Secondary Data, Databases, the Internet, and Decision Support Systems CHAPTER four Copyright © 2000 South-Western College Publishing Co.

Learning Objectives 1. To understand how firms create an internal database. 2. To become familiar with the growing popularity of firms using their websites to build a database. 3. To learn about data mining. 4. To distinguish between primary and secondary data and understand the advantages and disadvantages of each.

Learning Objectives 5. To understand the role of the Internet in obtaining secondary data. 6. To learn the nature of decision support systems.

Creating An Internal Database a collection of related information To understand how firms create an internal database. THE NATURE OF SECONDARY DATA Secondary data: Information that has been gathered and only might be relevant to the problem at hand. Primary Data: Survey, observation, or experiment data collected to solve a particular problem. Creating An Internal Database a collection of related information

The Growing Importance of Internal Database Marketing To understand how firms create an internal database. THE NATURE OF SECONDARY DATA The Growing Importance of Internal Database Marketing A large computerized file of customer and purchase patterns. Internal Databases as Collective Memory Banks Internal Databases Can Even Be Created From Conversations

Web Site Databases - A Marketer’s Dream Web Retailing Web Advertising To become familiar with using Web sites to build a database. THE NATURE OF SECONDARY DATA Web Site Databases - A Marketer’s Dream Web Retailing Web Advertising Using Cookies: A text file on a user’s computer in order to identify them when he or she revisits the Web site. Data Mining Statistical software to discover non-obvious patterns hidden in a database.

Data mining uses in marketing: Computer acquisition Customer retention To learn about data mining. THE NATURE OF SECONDARY DATA Data mining uses in marketing: Computer acquisition Customer retention Customer abandonment Market basket analysis

External: government, trade associations To distinguish between primary and secondary data. PUBLISHED SECONDARY DATA Internal: annual reports, reports to stockholders, product testing results External: government, trade associations Advantages of Secondary Data 1. May help clarify or redefine the definition of the problem as part of the exploratory research process. 2. May provide a solution to the problem. 3. May provide primary data research method alternatives.

Limitations of Secondary Data Lack of Availability Lack of Relevance To distinguish between primary and secondary data. PUBLISHED SECONDARY DATA 4. May alert the marketing researcher to potential problems or difficulties. 5. May provide necessary background information and build creativity for the research report. Limitations of Secondary Data Lack of Availability Lack of Relevance Inaccuracy

Guidelines for determining secondary data accuracy: To distinguish between primary and secondary data. PUBLISHED SECONDARY DATA Guidelines for determining secondary data accuracy: 1. Who gathered the data? 2. What was the purpose of the data? 3. What information was collected? 4. When was the information collected? 5. How was the information collected? 6. Is the information consistent with other information? Insufficient data

Finding Secondary Data on the Internet Search Engines To understand the role of the Internet in obtaining secondary data. THE NEW AGE OF SECONDARY INFORRMATION: THE INTERNET AND WORLD WIDE WEB Finding Secondary Data on the Internet Search Engines Use search engine Enter search request Click on “search” button View list of sites that meets your criteria Look at the number of sites listed

There are 70 federal agencies that publish data Statistical Universe To understand the role of the Internet in obtaining secondary data. FINDING FEDERAL GOVERNMENT DATA ON THE INTERNET There are 70 federal agencies that publish data Statistical Universe FEDSTATS White House Briefing Room Internet Discussion Groups and Special Interest Groups as Sources of Secondary Data Newsgroups: to focus on a particular topic

BusinessUSA: 10 million businesses To understand the role of the Internet in obtaining secondary data. DATABASES ON CD-ROM BusinessUSA: 10 million businesses HouseholdsUSA: 100 million households Physicians & Surgeons: 575,000 physicians Big Businesses: 177,000 top firms Manufacturers: 612,000 manufacturers Small Business Owners: 4.5 million Geographic Information Systems (GIS) a demographic database, digitized maps, a computer, and software to add corporate data to the mix.

Information Management To learn the nature of decision support systems. DATABASES ON CD-ROM Information Management A system for capturing, processing, and storing information so that it can be readily found and retrieved. Decision Support Systems (DSS) 1. Interactive 2. Flexible 3. Discovery orientated 4. Easy to learn and use Using DSS

A Decision Support System Figure 4.2 A Decision Support System DATABASES ON CD-ROM

1. Substantial cost savings. To learn the nature of decision support systems. DATABASES ON CD-ROM A Move Toward DSS 1. Substantial cost savings. 2. Understanding of the decision environment has increased. 3. Decision-making effectiveness is upgraded. 4. Information value is improved.

The End Copyright © 2000 South-Western College Publishing Co.