King Fahd University of Petroleum

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King Fahd University of Petroleum
MineralsDepartment of Management and
MarketingMKT 345 Marketing ResearchDr.
Alhassan G. Abdul-Muhmin

• Secondary Data Research Reference Zikmund,
  Chapter 7

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Learning Objectives

• At the end of the discussion you should be able
  to
• Define secondary data and distinguish it from
  primary data
• Explain the advantages and disadvantages of
  secondary data
• List and explain the various uses of secondary
  data in marketing research
• Identify the possible internal sources of
  secondary data
• Identify the possible external sources of
  secondary data generally, and specifically in
  Saudi Arabia

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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

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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

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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 Currency - Available information may be outdated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

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Evaluation of Secondary Data

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

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Uses of Secondary Data

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

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Using Secondary Data in Fact-Finding
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Using Secondary Data in Fact-Finding
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Uses of Secondary Data

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

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Forecasting - Linear Trend Extrapolation
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Forecasting - Nonlinear Trend Extrapolation
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Forecasting - Regression
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Forecasting - Regression

• Contract Awards (t) 0.351 Permits Issued at t-1
  1477 Oil Price at (t-1) 35614
• R-square 0.85
• Contract Awards (t) 0.191 Permits Issued at
  (t-1) 4347
• R-square 0.72

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Sources of Secondary Data

1. Internal and proprietary sources
2. External sources
3. Producers of secondary data
4. Distributors of secondary data

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Internal Sources of Secondary Data

• Accounting system, routine company documents,
  Salespeoples 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

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External Sources - Producers

• Publishers of books and periodicals
• Government departments
• Media
• Trade associations
• 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

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External Sources - Distributors

• The Internet
• Libraries
• Commercial vendors

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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.