CHAPTER 4

EXPLORATORY RESEARCH DESIGN: SECONDARY DATA

OPENING QUESTIONS
1.
Why are secondary data important? How do we distinguish secondary data from primary
data?
2.
What are the advantages and disadvantages of secondary data?
3.
How should secondary data be evaluated to determine their usefulness?
4.
What are the different sources of secondary data, including internal sources and external
sources?
5.
What is database marketing? How does it make use of secondary data?
6.
How can published secondary data be classified?
7.
How can computerized databases be classified?
8.
How do we identify and classify the sources of secondary data useful in international
marketing research?
9.
How can technology and what ethical issues are involved in the use of secondary data?
AUTHOR'S NOTES: CHAPTER FOCUS
This chapter provides an overview of secondary data. Secondary data are defined and
their advantages, disadvantages, and evaluations discussed. A classification of secondary data is
presented. Internal sources, published external sources, and computerized databases are
discussed. Applications of secondary data in the context of a buying power index and computer
mapping are provided. The several classifications of secondary data, presented in Figures 4.3
through 4.6, are unique to this book. In addition, a focus on international marketing research,
technology, and ethics is placed at the end of this chapter.
This chapter could be taught by focusing on the opening questions sequentially. Greater
emphasis could be placed on the nature of secondary data (Opening Questions 1 and 2), criteria
for the evaluation of secondary data (Opening Question 3), internal data and database marketing
(Opening Question 5), published external sources, and computerized databases (Opening
Questions 6 and 7). The material on international marketing research (Opening Question 8), and
ethics in marketing research (Opening Question 9) can be discussed as well.
CHAPTER OUTLINE
1.
2.
3.
4.
5.

6.

Overview
Primary Versus Secondary Data
Advantages and Uses of Secondary Data
Disadvantages of Secondary Data
Criteria for Evaluating Secondary Data
i. Specifications: Methodology Used to Collect the Data
ii. Error: Accuracy of the Data
iii. Currency: When the Data Were Collected
iv. Objective(s): The Purpose for the Study
v. Nature: The Content of the Data
vi. Dependability: Overall, How Dependable Are the Data
Classification of Secondary Data
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7.
8.

9.

10.
11.
12.
13.
14.
15.
16.
17.

Internal Secondary Data and Database Marketing

External Secondary Data: Published Sources
i. General Business Data
a. Guides
b. Indexes and Bibliographies
c. Directories
d. Nongovernmental Statistical Data
ii. Government Sources
a. Census Data
b. Other Government Publications
Computerized Databases
i. Classification of Computerized Databases
ii. On-line Databases
iii. Internet Databases
iv. Offline Databases
a. Bibliographic Databases
b. Numeric Databases
c. Full-text Databases
d. Directory Databases
e. Special Purpose Databases
v. Directories of Databases
Combining Internal and External Secondary Data
i. Geo-Demographic Coding
ii. Geo-Visual Databases
Summary Illustration Using the Opening Vignette
International Marketing Research
Technology and Marketing Research
Ethics in Marketing Research
Summary
Key Terms and Concepts
Acronyms

TEACHING SUGGESTIONS
Opening Question 1
* Discuss the nature of secondary data.
Begin by defining secondary data as data, which have already been collected for purposes
other than the problem at hand. The data are often found internally and also externally from
published materials, computerized databases, or from syndicated services. Finally, note that
secondary data are characterized as easily available and relatively inexpensive to obtain.
Figure 4.2 provides a framework for discussing the types of secondary data.
* Describe the scope of secondary data.
Note that secondary data can cover a broad range of factors that affect the problem at
hand. It does not always fit the specific problem at hand, but can be useful in developing an
52

approach to the problem and providing a comprehensive understanding of the problem

environment.
Begin the class by having students suggest sources of secondary data with which they are
familiar and keep a list on the board. Then proceed to discuss the sources outlined in the text and
see how many sources they overlooked
Opening Question 2
* Identify the Advantages of secondary data.
1.
2.
3.
4.
5.
6.

Secondary data can help you:

Identify the problem.
Better define the problem.
Develop an approach to the problem.
Formulate an appropriate research design (for example, by identifying the key variables).
Answer certain research questions and test some hypotheses.
Interpret primary data more insightfully.

Examination of available secondary data is a prerequisite to the collection of primary data.

Proceed to primary data only when the secondary data sources have been exhausted or yield
marginal returns.
* Identify the disadvantages of Secondary data.
Because secondary data have been collected for purposes other than the problem at hand,
their usefulness to the current problem may be limited in several important ways, including
relevance and accuracy.

The objectives, nature, and methods used to collect the secondary data may not be
appropriate to the present situation.
Secondary data may be lacking in accuracy, or they may not be completely current
or dependable.

Tables 4.1 and 4.2 will be useful when covering this information.
Opening Question 3
* Explain the criteria for evaluating the quality of secondary data with an example.
Review the following criteria when evaluating the suitability and reliability of secondary
data. Your example should allow the students to address the six criteria below.
1.
The purpose for which data were collected
2.
The content of the data
3.
Methodology used to collect the data
4.
When the data were collected
5.
Accuracy of data
6.
The overall dependability of the data

53

Opening Question 4
*

List the various internal sources of secondary data and explain their benefits to the
researcher.

Begin by noting that internal sources can supply some of the most vital data for research.
The information generated by the corporations daily business operations can represent a wealth
of data useful to the researcher and should be the starting point of a project. It offers the
advantages of being proprietary to the company and is available at a low cost relative to outside
suppliers.
As an example, discuss sales data. Sales data are valuable information for any marketing
project because they show the exact results of a program, salesperson, or sales region. Actual
costs allow the researcher to estimate costs for a research study or project costs for a marketing
program. Detailed information can be gathered on precise questions, for example, the percentage
of sales to industry verses government or sales broken out by company accounts. With planning,
sales data can be recorded in the companys management information system to allow for optimal
use by analysts.
*

Describe the importance of the government census data as a major source of

secondary data.

Note that the U.S. Bureau of the Census is the worlds largest source of statistics. Census
data can provide important information on demographics, manufacturers, retail trade agriculture,
transportation and so on. Moreover, stress that the quality of census data is very high, making it a
very reliable and useful source.
If students filled out the 2000 Census, ask them to relate their impressions of the form and
the information it sought. If you have a copy of the long form, review it with students and
speculate how different information sought in the form could be useful to a marketing researcher.
Opening Question 5
*

Comment on the growing use of computer databases in marketing research.

As an introduction, mention that the use of databases has increased phenomenally due to
the rocketing sales of PCs and due to the increase in the number of vendors providing such
databases. Both on-line and off-line databases are available consisting of bibliographic, numeric,
full-text, directory and specialized databases. In addition, directories of databases exist to aid in
locating the proper information. See if the students can find two databases of secondary data
other than the ones listed in the book.
Figure 4.5 classifies the types of computer databases.

Opening Question 6
* Discuss the chore of locating published secondary data that is appropriate for a
researcher.
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It should be easy to convince students that published data abound but that the key is
knowing where to look for it. Both government and non-government published sources exist, as
well as guides, directories, and indexes to help locate the necessary information. The difficulty is
either locating the right directory or index to guide you or understanding the classification system
used. A good librarian is a real advantage and can cut the search time remarkably. You may want
to bring a copy of a directory or index to show how complicated they can be to use.
Figure 4.5 may be used here as a framework for your discussion on this topic.
Opening Question 7
*

Explain how computerized databases can be classified.

Knowing how computerized databases are classified can help the researcher narrow the
search. Computerized databases are classified in terms of how they are distributed as on-line,
Internet, or off-line, as shown in Figure 4.5.
As a further classification, databases, whether they are on-line, Internet, or off-line, can
vary in terms of nature and content. As shown in Figure 4.5, there are five major types of
databases: bibliographic numeric, full-text, directory, or special-purpose databases.
Opening Question 8
*

Examine the sources of international market information.

Important government sources are:

the Department of Commerce
the Agency for International Development
the Small Business Administration
the Export-Import Bank of the United States
the Department of Agriculture
the Department of State
the Department of Labor
the Port Authority of New York and New Jersey

The Department of Commerce offers not only a number of publications but also a variety
of other services, such as the foreign buyer program, matchmaker events, trade missions, export
contact list service, the foreign commercial service, and custom statistical service for exporters.

Nongovernmental organizations:
the United Nations
the Organization for Economic Cooperation and Development (OECD)
the International Monetary Fund (IMF)
the World Bank, International Chambers of Commerce
the Commission of the European Community to the United States
the Japanese External Trade Organization (JETRO)
Figure 4.6 provides a classification of international information sources.
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Opening Question 9
*

Discuss the role of new information technologies in collecting secondary data.

New information technologies have begun and will continue to revolutionize the ways in
which marketing research is undertaken. Innovations will change the way in which both
secondary and primary research is conducted. Technological advances have not only facilitated
the establishment of sophisticated internal databases, but have enabled firms to collect primary
data using creative promotions and automated systems. The Pepsi Cola example can be used
here.
* Discuss the ethical situations pertaining to secondary data.
1.
2.
3.
4.

Note: the four ethical issues that are the most pertinent are:
the needless collection of primary data when the problem can be addressed based only on
secondary data
limiting the research to only secondary data when primary data are needed to answer the
research question
the use of secondary data that are not relevant or applicable to the research problem
the use of secondary data that have been gathered through morally questionable means

Internet Emphasis
* Explain the World Wide Web as an on-line source of secondary data.
The search for secondary data is facilitated by some generalist search engines like Yahoo!
or Alta Vista, which require only some key words to get hundreds of sites related to one subject.
One can also go directly to the Web site of some traditional suppliers of secondary data. Large
organizations have intranets, which greatly facilitate the search for access to internal secondary
data. Organizations, like the New York Times, conducting business on the Internet have a natural
advantage in building large customer databases and implementing database marketing programs.
American business information can be obtained by visiting various business related sites
that provide sales leads and mailing lists, business profiles and credit ratings. Several US
government sources can be reached from FedWorld (http://www.fedworld.gov). The US
Department of commerce can be reached at http://www.doc.gov. The Bureau of Census
information can be reached via the Department of Commerce (http://www.doc.gov), or directly at
http://www.census.gov.

BE AN MR! AND BE A DM!

It should be noted that a variety of answers are appropriate. The ones given here are merely illustrative.
Be an MR!: Nike
A number of start-ups have jumped on the endorsement bandwagon, including Priceline.com with William
Shatner, eStyle with Cindy Crawford and online gift currency company Flooz.com Inc. with Whoopi

56

Goldberg. Flooz co-founder and CEO Robert Levitan says he's seen brand awareness jump from 7 to 64
percent since bringing Goldberg aboard a couple years ago.
- Time series data of sales before and after Nike started using NBA stars to endorse. Comparison of the
Post-Jordan and the Pre-Jordan era.
- Sales revenue versus percentage of the marketing budget spent on endorsement type advertising
Be a DM!: Nike
If the above secondary data reveals a strong positive correlation between endorsements and sales, I
would continue such endorsements.
Be a DM!: Home Depot
-Currently home depot operates under the assumption that men shop for home improvement products
and services.
-If it has to appeal to the women consumers it will have to reposition itself to appeal to that segment.
-Home depot has to do market research to find out what the qualities valued by women customers in
home improvement products and services.
-Home Depot may have to redesign the layout of its stores to make them friendlier to women shoppers.
Be an MR!: Home Depot
A detailed description given at www.gallup.com has been edited for the relevant details.
The Sampling Issue
It is Gallups goal in selecting samples to allow every adult American an equal chance of falling into the
sample. How that is done, of course, is the key to the success or failure of the process.
Selecting a Random Sample
When setting out to conduct a national opinion poll, the first thing Gallup does is select a place where all
or most Americans are equally likely to be found. That wouldnt be a shopping mall, or a grocery store,
an office building, a hotel, or a baseball game. The place nearly all adult Americans are most likely to be
found is in their home, so, reaching people at home is the starting place for almost all national surveys.
Gallup proceeds with several steps in putting together its poll with the objective of letting every American
household, and every American adult, have an equal chance of falling into the sample.
First we clearly identify and describe the population that a given poll is attempting to represent.
Next, we choose or design a method which will enable us to sample our target population
randomly.
The Number Of Interviews Or Sample Size Required
The typical sample size for a Gallup poll which is designed to represent this general population is 1,000
national adults. This sample size is more than adequate to ensure that the error in percentage estimates is
kept to no more than five percent.
The Interview Itself
Once the computer has selected a phone number for inclusion into a sample, Gallup goes to extensive
lengths to try to make contact with an adult American living in that household. In many instances, there is
no answer or the number is busy on the first call. Instead of forgetting that number and going on to the
next, Gallup typically stores the number in the computer where it comes back up to be recalled a few
hours later, and then to be recalled again on subsequent nights of the survey period. This procedure
57

corrects for a possible bias which could occur in if we included interviews only with people who
answered the phone the first time we called their number.
Conducting the Interview
Most Gallup interviews are conducted by telephone from Gallups regional interviewing centers around
the country. Trained interviewers use computer assisted telephone interviewing (CATI) technology which
brings the survey questions up on a computer monitor and allows questionnaires to be tailored to the
specific responses given by the individual being interviewed.
Once the data have been weighted, the results are tabulated by computer programs which not only show
how the total sample responded to each question, but also break out the sample by relevant variables.
Interpreting the Results
Gallup generally provides written analysis of our own polling data, and also provide ample opportunity
for the press, other pollsters, students, professors and the general public to draw their own conclusions
about what the data mean. The results to all Gallup surveys are in the public domain once they have
been publicly released.
Thus the quality of data generated by Gallup is very high.
Be a DM!: Apple
Database Marketing can be used to:
Segment customers
Identify customer priorities, lifestyles and purchase characteristics
Do targeted marketing
Cross selling of products
Be an MR!: Apple
Apples marketing strategy:
- Apple retail stores to reach out to household PC market
- Attempt to penetrate the enterprise segment
- Apple is showing a prudent strategy of picking fights in verticals and niches where it stands a good
chance of success, such as film and television production industries.
- Concentration in advertising, graphic design and apparel design industries
- Focus on outer fringe of Windows users who are far more ambivalent about Windows and potentially
more receptive to Apple's marketing messages.
The internally available data would include sales to households, type of outlets, products purchases,
geographical region, and time period. Externally available data would include demographics and
psychographics.

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Be an MR!: Subway
Integrated online marketing campaign with Pepsi and yahoo
Johnson Gross Field Inc.s promotional business focuses on the kids marketing program of Subway
Restaurants.
Subway website
Sponsoring programs, events and causes like American Heart Association

PRIZM by Claritas (www.claritas.com) divides the U.S. consumer into 15 different groups and
62 different segments such as Midtown Mix, Urban Cores, and Elite Suburbs. These groups can
be useful for segmentation and for identifying locations with a high concentration of potential
Subway customers.

Be a DM!: Subway
Subway targets heath conscious customers.
The Geo-Demographic information can be used to find out:
Areas of higher concentration of target customer base
Areas where the chain does not have a sizable presence
Areas where company have registered fastest growth in recent past
EXPERIENTIAL LEARNING
U.S. Census Bureau
1.
Find the population clocks on the home page for the U.S. Census Bureau. What is the
current population estimate for the US?
294, 217, 612 for October 2004
For the World?
6, 391,481,204 for October 2004
2. Find the state and county quick facts on the home page for the US Census Bureau. Compare
your home states population percentage change from 1990 to 2000 with that of the US.. Which
grew faster?
Note: Answers will vary according to state of residence. The following answer is for Texas:
My home state is Texas and the population percentage from 1990 grew by 22.8%. The
U.S. population grew 13.1% from 1990. Therefore, my home state grew faster than the
U.S. population.
3. Review the table and add the numbers for 1-person households, and Nonfamily households
to compute the number of singles without children.
Note: Answers will vary according to zip code. The following answer is for the 76109 zip code
in Fort Worth, Texas:

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(a) The number of 1-person households is 17,240 and Non-family households are 4,290.
The sum of these two figures results in the total number of singles without children.
(b) There are currently more females in my zip code.
Quirks Marketing Research Review
This exercise is designed to give the students some hands-on experience with a popular source of
secondary data: Quirks Marketing Research Review. It also gives them an appreciation of the
complexities involved in conducting international marketing research. The specific answers will
depend upon the article selected. However, the following general points should be reflected.
1.
A variety of interests may be mentioned.
2.
Reliable international Secondary data are hard to get.
3.
The environmental context of the country in which the research is conducted should be
taken into account. This includes the social, cultural, economic, technological, legal,
and marketing environment.
WHAT WOULD YOU DO?
It should be noted that a variety of answers are appropriate. The ones given here are merely illustrative.
The Marketing Research Decision
1. A & B
2. Census data is a trusted source of data for demographic patterns and details. It will give a
sense of the big picture of the total customer pool in terms of age, gender, ethnicity, etc. It will
also give an idea about time series demographic trends, which is important to decisions like
target segment, pricing, tastes etc. Apparel industry database will give an idea about changing
trends and pulses within the specific industry.
The Marketing Management Decision
1. A, B, C & E
2. Tommy Hilfiger has the image of a stylish trendy and expensive brand. The exclusivity given
by price is in part the reason why it attracts its present customer base, so lowering the price
for existing lines might dilute the brand image. At the same time, the changing demographics
and recession has brought into existence an ever growing cost conscious low income
customer base. To appeal to this market the company should launch alternate brands through
new channels. Mixing the channel for various brands might dilute the brand and at the same
time might not reach out to the appropriate audience.
REVIEW QUESTIONS
1.

The differences between primary and secondary data are that primary data are originated
by the researcher for the specific purpose of addressing the problem at hand while
secondary data are data that have already been collected for purposes other
than the
problem at hand.
2.
It is important to obtain secondary data before primary data because secondary data, as
compared to primary data, are easily available, inexpensive, and retrieving secondary data
60

3.
4.
5.

6.
7.
8.
9.

10.

11.

12.

requires a short amount of time. In addition, secondary data generally provide valuable
insights for collecting primary data.
The advantages of secondary data are that secondary data are easily accessible, less
expensive, and less time consuming to obtain than primary data.
The disadvantages of secondary data are that their usefulness to the current problem may
be limited in relevance and accuracy.
The criteria to be used when evaluating secondary data are: to examine the methodology
used to collect the data to identify possible sources of bias in the data, to determine
whether or not the information is accurate enough for the present purposes, to determine
whether or not the data is current enough for the present purposes, to determine why the
data was collected in the first place, to determine the nature of the data, and to determine
the overall dependability of the data.
The difference between internal and external secondary data is that internal data are those
available within the organization for which the research is being conducted while external
data are those generated by sources outside the organization.
The various sources of published secondary data include business guides, directories,
indexes, nongovernmental statistical data, government sources, computerized databases,
and syndicated publications.
The different forms of computerized databases are Internet, on-line or off-line databases
that can be further classified as bibliographic, numeric, full-text, directory, or specialized
databases.
The advantages of computerized databases are that the data are current and up-to-date;
the search process is more comprehensive, much quicker, and greatly simplified; the cost
of accessing these databases is low; and it is convenient and easy to access this data with a
personal computer fitted with an appropriate communication device such as a modem or a
communication network.
The usefulness of secondary data can be greatly enhanced when internally generated data
are merged with data obtained from external sources. By using both internal and external
secondary sources, marketing researchers can overlay demographic, economic, or business
statistics on proprietary customer files. These data can then be used to develop market
assessments or profiles of various customer groups, or simply to educate the sales force.
The combination of internal and external data results in inexpensive and valuable
information that can be used for a variety of purposes, including database marketing.
Geo-demographic coding involves merging internal customer data with external
geographic, demographic, and lifestyle data on the same customers. Consider a local
cable television operator who maintains a computerized database of its cable subscribers.
This internal database contains customer information on the number of cable services
subscribed to, the length of time on service, the changes in subscribed services over time,
and the billing history for the past three years. To expand the internal customer file, we
can review several external sources of geographic, demographic, and lifestyle data and
then select the Claritas Corporation.
Geo-visual databases are created by combining internal customer databases with
geographic data from the Census Bureau and making use of appropriate computer
mapping software. The Census Bureau has introduced a geo-visual product called TIGER
(Topologically Integrated Geographic Encoding and Referencing), which provides a digital
street map of the entire United States. These mapping files contain data on street
locations, highways, railroads, pipeline, power lines, and airports.

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13.

Database marketing involves using computers to capture and track customer profiles and
purchase detail. For many companies, the first step in creating a database is to transfer
raw sales information, such as that found on sales call reports or invoices, to a
microcomputer. This is augmented with demographic and psychographic information
about the customers obtained from secondary sources. Several companies in this business,
including R. L. Polk, Donnelley, Metromail, Smart Names, Select & Save, and others,
have compiled household lists, which include names, addresses, and a great deal of
individual-specific data. This augmented information can then be analyzed in terms of a
customers activity over the life of the business relationship.

PROBLEMS
1.
2.
3.
4.
5.
6.
7.

Do not expect the two estimates to be identical. Research methods, databases and
researcher judgments will all vary.
The e-commerce sales figures should be given in the aggregate for the USA and also
broken down by major classifications. The four estimates do not agree because of
differences in methodology used by each source.
Students should obtain the relevant information about the firm using both internal and
external sources available on the Internet. The usefulness for targeting the household
computer market should be discussed.
A lot of information is given on the NAICS Association Web site at www.naics.com.
Students should be encouraged to summarize this information.
A variety of information about firms is available from D&B. This includes variables such
as market share, corporate location, industry classification, and employment size.
A wide variety of information can be obtained. Students should show the relevance of
each type of information to the formulation of domestic marketing strategy.
Students should first select appropriate criteria (e.g., population of elderly, amount of
wealth of the elderly) and then rank the states on that basis. Top six States for marketing
products to the elderly: Alabama, Alaska, Arizona, Arkansas, California, and Colorado.

GROUP DISCUSSIONS
1.
Census data is extremely useful to marketers since it provides a wide variety of data
available in many forms. The quality of the data is very high and it is often broken out in
specific detail. Finally, because it is a census, as opposed to a sample, sampling error is
minimal.
The limitations of census data include the fact that the volume of data available makes
finding the right information difficult. Much time may be spent just locating the figures
needed. Furthermore, the data are of a general nature and may not provide the specific
information needed.
2.
Issues which students can address include the advantages of computerized databases:
current and up to date information, efficiency of literature searches, low cost, and
convenience and ease of use. Additionally, it underscores the need for businesspeople to
be computer literate.

62