LOreal company Project analysis

LOreal company Project analysis Many cosmetic brands are popping up recently, perhaps, due  to  the increasing consumers of products that beautify and enhance the physical appearance of a person. Even though the market is already full of the said cosmetic brands, the company LOreal Groups could still  be considered as the leading supplier cosmetics and hair-color. (LOreal Introduction profile) Company Profile   Before the facial cosmetics, LOreal was known as a hair-color formula developed by French chemist Eugene Schueller in 1907. It was then known as Aureole. Schueller formulated and manufactured his own products which were sold to Parisian hairdressers. It was only in 1909 that Schueller registered his company as Societe Francaise de Teintures Inoffensives pour Cheveus, the future LOreal. Scheuller began exporting his products, which was then limited to hair-coloring products. There were 3 chemists employed in 1920. In 1950, the research teams increased to 100 and reached 1,000 by 1984. Today, research teams are numbered to 2,000 and are still expected to increase in the near future. Through agents and consignments, Scheuller further distributed his products in the United States of America, South America, Russia and the Far East. The LOreal Group is present worldwide through its subsidiaries and agents. LOreal started to expand its products from hair-color to other cleansing and bea uty products. The LOreal Group today markets over 500 brands and more than 2,000 products in the various sectors of the beauty business. Such includes hair colors, permanents, styling aids, body and skincare, cleansers and fragrances. Indeed, the LOreal Group has reached the peak that all cosmetic brands sought after. Many factors contribute to the success of the Company. These will be discussed further in the proceeding parts of this study. (LOreal Introduction profile) http://photos7.flickr.com/8100492_df5327a9c4_m.jpg Since October, the most famous general public cosmetics brand, LOreal Paris, launched its products for men named: Men Expert. LOreal group already sold a range of cosmetics products for men with Biotherm or Lancà ´me brand for example, but it was the first time it launched these products with LOreal brand. With seven different products, LOreal Paris wants to touch all targets: Young men with their skins problems, adults men with their first tiredness signs but also matures men with their first wrinkles. LOreal Paris suggests as well specifics products for men such as shaving products or after-shave lotions. The prices of this range are between 2, 80 and 9, 95 à ¢Ã¢â‚¬Å¡Ã‚ ¬. They are reasonable because these products are marketed for general public. (LOreal Introduction profile) Global branding LOreal is a good illustration of how global branding can be used to generate new growth opportunities without in any way reducing responsiveness to local needs. LOreal has a portfolio of popular brands that embody their country of origin. The French company believes that two beauty cultures dominate the French and the American. The two flagship brands, LOreal and Maybelline, have distinct positions. LOreal is positioned as a French product, with supreme elegance, high prices and sophisticated packaging. Maybelline on the other hand, represents an American value for money product which is perceived as street smart and attempts to convey the urban American chic.Owen Jones feels that creativity in a large organization such as LOreal can be stimulated through competing brands2: It sets one research centre against another research centre, one marketing group against another marketing group. They fight among themselves and in so doing, we hope, also beat the competition. In line with this philosophy3, LOreal has set up two creative headquarters, one in Paris and the other in New York. Owen Jones explains: (LOreal policy) We set up a counter power in New York with people that have a totally different mindset, background and creativity. The two hubs undertake collaborative research efforts but are competitors when it comes to marketing. LOreals American brand, Redken, competes with Preference, the companys brand in France. Owen Jones feels that healthy competition will motivate the French and American companies to perform even better. (LOreal policy) Table I LOreal: Summarized Profit and Loss Account (Figures in $ Million) 1999 1998 1997 Sales 10,825 13,417 11,522 Gross Profit 3,733 4,864 4,298 Net Income 702 839 664 Net Profit Margin (Percent) 6.5 6.3 5.8 LOreals global marketing efforts have been spearheaded by Owen Jones himself. Press reports describe his habit of moving around on the streets in overseas markets, trying to understand customer needs. Owen Jones says*: We have this great strategy back in the head office of how we are going to do it worldwide. But when you go out and look at what is happening, is there a big gap between your projections and the reality of what you see and hear? It is so important to have a world vision because otherwise decentralized consumer goods companies with many brands can fracture into as many little parts if somebody isnt pulling it back the other way the whole time with a central vision. (LOreal policy) Table II LOreal: Geographic Segment Information (Sales for 1999) $ Million Percentage of Total Western Europe 5,995 56 North America 2,972 27 Other regions 1,837 17 Total 10,804 100 Having already established itself in Europe and the US, LOreal is now seriously looking at emerging markets. Its acquisition of Soft Sheen is expected to help LOreal to penetrate the African markets. L Oreal has been rapidly expanding in India since it set up shop in 1997. It is already the market leader in Mexico. LOreals experience in China reflects some of the challenges it faces in emerging markets. The companys move to use the glamorous Chinese movie star, Gong Li to sponsor its products has not paid off. Looking back, some analysts feel that LOreal should have preferred a sponsor with the girl next door looks as ordinary customers could not relate to Gong Li. When the movie stars contract came up for renewal, L Oreal decided to involve other sponsors in place of the earlier exclusive arrangement. One important market where LOreal continues to be weak is Japan, the second largest cosmetics market in the world with annual sales of about $ 25 billion. Among the problems which the company faces in Japan are the countrys complex distribution network and strict health and safety regulations. LOreal recently regained control of Maybelline from local cosmetics maker Kose which had purchased the rights prior to LOreals takeover. Notwithstanding these problems in Japan, LOreal seems well placed to continue its global thrust. The French company has seen double digit growth for the last 10 years. As Business Week has reported, LOreal has developed a winning formula: a growing portfolio of international brands that has transformed the French company into the United Nations of beauty. (LOreal policy) LOreal: The Global Presence Marketing Strategies Customer Satisfaction (Product; Price) The LOreal Group is known for their continuous innovation in order to improve the quality of their products and the services they have to offer to their consumers. Part of their strategic plan is to cater to the best interest of their costumers, in other words, costumer satisfaction. Through giving a wide variety of products, consumers have a whole gamut of products and services that they can choose from and which best serves their preference. The range of their prices caters to the demands of women, from the younger ones to the aging, from the affluent to those with lower budget for cosmetic products. Through constant research and passion for innovation, the LOreal Group best caters to the demands of women of different cultures. The Company also sees to it that they know the latest trend, or better yet, set the trend in the market as to attract more consumers. (Padambanam, 2010) Control of the Company A very vital aspect in the success of a company is how their leaders handle and run the business. In fact, the LOreal Group is very particular in the governance of the Company. The Board directors and the Board members are well aware of all of their duties required by their respective functions and of their collective mission, for it is in their hands that the Companys future depends on. The Board members are also obliged to act with due care and attention to their duties in order to carry out their responsibilities. (Padambanam, 2010) Worldwide Marketing (Place of Distribution; Promotion) Part of the LOreal Groups strategic plan is the marketing of their products worldwide. From the bloom of LOreal during its primary stage, the Company already catered to the demands of women worldwide. In line with this, they are also well aware of the diversities of women around the world. Part of this strategy is to formulate products that suit other women from other parts of the world. Through research and development of their products, the LOreal group has already covered most parts of the globe and still got high approval ratings from their clients. Just recently, the LOreal Groups received the Diversity Best Practices 2004 Global Leadership Award for embracing diversity, not only in their employees, but also in their consumers (Anonymous, 2004). The Companys taking consideration of women of color is especially appreciated by its consumers for they are also being given the chance to enhance their features and embrace their diversity without having to conform with the traditional concept of beauty, particularly that of the white Caucasian women. The LOreal Group also has employees who are considered minorities, such as the women and people of color. Valuing of the peoples culture and ideas is important to the LOreal Group, in order to best serve the interest of the consumers, the employees and the Company. (Padambanam, 2010) D. Impeccable Advertising (Promotion)   During the early days of advertising, LOreal commissioned promotional posters from various graphic artists to publicize the Companys products. The 1950s brought about a new advertising medium, particularly the movies. LOreal made its on-screen debut during this period and in 1953 won an award advertising Oscar, the first in a long series of awards. Today, LOreal takes on actresses or different personalities of all ages that best exudes the vision of the Company. Famous personalities enable average individuals to relate to their personal lives, that they can look as good, and so ensures higher sales. (Padambanam, 2010) Example Marketing in India In business, as in life, its important to be in the right place at the right time and thats clearly been the aim of French cosmetics giant LOreal in India. LOreal Paris, Lancome and Garnier tried and tested a variety of innovation and marketing strategies that appear to have paid off. Today, LOreal reportedly has 41.5 per cent share of the market in India for hair conditioner, around 20 per cent for hair coloring products, and 6.5 per cent and 4.6 per cent for the skincare and shampoo markets respectively. Meanwhile, it is the countrys leading player in the salon products sector. Different strategies of marketing of products in India:- (Padambanam, 2010) Going Local Garnier mens product For its consumer products brands Garnier and LOreal Paris, adapting to local culture and preferences has been critical. Increasingly our blockbusters have been India innovation-led products, .Garnier redesigned its Excellence hair-coloring product that involved more manual work to mix the dye. But at a quarter of the international retailing price, it meant new consumers were more willing to buy the product. Other successes include an oil-based shampoo, Garnier Fructis Shampoo + Oil, to match the frequent use of hair oil, as well as products for previously-dormant segments such as anti-wrinkle creams and mens skincare Growing the customer base In the emerging markets, product penetration is low, providing generous room for growth.  Theres a huge growth and a desire to consume even within segments that have a lot of usage like shampoos, there is a desire to upgrade to performing products. In India there is a heterogeneous market and each one has its own preferences. On all fronts, the growth is very high. Consumer goods are also showing healthy growth rates of about 15 percent. (Padambanam, 2010) Segmenting markets   Luxury products may be selling in Indias cosmopolitan cities like Delhi, Mumbai and Bangalore, but their small customer base also makes them highly competitive markets, whether for cosmetics, fragrances or accessories. . Additionally, there is a very large opportunity in the middle market where consumers want to consume but not at very high price points, a challenge for international players like LOreal that face brutal competition from successful local brands like Marico and Dabur India and consumer goods giant Hindustan Unilever. (Padambanam, 2010) ANSWER 2 LOreal Policy LOreal is required to have an understanding of its different cultural distinctions: à ¢Ã¢â€š ¬Ã‚ ¢ Reflect consumers diversity of origins within teams at every level In terms of nationality, ethnic or social origin, age, while maintaining standards of excellence in terms of competencies. à ¢Ã¢â€š ¬Ã‚ ¢ Promote gender equity within teams Promote the access of women to positions of responsibility, facilitate gender equity in functions that are currently over-staffed by men or women (Marketing, Industry), and ensure equal treatment in terms of salary. à ¢Ã¢â€š ¬Ã‚ ¢ Encourage the employment people with disabilities. à ¢Ã¢â€š ¬Ã‚ ¢ Valorize work experience in anticipation of a longer work life. à ¢Ã¢â€š ¬Ã‚ ¢ Develop an inclusive managerial culture, respectful of all. Diversities Matrix LOreal based its approach on a Diversities Matrix, composed of 6 priority dimensions and 7 action levers: (Padambanam, 2010) http://www.loreal.com/_en/_ww/html/company/Img/diversity/matrice.jpg Translating Commercial Websites: LOreal has links to numerous country specific website Again a very good example of global marketing strategy.The Web is not only a new channel for information exchange but also a powerful instrument for businesses to reach potential customers. With well-maintained multilingual websites, a company can not only project its image across borders but also sell goods online without the material presence of a shop front (Malaval, 2001 p.204). Commercial websites are seen as a necessary marketing move to reach out to visible and invisible customers in a real as well as avirtual world. The following discussion of commercial website translation takes into account the interaction and interdependence of three elements, namely the Web, translation and advertising. On at least two counts the translation of commercial websites coincides with advertising translation. First and foremost, advertising and websites are in essence mass communication devices in modern society. Therefore it is crucial to take into account elements of advertising translation i n order to investigate website translation. (LOreal Introduction profile) C:UsersKanikaAppDataLocalMicrosoftWindowsTemporary Internet FilesContent.WordNew Picture.png The figures above are the homepages of LOrà ©al websites in English and Chinese languages. These images suggest that there are at least two templates for websites, with figure 1-1 and 1-3 sharing the same layout and the other two another. The figures of different LOrà ©al websites offer certain guidance for the discussion. First of all, the verbal elements are undoubtedly an important aspect in the investigation of translational activity. Nonetheless, the layout and other non-verbal elements altogether provide insight into whether or not images/meanings are translated. In figures 1-1 to 1-4 for instance, the spokesperson and color scheme are very obvious differences. In the global website, the spokesperson in the homepage is a scientist who won a competition sponsored by the company. Clearly the image involved here aims to promote a recent campaign and is thus placed in the eye-catching place, indicating the companys intention to create a positive and involved corporate image. Yet it is important to be aware that this is a temporary promotional event and the image can be replaced anytime after the promotional period. The images of the spokesperson in the Taiwan and Hong Kong websites are the same, featuring an actress based in Hong Kong. The spokesperson in the simplified Chinese website, however, is yet another Chinese actress with whom the local audiences are more familiar. Aside from the image appearing on the homepage, the logo of the company is placed differently in the two templates. The template of the global website presents the logo at the upper-left corner, whereas the Hong Kong website template has the logo occupying nearly one-third of the webpage. (LEE, 2009) Conclusion: In business, as in life, its important to be in the right place at the right time and thats clearly been the aim of French cosmetics giant LOreal in India For nearly two decades, the owner of brands like Maybelline, LOreal Paris, Lancome and Garnier tried and tested a variety of innovation and marketing strategies that appear to have paid off. Today, LOreal reportedly has 41.5 per cent share of the market in India for hair conditioner, around 20 per cent for hair colouring products, and 6.5 per cent and 4.6 percent for the skincare and shampoo markets respectively. Meanwhile, it is the countries Innovating for a local market, both with product and pricing, as well as an aggressive marketing strategy, have proved particularly effective, says Dinesh Dayal (MBA 84J), LOreal Indias chief operating officer. Its really a mixture of intuition, hard market research and the power of our global RD which yielded the right kind of innovation.

Philo Paper on Morality

Life is Beautiful, a film by Roberto Benign', is a two-part film, the first part was purely comedy, the other brought smiles through tears (Bert 1998). It is about a guy named Guide Orifice, a Jew, who lived in Italy with his uncle during the time of the Nazis. He fell in love with a girl named Dora, a Gentile, to whom he had his only son. He was a free-spirited man who always has his way out of misery. He can always shed light to a very miserable experience.This was specifically illustrated in the second part of the elm wherein all the Jews, including Guide, his uncle, and their five-year-old child Joshua, were taken by the Fascist and Nazis and were brought in a concentration camp. So was Dora, who pleaded the officers to let her go with his family so she also went aboard the train. There, Guide was still able to make up a story in order for his son not to be terrified. He told his son that they were Just in a big competition and they must gain a thousand points in order to win the first prize.He even went to the extremes by lingering as a translator of the Germans, Just for his child to believe that what he was saying was true, because all he said was about the competition since he really did not speak German. He also went through a lot of sacrifices Just to protect his family who was also there. He even became a waiter for the Nazi and used the intercom to tell his wife at the other end of the camp that he loves him so much.He risked his life because his wife's and child's life are more precious to him than his So the main issue here that must be dealt with in relation to morality and peace is he very act of Guide lying to his child Just to protect his life and his innocence from the terror that the concentration camps bring so that he will never lose hope that some day they will go out there as victors. But the question remains whether it is right to lie Just to save someone from the terrible truth of life or not?Does it Justify the act because it may lead to peace? Having plotted the situation in the film and having rendered it noble for a man to do such thing Just to have his child protected, white lies would then be acceptable in he society despite the fact that it still constitute lies. Lying is wrong, however, if these white lies, which aims to salvage the other by not telling the truth, were acceptable now a days, would these then be viewed as moral?But wouldn't this corrupt the people's view regarding the evil of lies? In light of the technical norm, which has to do with the matter of survival and thus of the health and well being of human individual and the community (Rexes, Ground and Norm of Morality 1989, 1), what Guide has done in order for his child to survive is right. His lies were Justified because those were for the good of his son and for him not to get killed in the concentration camp.However, this act would run in conflict with the moral norm, which refers to the dignity of the human person (Rexes, Ground and Norm of Morality 1989, 3). Lying, when viewed in this aspect would be wrong despite the fact that it is for the benefit of another person because the very act of not saying the truth entails deviation of man from the uncorrupted state of not lying. Since there lies a violation of the dignity of man, the act is Judged to be wrong. Another way of looking at the act done of Guide is through the lens of Moral Dimension.One of its features is the sense of obligation, which signifies imperative, something one must or ought to do, or not in accordance with some rule or principle (Rexes, Ground and Norm of Morality 1989, 93). In Guides situation, what one ought to do as a father and a husband is without a doubt to save his family from the horrors of the place they are in, so he lied to his son for him not to be frightened because this is what he believed must be done. He believes that the meaning of his existence is to be able to protect his family, especially his son.So he resulted into lying, but he only did this with the purest intention and for the simple reason that he loves his child so much. But when analyzed in view of the tells, which is the search for truth and meaning of all things and the search in general for mutual recognition of consciousness referred to as love (Rexes, Ground and Norm of Morality 1989, 89), it would certainly be an immoral act. Although his acts were moved by love for his son, e stole the truth from his child by not telling him the real reason why they were there.His act of lying is a clear deviation from the orientation toward the tells, which is geared towards the ultimate meaning and communion of all consciousness (Rexes, Ground and Norm of Morality 1989, 89), rendering his action to be bad. The final article to be used in analyzing the issue at hand is Plat's â€Å"Debauchery'. Here occurred the discussion of Socrates and Typhoon about the holy. Socrates pointed out that not all the Just are holy, only part of the Just is holy and the other is meeting else (Plato 2010, 13).In light of this, one may infer that Guides act could be Just since it upholds the life of his child. By lying and keeping him from the Nazis, he was able to protect his child and save him from the possibility of early death. Although it would be rendered Just, it could not be rendered holy. This is so because According to Socrates, which was agreed by Typhoon, an act, to be holy must essentially be holy in whatever form and not merely because the gods loved it. Holiness must come first before it is loved.Therefore, lying is not holy since goodness s not innate in the act itself even if the end goal was good. In conclusion, considering all the description of morality, lying itself is not in accordance to what is moral in the eyes of man or of the gods. Yet, when the reason for his lies is taken into further consideration, the act may seem Justifiable, but it does not necessitate that it is already morally right. Another thing worth noting is t hat morality is not Judged only in accordance with what one thinks is right or bad because this might result into one concluding that morality is relative.This should to be the case because what is moral does not vary, what varies are the lenses used in analyzing the act done. Therefore, one must be critical in the analysis of an act in order not to render false Judgment.

80’s Celebs and Fashion Icons

The eighties produced some of the most influential men and women in fashion being Madonna, Princess Diana, Cyndi Lauper, Debbie Harry, and Michael Jackson. Like never before, musicians became fashion icons and trendsetters. The eighties were known for sex appeal for both men and women. For the men, tanned chests and open collars were in due to the influence of Miami Vice. The young women of the eighties were seen in leg warmers, mini skirts, off the shoulder blouses, chunky jewelry, acid washed jeans, and lace gloves. Princess Diana’s love for fashion and elegant style set a trend for women all across the world.Diana gained media coverage daily to people all across the world. She was chased by the press for her up-to-the-minute look. Brand labels often produced copies of her latest look which flew off the shelves. People ages thirty five to forty five looked at Diana as their fashion frontrunner. Princes Diana supported many designers including Catherine Walker, Arabella Polle n, and David Emmanuel. Diana’s wedding dress was designed by David Emmanuel in 1981. The dress had very large puffed sleeves, a full skirt, 10,000 pearls and sequins, and a twenty five foot train.The style and design of this dress set a trend for brides in the eighties. Madonna was a fashion icon that appealed to young women of the eighties. Her outrageous outfits caused controversy and resulted in young girls wanting to experiment with their looks. Madonna’s transformation of looks made her stand out throughout the decade. Madonna was considered the ‘it’ girl of the 80’s. Madonna created many trends which some are still seen today including miniskirts, teased hair, lacy stockings, leg warmers, and chunky jewelry as well as cross pendants.Madonna also brought fingerless gloves into fashion in the eighties. She made fingerless gloves look hip, stylish, and sexy. Cyndi Lauper created her own unique style which was influenced by the punk rock look. Cyn di Lauper was known for her sense of color and outrageous hair styles. She often wore bright, colorful makeup including eye liner on both top and bottom of the eyes. Her hair style was short on one side and often had different, bright colors in it that changed on a regular basis. Her fashion sense didn’t follow any rules.She incorporated as many colors as possible in her fashion in order to not fade in the background. She wore a lot of accessories such as bangle bracelets and beaded necklace. This fit into the eighties over accessorized theme. She was all about having fun and mixing and matching various pieces of clothing that usually wouldn’t be worn together but Cyndi made it work. She was able to influence the way her fans dressed when music videos became visible. Since gaining recognition as a member of the Jackson Five in the 70’s when Michael Jackson went solo in the 80’s his fans went wild.One of the ways Michael Jackson was able to successfully pr oclaim himself as the â€Å"king of pop† was by dressing like a king. His skin tight leather outfits, shiny black shoes, and sparkle glove, along with his mullet hair style is still a look that is known to belong to Michael Jackson. Fedora hats were also made popular through the use of Michael Jackson. One of the key elements that added to his leather jackets was how Michael Jackson wore the leather jackets. He made the jackets not just look like show pieces, he made them look comfortable. He rolled up the sleeves, owning the look.He also did this with his tuxedo jackets, rolling up the sleeves. Some celebrities today continue to follow this look by pulling up the sleeves to their jackets such as Kanye West. Debbie Harry quickly became a punk icon. She was known for incorporating humor with the seriousness of fashion. Debbie Harry also known as â€Å"Blondie† was recognized for her bold outrageous prints, painted on denim, high heels. Harry combined the cutting edge, b old rocker style with the glamour of Hollywood. She remained very popular throughout the decade of the eighties.Fashions of the eighties will be remembered as bold, bright, and bodacious. Fashion became a part of many celebrities image and helped each of them to set themselves apart from everyone else. Many trends set by celebrities and fashion icons became standard way of how people dressed in the eighties. The decade of the eighties was all about finding individual identity and expressing yourself. Many ideas adapted in the eighties still lives on today. American designers such as Donna Karan emerged in the eighties. Donna Karan started out as the head designer for Anne Klein but left the company in 1984 to form her own company.Donna Karan is known for her contribution in fashion in the eighties for the bodysuit and also her â€Å"Seven Easy Pieces† collection. The bodysuit was known as â€Å"the body†. It was made out of a jersey material and designed like a leotard . This one piece design gave women a smooth silhouette. The Seven Easy Pieces collection consisted on interchangeable coordinates that could be worn daily and also could be mixed and matched. Since during this time period women were starting to climb the corporate ladder and trying to break the glass ceiling, power dressing was in.People were looking for functional clothing, yet elegant, and simple in either black, grey, or white. Donna Karan designed a line of women’s power clothing including work suits which became extremely successful. She became known as â€Å"The Queen of Seventh Avenue†. Karan insisted that she only designs clothing that she would wear herself. She is known for supporting the needs of modern women. In 1988 Donna Karan extended her women’s signature collection to a less expensive line for younger women called DKNY. The line was so successful that Karan became known as the first designer to establish a bridge collection.She then launched DKN Y Jeans, a men’s line, and also a children’s line, and line of beauty products. All of the branches of her collection were very successful. Famous clients include Demi Moore, Bill Clinton, and Barbra Streisand. Years later Donna Karan is still respected as one of the world’s most talented designers. Donna Karan made her mark in fashion and continues to do so today. Recently Karan has gained negative press due to her use of fur in her designs. Animal rights groups demand people boycott her line until she no longer uses fur. Work Cited Kettleson, Casey. 2010, january 6). Styled on icon: debbie harry. Retrieved from http://www. styledon. com/culture/styledon-icon/articles/styledon-icon-debbie-harry Marini, Stephanie. (n. d. ). 80's style icons. Retrieved from www. askbronny. com Donna karan fashion deisgner. (n. d. ). Retrieved from www. infomat. com Nellis, Cynthia. (n. d. ). Design byte. Retrieved from www. about. com Whitley, P. (2008). 1980-1989. American Cultu ral History. Lone Star College-    Kingwood Library, Kingwood, TX. Retrieved from http://wwwappskc. lonestar. edu/   Ã‚  Ã‚  Ã‚  popculture/decade80. html

How To Calculate the Margin of Error

Many times political polls and other applications of statistics state their results with a margin of error. It is not uncommon to see that an opinion poll states that there is support for an issue or candidate at a certain percentage of respondents, plus and minus a certain percentage. It is this plus and minus term that is the margin of error. But how is the margin of error calculated? For a simple random sample of a sufficiently large population, the margin or error is really just a restatement of the size of the sample and the level of confidence being used. The Formula for the Margin of Error In what follows we will utilize the formula for the margin of error. We will plan for the worst case possible, in which we have no idea what the true level of support is the issues in our poll. If we did have some idea about this number, possibly through previous polling data, we would end up with a smaller margin of error. The formula we will use is: E zÃŽ ±/2/(2√ n) The Level of Confidence The first piece of information we need to calculate the margin of error is to determine what level of confidence we desire. This number can be any percentage less than 100%, but the most common levels of confidence are 90%, 95%, and 99%. Of these three the 95% level is used most frequently. If we subtract the level of confidence from one, then we will obtain the value of alpha, written as ÃŽ ±, needed for the formula. The Critical Value The next step in calculating the margin or error is to find the appropriate critical value. This is indicated by the term zÃŽ ±/2 in the above formula. Since we have assumed a simple random sample of a large population, we can use the standard normal distribution of z-scores. Suppose that we are working with a 95% level of confidence. We want to look up the z-score z*for which the area between -z* and z* is 0.95. From the table, we see that this critical value is 1.96. We could have also found the critical value in the following way. If we think in terms of ÃŽ ±/2, since ÃŽ ± 1 - 0.95 0.05, we see that ÃŽ ±/2 0.025. We now search the table to find the z-score with an area of 0.025 to its right. We would end up with the same critical value of 1.96. Other levels of confidence will give us different critical values. The greater the level of confidence, the higher the critical value will be. The critical value for a 90% level of confidence, with a corresponding ÃŽ ± value of 0.10, is 1.64. The critical value for a 99% level of confidence, with a corresponding ÃŽ ± value of 0.01, is 2.54. Sample Size The only other number that we need to use the formula to calculate the margin of error is the sample size, denoted by n in the formula. We then take the square root of this number. Due to the location of this number in the above formula, the larger the sample size that we use, the smaller the margin of error will be. Large samples are therefore preferable to smaller ones. However, since statistical sampling requires resources of time and money, there are constraints to how much we can increase the sample size. The presence of the square root in the formula means that quadrupling the sample size will only half the margin of error. A Few Examples To make sense of the formula, let’s look at a couple of examples. What is the margin of error for a simple random sample of 900 people at a 95% ​level of confidence?By use of the table we have a critical value of 1.96, and so the margin of error is 1.96/(2 √ 900 0.03267, or about 3.3%.What is the margin of error for a simple random sample of 1600 people at a 95% level of confidence?At the same level of confidence as the first example, increasing the sample size to 1600 gives us a margin of error of 0.0245 or about 2.5%.