Global Motors

Question
Marketing Research Week 5 Assignment

Case 9.2 Global Motors
Global Motors:
After some deliberation, Cory Rogers of CMG Research and Nick Thomas of Global Motors are now confronted with the data collection method for the Global Motors survey down to the use of an online panel. With the data collection method and questionnaire design settled, Global Motors are now confronted with the data collection step in the marketing research process. While the size of the sample is not precisely know, it is understood that it will be “quite large.” However, the principals involved realize that a large sample size will be useless if the sample selection process fails to garner a representative sample.
With some though and a bit of discussion, the principals have come to agreement that the population is all households in the United States. The major issue to resolve in these population definition debates was whether to include individuals who do not own vehicles. Eventually, it was decided to include the nonowners, as the development and ultimate manufacture of the new models has a five-year horizon, and it is possible that in that time period, nonowners could move into the vehicle owner category. At the same time, the attractiveness of electric and/or hybrid vehicles may be great for vehicle nonowners, and it did not seem prudent to leave out this possibly significant segment of the potential vehicle-buying public. Recent census estimates place the number of U.S. households to be approximately 115 million units.

Case Objective
The integrated case requires you to assess the application of various sample methods when the goal is to obtain a sample that represents all Americans who may purchase an automobile in the next 3-5 years.

1. Specify the population definition.

2. If a probability sampling method is to be used, what would be a reasonable sample frame for:
a. A telephone survey
b. A mail survey
c. An online survey

3. What are the practical problems involved with drawing a simple random sample of American households (regardless of the survey method)?

4. If random digit dialing was used for the sample plan, what are the advantages and disadvantages of this sample method?

5. Should Global Motors use a probability online panel such as the one maintained by Knowledge Networks, Inc? With respect to sample design, what are the advantages and disadvantages involved with using this approach? (You may want to review Knowledge Networks, Inc. services by visiting its website at www.knowledgenetworks.com.)

Case 10.2 Global Motors
Global Motors: Nick Thomas, CEO of Global Motors, has agreed with Cory Rogers of CMG Research to use an online survey to assess consumer demand for new energy-efficient car models. In particular, the decision has been made to purchase panel access, meaning that the online survey will be completed by individuals who have joined the ranks of the panel data company and agreed to periodically answer surveys online. While these individuals are compensated by their panel companies, the companies claim that their panel members are highly representative of the general population. Also, because the the panel members have provided extensive information about themselves such as demographics, lifestyles, and product ownership, which is stored in the panel company data banks, a client can purchase this data without the necessity of asking these questions on its survey.
Cory’s CMG Research team has done some investigation and has concluded that several panel companies can provide a representative sample of American households. Among these are Knowledge Networks, e-Rewards, and Survey Sampling International, and their costs and services seem comparable: for a “blended” online survey of about 25 questions, the cost is roughly $10 per complete response. “Blended means a combination of stored data/base information and answers to online survey questions. Thus, the costs of these panel company services are based on the number of respondents, and each company will bid on the work based on the nature and size of the sample.
Cory Knows his Global Motors client is operating under two constraints. First, ZEN Motors top management has agreed to a total cost for all of the research, and it is up to Nick Thomas to spend this budget prudently. If a large portion of the budget is expended on a single activity, such as paying for an online panel sample, there is less available for other research activities. Second, Cory Rogers knows from his extensive experience with clients that both Nick Thomas and Zen Motors’ top management will expect this project to have a large sample size. Of course, as a marketing researcher, Cory realizes that large sample sizes are generally not required from a sample error standpoint, but he must be prepared to respond to questions, reservations, or objections from Nick or Zen Motors managers when the sample size is proposed. As preparation for the possible need to convince top management that CMG’s recommendation is the right decision for the sample size for the Global Motors survey, Cory decides to make a table that specifies sample error and cost of the sample error.

Case Objective
This case requires you to compute sample size error and to calculate the associate costs of various sample sizes computed.

For each of the following possible sample sizes listed, calculate the associated expected cost of the panel sample AND the sample error:

1. 20,000

2. 10,000

3. 5,000

4. 2,500

5. 1,000

6. 500

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