1. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTERCHAPTERCHAPTERCHAPTER 1234 0001 897251 00000 4 Strategic Information Management: Secondary Data Sources 4-2

3. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Value of Secondary Data  Customer-volunteered information (customer knowledge information) can be captured from chat sessions, e-mail comments, customer usability labs, and electronic customer panels and councils.  It’s readily available!  It’s highly valid!  It’s relatively inexpensive, if it costs anything at all! 4-3

4. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Role of Secondary Data in MR Secondary data: Data that have already been collected for a purpose other than the current study. In 2000, secondary data supported the majority of marketing research due to giant expansion in databases and other computerized informational sources.

5. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Advantages  Time savings  Relevance  Availability  Can be obtained in a short period of time  Low cost  Accessibility  Complements primary data

6. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Research Realities: Where To Find It 1.The product or service must include unique demographic information that is updated regularly. 2.The information must be available to anyone willing to pay for it. 3.The information musts extend beyond a single state, except for California. 4.The product or service must be at least one year old. 5.The provider must offer a high level of customer service. American Demographics published a list of the “Best 100 Sources for Marketing Information.” It bases its selections on:

7. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Arbitron Company Bureau of Labor Statistics Bureau of Transportation Statistics Census Bureau The Conference Board Donnelley Marketing Dun & Bradstreet Hispanic Market Connections, Inc. Immigration and Naturalization Service Internal Revenue Service Maritz Marketing Research, Inc. Metropolitan Life Insurance Co. Nielsen Media Research J.D. Power & Associates Roper Starch Worldwide Social Security Administration SRI International Teenage Research Unlimited Total Research Corporation U.S. Postal Service The entire list of 100 sources may be obtained from the January 1995 issue. Here are 20 of the top 100: Best 100 Sources for Marketing Information

8. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Information Venues  CD-ROM  Compact Disk-Read Only Memory  Electronic storage medium that can store over 500 times more than a floppy diskette and is more durable  Readable-writeable optical technology now allows users to read and write information on CD-ROMs  Census Data

9. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Shortcomings of Secondary Data  May be inaccurate  May be inconsistent  May be inconvenient to compare  May be inaccessible

10. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Nature and Scope of Secondary Data  Secondary data is data not gathered for the immediate study at hand but for some other purpose.  Internal secondary data refers to the data collected by the individual business enterprise for accounting purposes or tracking marketing activities.  External secondary data refers to data captured by “outside” entities such as trade associations and the government.  Customer knowledge data is the “good stuff” – information offered up which is unsolicited and can be used for the purposes of marketing planning. 4-4

11. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Functional Roles of Secondary Data Research 4-5 Secondary Research Tasks External Market Data Trend Analysis Business Intelligence Competitive Intelligence External Customer Data Current Customers New Customers Needs Analysis Customer Knowledge Information Internal Support Data Primary Research Support Presentation Support Decision-making Support

12. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Presence of Secondary Data in Marketing Research A survey of marketing research firms conducted by The Society of Competitive Intelligence Professionals revealed the following exciting facts: I.82% use secondary data to monitor competitive and business intelligence. II.75% use secondary data to substantiate primary research. III.59% use secondary data to add value to presentations. IV.57% use secondary data for specific business decisions. V.48% use secondary data to validate internal data and primary data collection. 4-6

13. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Principles Used to Assess Secondary Data Purpose: Relation to current research objective. Accuracy: how, when the data collected. Consistency: Look for multiple sources. Credibility: Reputation and expertise of the organization. Methodology: How they are gathered. Bias: Underlying motivation or hidden agenda. 4-7

14. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Assessing Secondary Data 1.Who collected the data? 2.For whom was the data collected? 3.What was the purpose of the research? 4.When was the data collected? 5.How was the data collected? 6.How was the data analyzed? 7.How does the data compare with similar information from different resources?

15. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Citing Secondary Data Sources  Plagiarism: Using someone else’s work without giving credit or without obtaining permission from the source.  Copyright Laws: Protects works of art and literature.  International Copyright Laws: Copyright laws are territorial--apply only to actions and individuals within country borders.

16. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Common Sources of Internal Secondary Data 1.Sales invoices a.Customer name b.Address c.Class of product/service sold d.Price by unit e.Salesperson f.Term of sales g.Shipment point 4-8a 2. 2.Accounts receivable reports a.Customer name b.Product purchased c.Total unit and dollar sales d.Customer as percentage of sales e.Customer as percentage of regional sales f.Profit margin g.Credit rating h.Items returned i.Reason for return

17. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Common Sources of Internal Secondary Data 3.Quarterly sales report a.Total dollar and unit sales by: CustomerGeographic segment Customer segmentSales territory ProductSales rep Product segment b.Total sales against planned objective c.Total sales against budget d.Total sales against prior periods e.Actual sales percentage increase/decrease f.Contribution trends 4-8b

18. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Common Sources of Internal Secondary Data 4.Sales activity reports a.Classification of customer account Mega Large Medium Small b.Available dollar sales potential c.Current sales penetration d.Existing bids/contracts by Customer location Product 4-8c

19. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Additional Sources of Secondary Data 4-9a SourceInformation Customer lettersGeneral satisfaction/dissatisfaction data Customer comment cards Overall performance data Mail-order formsCustomer name, address, items purchased, quality, cycle time of order Credit applicationsFull and detailed biography (demographic, socioeconomic, credit usage, credit ratings) of customer segments Cash register receiptsDollar volume, merchandise type, salesperson, vendor, manufacturer

20. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Additional Sources of Secondary Data 4-9b SourceInformation Salesperson expense reports Sales activities, competitor activities in market Employee exit interviews General internal satisfaction/dissatisfaction data, internal company performance data Warranty cardsSales volume; names, addresses, zip codes, items purchased, reasons for product return Past marketing research studies A variety of data pertaining to the situation in which the marketing research was conducted Internet provided information Customer registration information, tracking, website visits, e-mail correspondence

21. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The GO-CART Approach to Secondary Data Goals: Target market profiles. Objectives: More information about specific topic. Characteristics: List of topics that they need to be explored (life styles). Activities: People your will see, or places you will go. Reliability: Search for several data sources on the topic. Tabulation: Cross-reference various sources. 4-10

22. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Key Variables Sought in Secondary Data Scans Demographic Dimensions Population growth: actual and projected Population density In-migration and out-migration patterns Population trends by age, race, and ethnic background Employment Characteristics Labor force growth Unemployment levels Percentage of employment by occupation categories Employment by industry Economic Characteristics Personal income levels (per capita and median) Type of manufacturing/service firms Total housing starts Building permits issued Sales tax rates Competitive Characteristics Levels of retail and wholesale sales Number and types of competing retailers Availability of financial institutions 4-11a

23. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Key Variables Sought in Secondary Data Scans Supply Characteristics Number of distribution facilities Cost of deliveries Level of rail, water, air, and road transportation Regulations Taxes Licensing Wages Zoning International Market Characteristics Transportation and exporting requirements Trade barriers Business philosophies Legal system Social customs Political climate Cultural patterns Religious and moral backgrounds 4-11b

24. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Common Government Documents Used as Secondary Data Sources 4-12a U.S. Census Data Census of Agriculture Census of Construction Census of Government Census of Manufacturing Census of Mineral Industries Census of Retail Trade Census of Service Industries Census of Transportation Census of Wholesale Trade Census of Housing Census of Population U.S. Census Reports Guide to Industrial Statistics County and City Data Book Statistical Abstract of the U.S. Fact Finders for the Nation Guide to Foreign Trade Statistics

25. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Common Government Documents Used as Secondary Data Sources 4-12b U.S. Department of Commerce Data U.S. Industrial Outlook County Business Patterns State and Metro Area Data Book Business Statistics Handbook of Cyclable Indicators Monthly Labor Review Measuring Markets: Federal and State Statistical Data Additional Government Reports Aging America: Trends and Population Economic Indicators Economic Report of the President Federal Reserve Bulletin Statistics of Income Survey of Current Business

26. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Buying Power Index Population X.50 + Retail sales X.30 + Income X.20 BPI = -------------------------------------------------------------------- 10 (Sum of the Weights)

27. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The North American Industry Classification System (NAICS)  1,170 industries  Grouped in 20 economic sectors  Six-digit, relatively easy-to-understand code To establish compatibility among U.S., Mexican, and Canadian classification schemes, representatives from NAFTA joined to create the North American Industry Classification System (NAICS). In 1997, the U.S. Office, Management, and Budget (OMB) announced NAICS would replace the SIC system, which had been in use since 1930.

28. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.  First two digits represent the general economic sector in which the industry is classified.  Third digit designates the subsector.  Forth digit is the industry group.  Fifth digit is the NAICS industry.  Sixth digit is the national industry. The NAICS Six-Digit Codes

29. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Syndicated Sources of Secondary Data Syndicated data sources are “commercial” in the sense they’ve been compiled according to some standard or customized process. Two very popular commercial sources are:  Consumer Panels: NPD, NET, NFO  Sampling error  Turnover  Response bias  4-13

30. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Syndicated Sources of Secondary Data (cont.)  Store Audits:  Product/brand sales.  Inventory levels.  Self space and POP.  Price points and levels.  In-store promotions and coupons.  Sales by territory and location.  Sales by customer demographic characteristics.

31. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Future of Secondary Data Sources  Approximately 90% of the information referenced here currently exists online.  In 1998 Search Engine Watch estimated the World Wide Web contained 1.2 Billion Web pages.  These “facts” and “estimates” are expected to mushroom at an exponential rate, with the amount of pages doubling in size every year!  The pressure to provide “outcomes” from secondary data scans which satisfy the Five “A’s” (Appropriate, Accurate, Accessible, Adequate, Actionable) will be overwhelming. 4-14

32. 1995 7888 4320 000 000001 00023 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Summary of Learning Objectives  Understand how secondary data fit into the marketing research process.  Understand how secondary data fit into the customer relationship management (CRM) process.  Demonstrate how secondary data can be used in problem solving.  List sources of traditional internal secondary data.  Demonstrate how to obtain external sources of secondary data.  List sources of external secondary data.  Understand the availability and use of syndicated sources of secondary data.  Understand the changing focus of secondary data usage. 4-15