King Fahd University of Petroleum & Minerals Department of Management and Marketing MKT 345 Marketing Research Dr. Alhassan G. Abdul-Muhmin Secondary Data Research Reference: Zikmund, Chapter 7

Learning Objectives At the end of the discussion you should be able to: 1.Define secondary data and distinguish it from primary data 2.Explain the advantages and disadvantages of secondary data 3.List and explain the various uses of secondary data in marketing research 4.Identify the possible internal sources of secondary data 5.Identify the possible external sources of secondary data generally, and specifically in Saudi Arabia

Secondary Data Data gathered and recorded by someone else prior to, and for a purpose other than the current research project. Usually historical and requires no direct access to respondents or subjects

Advantages of Secondary Data 1.Easy availability – Secondary is easily available from a wide variety of sources 2.Faster to collect – Compared to primary data, secondary data can generally be collected faster  suitable for projects with time constraints 3.Cheaper to collect – Secondary data is generally cheaper to collect than primary data

Disadvantages of Secondary Data 1.Currency - Available information may be outdated and not suitable for our needs 2.Suitability of Units of Measurement - Units of measurement may not match needs of the current project  Data conversion may be necessary 3.Suitability of Terminology - Terminology used to describe the data may be defined differently than needed for the current project 4.Lack of Control – Researcher has no control over accuracy of the data  Need for cross-checks and cross verification

Evaluation of Secondary Data Often secondary data needs to be evaluated to determine its suitability for the current project. Common evaluation Criteria 1.Applicability of the data to objectives of the current project in terms of: Relevance to current project’s problem definition Applicability of time period Applicability to relevant population Applicability of terminology and variable classifications Applicability of units of measurement 2.Accuracy of the data Possibility of bias Verification of accuracy of data collection Cross-validation from original source

Uses of Secondary Data 1.In exploratory research to understand the background and nature of marketing problems, define research problem, and formulate hypotheses for testing 2.Fact-finding (descriptive research) –Identification of industry characteristics –Identification of consumer behavior for a product category –Trend analysis –Environmental scanning

Using Secondary Data in Fact-Finding

Uses of Secondary Data 3.Model Building  e.g. 1.Estimating geographic market potentials 2.Forecasting  (a) environmental forecasting (b) sales forecasting 3.Analysis of Trade Areas and Sites 4.Database Marketing - marketing activities that are based on maintaining customer databases with customers' names, addresses, phone numbers, past purchases, demographic information, etc

Forecasting - Linear Trend Extrapolation

Forecasting - Nonlinear Trend Extrapolation

Forecasting - Regression

Contract Awards (t) = Permits Issued at t Oil Price at (t-1) –  R-square = 0.85 Contract Awards (t) = Permits Issued at (t-1) – 4347  R-square = 0.72

Sources of Secondary Data 1.Internal and proprietary sources 2.External sources 1.Producers of secondary data 2.Distributors of secondary data

Internal Sources of Secondary Data Accounting system, routine company documents, Salespeople’s call reports, Customer complaints, Customer service records, Warranty return cards, etc Often used in data mining projects (the use of computers to dig through volumes of data to discover patterns). Applications include: Market basket analysis - analyzing anonymous point- of-sale transactions to identify coinciding purchases or relationships between products purchased and other retail information. Customer discovery - data mining to discover customer segments (e.g. loyal vs. non-loyal) Sequence discovery - mining data to detect patterns in customer purchase sequences

External Sources - Producers 1.Publishers of books and periodicals 2.Government departments 3.Media 4.Trade associations 5.Commercial establishments  two types of which are: –Single-source data providers, and –Specialized data providers Examples of Types of Data Provided: –Market share data –Demographic and census updates –Consumer attitude and public opinion research –Consumption and purchase behavior data –Advertising research, etc

External Sources - Distributors 1.The Internet 2.Libraries 3.Commercial vendors

Selected Sources of Secondary Data in Saudi Arabia 1.Government Ministries and Departments  e.g. the Central Department of Statistics, Ministry of Planning collects and compiles data from most government departments 2.Chambers of Commerce 3.Saudi Arabian Monetary Agency (SAMA) – Banking and financial statistics 4.Annual reports of companies listed on the stock exchange 5.Commercial research suppliers, e.g. Amer Research, Pan-Arab Research Center.