%, Z-score equal to 1.96. And for 99%, Z-score equal to 2.576 and so on. The equation is sample size equal to Z-score into 2 multiplied by standard deviation into 1 minus standard deviation whole divided by margin of error into 2. Taking the previous example into consideration, let's calculate the sample size, shall we? We are 95% confident that our result will be having a 5% margin of error with 0.5 standard deviation. The math would be 1.96 into 2 multiplied by 0.5 into 0.5 whole divided by 0.05 into 2 equal to 384.16. Rounding off, you would need 385 respondents. Now you can determine the exact sample size needed for your next survey. You could also free up your time and lay back while our free sample size calculator does it for you.