CHAPTER 6

SECONDARY DATA SOURCES

Important Topics of This Chapter

• Success of secondary data.• To understand how to create an internal database.• To distinguish between primary and secondary

data and understand the advantages and disadvantages of each.

• Locating secondary data base.• To understand the role of the Internet in obtaining

secondary data.• To learn the nature of decision support systems.

The Nature of Secondary Data

Secondary data are pieces of information that have been gathered and only might be relevant to the problems at hand. Primary

data, in contrast, are survey, observation, or experiment data collected to solve the particular problem under investigation.

Sources of Secondary DataThere are two primary sources of

secondary data:

The Company Itself

(Internal Databases)

Other Organizations or Persons

(External Databases)

Different Types of Databases

• Internal databases.• External databases.• Computerized databases:

• Internet• CD ROM

• Bibliographic databases:• Academic indexes.• Citation indexes.

• Numeric databases:• Census data.• Survey of Buying Power

• Directory databases:• Industry directories• SIC/NAICS

• Full-text databases:• Selected publications.

Creating an Internal Database

• A database is simply a collection of related information.

• For many companies, a computerized database containing information about customers and prospects has become an essential marketing tool.

• Creating an internal marketing secondary database built upon sales results and customer preferences can be a powerful marketing tool.

Keys to a Successful Internal Database

Organizations Must Create a Database

Management System

Database Users Must be Trained on How to

Retrieve Information and How to Manipulate the Data Using Database

Management Software

The Growing Importance of Internal Database Marketing

• Database Marketing– Is the creation of a large computerized file of

customers’ and potential customers’ profiles and purchase patterns.

– Is the fastest-growing use of internal database technology.

Uses of Database Marketing

• Evaluate sales territory.

• Identify most profitable and least profitable customers.

• Identify most profitable market segments and target efforts with greater efficiency and effectiveness.

Uses of Database Marketing

• Aim marketing efforts to those products, services, and segments that require the most support.

• Increase revenue through repackaging and re-pricing products for various market segments.

• Evaluate opportunities for offering new products or services.

• Identify products or services that are best-sellers or most profitable.

• Evaluate existing marketing programs.

Issues Involving Internal Databases

• Database Technologies– Database technologies continue to evolve. For example,

Fingerhut, a database firm, uses a Sun Microsystems parallel computer, whereas American Express relies on Thinking Machines Corporation’s supercomputers.

– Renting Internal Databases

– Some companies rent their internal databases to obtain extra income, although this can lead to ethical questions.

Issues Involving Internal Databases

• Published Secondary Data– Internal

• Published secondary information originating with the company includes documents such as annual reports, reports to stockholders, and product testing results perhaps made available to the news media.

• External

• Innumerable outside sources of secondary information also exist, principally in the forms of government departments and agencies that compile and publish summaries of business data.

Advantages of Secondary Data

• Secondary information may:• Help to clarify or redefine the definition of the

problem as part of the exploratory research process.• Actually provide a solution to the problem.• Provide primary data research method alternatives.• Alert the marketing researcher to potential problems

or difficulties.

• Secondary information may:• Provide necessary background information and

build creativity for the research report.

Limitations of Secondary Information

• Lack of Availability– For some research questions there are simply no available data.

For example, if Kraft General Foods wanted to evaluate the taste, texture, and color of three new gourmet brownie mixes, there are no secondary data that would answer these questions.

• Lack of Relevance– It is not uncommon for secondary data to be expressed in units or

measures that cannot be used by the researcher.

• Inaccuracy– Users of secondary data should always assess the accuracy of the

data. There are a number of potential sources of error when a researcher gathers, codes, analyzes, and presents data.

Evaluating Secondary Data

Guidelines for determining secondary data accuracy

Who collected the information?

What was the purpose of the study?

What information was collected?

When was the information collected?

How was the information obtained?

How consistent is the information with other information?

The Internet and the World Wide Web

• Internet– World-wide telecommunications network that

allows computers to access data, files, pictures and sound throughout the world.

• World Wide Web– Component of the Internet designed to make

transmission of text and images very easy.

Finding Secondary Data on the Internet

• Uniform Reference Locator (URL)– Internet address that identifies a specific location.– A typical Web address looks like the following:

http://www.microsoft.com

• Search Engines– Internet search directories to aid in locating topics

of interest and URLs.– An example is Yahoo at http://www.yahoo.com

Other Sources of Secondary Data

• Newsgroups on the Internet• Internet sites devoted to a specific topic where people can read

and post messages.

• Databases on CD ROM• A number of companies offer database packages on CD ROM

for personal computers.

• Geographic Information Systems• Computer-based system that uses secondary and/or primary

data to generate maps that visually display answers to research questions.

Information Management

Computerized databases, published secondary data, the Internet, and internal databases are

important parts of an organization’s information system. Intelligent decision making is always predicated on having good information. The

problem today is how to manage all the information available.

Decision Support Systems

• Decision Support System– An interactive, personalized MIS, designed to

be initiated and controlled by individual decision makers.

– Managers use decision support systems to conduct sales analyses, forecast sales, evaluate advertising, analyze product lines, and keep tabs on market trends and competitor analysis.

Decision Support Systems

Characteristics of a true DSS are as follows:

Interactive Flexible

Discovery Oriented

Easy to Learn and Use

Advantages of an Effective DSS

• Substantial Cost Savings

• Understanding of the Decision Environment is Increased

• Decision-Making Effectiveness is Upgraded

• Information Value is Improved