Marketing Research - Chapter 6: Collection of Secondary Data

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Marketing Research - Chapter 6: Collection of Secondary Data

Learning Outcomes:

• Differentiate between primary and secondary data.
• Identify different types of secondary data.
• Perform a secondary data analysis.
• Evaluate the reliability of external secondary data.

Introduction:

• Data collection starts after evaluating the economic validity and practical feasibility of the research project.
• The purpose of research is to collect data that can be processed into information for marketing management decision-making.
• Data can be found within the organization (internal secondary data) or through outside sources (external secondary data).
• Using secondary data optimally saves time and money in a research project.

Steps for Collecting Secondary Data:

1. Specify data requirements.
2. Determine data obtainable from internal sources.
3. Specify format for reporting.
4. Seek external sources of secondary data:
   • Libraries (use guides and compendiums of statistics).
   • Trade publications.
   • Data service directories.
   • Trade associations.
5. Obtain secondary data.
6. Scrutinize validity of data:
   • Evaluate collecting organization.
   • Consider objectives of the original study.
   • Appraise:
     • Methods employed.
     • Definitions and classifications.
     • Currency.
7. Identify data that must be obtained from primary sources instead.

Secondary Data:

• Primary data: Collected specifically to solve the marketing problem or opportunity using surveys, observation, experimentation, focus groups, etc.
• Secondary data: Data that already exists, previously gathered for some other purpose.
• Examples of secondary data sources: sales records, cost information, distributor’s reports, etc.
• The first step is to determine if secondary data already exists that can shed light on the problem or solve it.
• Secondary data saves time and money, as collecting primary data is time-consuming and expensive.

Uses of Secondary Data:

• Formulating the decision-making problem.
• Suggesting methods and types of data meeting information needs.
• Interpreting and evaluating primary data.
• Monitoring the enterprise’s external environment.
• Providing the basis for final decision-making.
• In longitudinal research studies.

Problems Associated with Secondary Data:

• Tracing the desired data from numerous sources.
• Processing or adapting the data to suit the problem situation.
• Determining the accuracy and reliability of the data.

Advantages of Secondary Data:

• Collected with less effort than primary data.
• Enhances the collection of primary data.
• Can be more accurate than primary data, especially for past events.
• Provides comparative data for a more illuminating interpretation of primary data.

Disadvantages of Secondary Data:

• Often does not apply to the specific problem being investigated.
• Accuracy is questionable.
• Dates quickly in a dynamic environment.
• Different sources define and classify terms differently.
• Secondary data uses different measures.
• Secondary publications contain only data considered relevant by the author.

External Secondary Data:

• Should be obtained from original publications for information about the data collection method, scope of the survey, and sample size used.
• Advantages of using the original publication:
  • Helps the researcher evaluate the reliability of the data.
  • Contains detailed descriptions of terms and concepts.
  • Eliminates possible errors when transferring data from the original publication to the secondary publication.

Types of Secondary Data:

• Classified in terms of its source: internal & external data.
• Internal secondary data: Collected by the enterprise in the course of its normal business transactions (e.g., invoices, sales reports, financial analyses, research surveys previously conducted).
• It is not collected to solve a specific marketing problem.
• External data: Found in sources outside the enterprise, in reports and bulletins published by government departments, semi-government bodies, associations, computerized bibliographies, syndicated services, and other published sources.

Categorization of External Data:

• Syndicated data: Research organizations that collect and sell common data standardized to meet information needs shared by a group of clients (e.g., ACNielsen South Africa and Rhode and Associates).
• Pooled data: Data shared by interested organizations, providing standardized data to an independent organization which processes and redistributes the information to participating parties (e.g., the National Association of Automobile Manufacturers in South Africa (NAAMSA)).
• Other published sources: General business and government data published in books, periodicals, journals, newspapers, magazines, reports, and trade literature (e.g., the Journal for Marketing Research).

Databases:

• A database is a collection of interrelated data arranged and organized logically, stored for future use.
• Databases can be in print (paper-based) or computerized format.
• Advantages of computerized databases:
  • Data is easier to update.
  • Computers are used as the primary production technology.
  • The search process is simpler.
  • The cost for searching is relatively low.
  • Access to the data is convenient via a personal computer.
• Computerized databases are classified as online, internet, and offline.
• Databases are further classified by information contained: bibliographic, numeric, full text, directory, and special purpose.

Computerized Databases Classification:

• Online
• Internet
• Offline

According to the information contained:

• Bibliographic databases
• Numeric databases
• Full-text databases
• Directory databases
• Special-purpose Databases

Evaluation of Secondary Data:

• Researchers may not always know how reliable secondary data is.
• It must be evaluated in terms of quality, content, usability, presentation, and cost.
• An important element in evaluating secondary data is the researcher’s judgment and logic.

Evaluation of Secondary Data (cont.):

Researchers and users should consider:

• Purpose: Data were not gathered for the immediate study but for some other purpose.
• Accuracy: Researchers need to keep in mind what was actually measured and assess the generalization of the data.
• Consistency: Researchers should seek multiple sources of the same data to ensure consistency.
• Credibility: Researchers should always question the credibility of the source.
• Methodology: The quality of the data depends on the methodology used.
• Bias: Researchers must try to determine the reason why the data was collected.
• Currency: Even well-collected data may be useless if it is very old.

Online Computer Searches:

• The internet is a network of computers linking computers into an information superhighway, a useful tool for marketing research.
• Browsing: Following links from one site to another (e.g., www.mywebsite.com).
• Search engines: Web users find information using a search engine (e.g., Google).
• Subject directories: Lists or indexes that list websites in categories (e.g., Yahoo).

Online Computer Searches (cont.):

• Mailing lists: Most claim to be private but some can be accessed using resources like Lsoft.
• Virtual reference libraries and bookshops: Researchers can consult for secondary data from online and e-published resources (e.g., Amazon).
• Social media: A huge amount of information for exploratory research (e.g., Facebook).
• The same principles for evaluating printed secondary data apply to information found on the Internet.

Summary:

• Secondary data is data that already exists and includes all data not collected specifically for solving a particular marketing problem.
• Secondary data is sufficient for decision-making in some cases, especially for elementary marketing problems such as determining the market potential of a product.
• If there is insufficient secondary data to solve the problem, primary data is collected through a formal marketing research survey.