Secondary Data MKTG 3342 Fall 2008 Professor Edward Fox

Secondary Data - Overview Secondary data are pieces of information that have already been collected for a different purpose, but may be relevant to the research problems at hand. Primary data, in contrast, are survey, observation, or experimental data collected to address the problem currently under investigation.

Importance/Usefulness Secondary data are useful for addressing a number of research questions, for example: Secondary data are useful for addressing a number of research questions, for example: Estimating market potential Estimating market potential Analyzing competitors Analyzing competitors Sales forecasting Sales forecasting Assessing industry trends Assessing industry trends Alerting the manager to potential problems Alerting the manager to potential problems Providing preliminary information to guide subsequent primary data collection Providing preliminary information to guide subsequent primary data collection Hollywood stock exchange

Advantages of Secondary Data Low Cost Low Cost Less Effort Less Effort More Timely More Timely Some info is available only from secondary data sources; for example: Some info is available only from secondary data sources; for example: Market shares Market shares Industry data from trade associations Industry data from trade associations

Sources of Secondary Data There are two key sources of secondary data: The Company Itself (Internal Databases ) Other Organizations or Persons (External Databases)

Internal Databases Database Marketing Database Marketing Is the creation of large computerized files of customers’ and potential customers’ profiles and/or purchase patterns. Is the creation of large computerized files of customers’ and potential customers’ profiles and/or purchase patterns. Is the fastest-growing use of internal database technology. Is the fastest-growing use of internal database technology.

External Sources of Secondary Data Government publications – Census, Bureau of Labor Statistics, etc. Government publications – Census, Bureau of Labor Statistics, etc. Trade Associations - Newsletters, special reports, annual “state of the industry” reports, etc. Trade Associations - Newsletters, special reports, annual “state of the industry” reports, etc. Other publications - periodicals (e.g., WSJ, Fortune), annual reports, Moody’s, Dun & Bradstreet Other publications - periodicals (e.g., WSJ, Fortune), annual reports, Moody’s, Dun & Bradstreet Computer retrievable databases (syndicated) - Lexis/Nexis, scanner data Computer retrievable databases (syndicated) - Lexis/Nexis, scanner data Internet Internet

Computer Retrievable Sources of Secondary Data Surfing the web –Search Engines Surfing the web –Search Engines Newsgroups on the Internet Newsgroups on the Internet Internet sites devoted to a specific topic where people can read and post messages. Internet sites devoted to a specific topic where people can read and post messages. Databases Databases A number of companies offer database packages on DVD for personal computers or by subscription over the internet. A number of companies offer database packages on DVD for personal computers or by subscription over the internet. Cox Databases

Other Sources of Secondary Data Geographic Information Systems Geographic Information Systems Computer-based systems that use secondary and/or primary data to generate maps that visually display answers to research questions. Computer-based systems that use secondary and/or primary data to generate maps that visually display answers to research questions.

Some Useful Numbering Systems – SIC & UPC SIC (Standard Industrial Classification) is an uniform numbering system for classifying establishments according to their economic activities. Total economy is divided into 11 divisions (manufacturing/mining etc...) which are further divided into major groups and subgroups. Example: SIC (Standard Industrial Classification) is an uniform numbering system for classifying establishments according to their economic activities. Total economy is divided into 11 divisions (manufacturing/mining etc...) which are further divided into major groups and subgroups. Example: 57= Home Furniture, Furnishings 57= Home Furniture, Furnishings 571= Home Furniture and Furnishing Stores 571= Home Furniture and Furnishing Stores 5715= Furniture Stores 5715= Furniture Stores Government and several non-govt. industrial data are organized by SIC codes now being replaced by North American Industrial Classification Codes (NAICS) Government and several non-govt. industrial data are organized by SIC codes now being replaced by North American Industrial Classification Codes (NAICS) UPC: Numbering system used in consumer goods UPC: Numbering system used in consumer goods

SIC System for Classifying Retailers

Limitations of Secondary Information Lack of Availability 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. 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.

Limitations of Secondary Information Lack of Relevance Lack of Relevance May be measured in units that cannot be used by the researcher. May be measured in units that cannot be used by the researcher. May relate to a sample other than the intended target. May relate to a sample other than the intended target. May be outdated. May be outdated. Inaccuracy Inaccuracy 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. 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.

Summary of Key Points Secondary data are information previously gathered for a different purpose that may be relevant to the problem at hand. Secondary data are information previously gathered for a different purpose that may be relevant to the problem at hand. Secondary data can come from sources internal to the organization or external. Secondary data can come from sources internal to the organization or external. The internet has, in many ways, enabled the gathering of secondary data. The internet has, in many ways, enabled the gathering of secondary data. Secondary data are generally useful, low- cost, rapidly available sources of information. Secondary data are generally useful, low- cost, rapidly available sources of information. Always look for secondary data first Always look for secondary data first