Secondary Data Sources
Slide 1
Before conducting a marketing research study, it’s best to consult secondary sources to both
inform that study or perhaps to provide the data that would have been duplicated by that study,
but at far less cost.
Slide 2
Fortunately, there are many resource people, such as librarians, to help with secondary data
searches. You’re probably familiar with conducting internet searches using sources such as
Google or Yahoo or perhaps a different search engine altogether. You’re also probably familiar
with using library databases and searching those as well. There are many non-computerized
sources of secondary information and there may be computerized sources with which you’re
unfamiliar or unknowledgeable about accessing. Librarians and library personnel are effective in
helping you to identify and successfully access that type of information.
Slide 3
What do marketing researchers mean when they speak about secondary data? Secondary data
is data gathered and recorded by someone else prior to and for a purpose other than the current
project. Such data is often historical, already assembled, and needs no access to study
participants.
Slide 4
Databases of secondary data come in four flavors: bibliographic, numeric, directory, and full
text. For bibliographic sources, think in terms of bibliographies or listings; although not selfcontained sources, they provide listings of possible sources for further query. Numeric sources
contain numbers; for example, census data creates lots of numbers that can be summarized
meaningfully in tables and graphs. A directory could be a listing of people by profession, or
newspapers in the U.S., or realtors in Las Cruces. Finally, for full text, think in terms of online
databases like Business Source Premiere. Although some of the cites referenced in Business
Source Premiere are limited to articles abstracts, titles, authors, and keywords, much of what’s
available is the full text of the original articles. Full text databases exist for newspapers as well
and many of those databases have been moved online.
Slide 5
Unlike primary data, which is collected for a specific and immediate research need, secondary
data already exists. What are the kinds of secondary data? Researchers divide them up into two
basic types: internal and external secondary data. I’ll discuss each of these and their relative
merits briefly.
Slide 6
Internal secondary data is data that has already been collected by a company for some other
purpose. Typically, that other purpose is associated with accounting, or tracking sales, or
tracking back orders, or even tracking customer complaints. That information, regardless of its
original reason for collection, can be used for other marketing decision making purposes.
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Slide 7
Here, briefly, are the relative advantages and disadvantages of internal secondary data. Under
advantages, I’ve listed two things. First, as this data has been collected by a company, it’s been
organized in a way that’s consistent with the business that company conducts. As a result, that
data should be in suitable geographic and business/product breakdown form to support
marketing-related decisions. Second, the data ought to be relatively fresh; for example, sales
data should be available from the previous months as opposed to annual sales data from the
previous year. Hence, the data is likely to be fresh and in a form that lends itself to marketingrelated decisions.
There are three disadvantages of such data. First, companies tend to collect such massive
amounts of internal secondary data that handling and analyzing it become difficult. In other
words, information overload is a possibility. Second, the inputs to a company’s internal
secondary data often are tied to compensation. For example, a salesperson who meets his or
her quota within the first three days of a month may try to smooth the entry of those orders into
the ordering system; as a result, that salesperson may withhold booking those orders for a week
or ten days, which might confound analyses about newly introduced products. Third, it’s
company data which likely has been collected for accounting and financial purposes. As a
result, it’s in accounting format, and accounting data may or may not lend itself to marketing
decision making.
Slide 8
This slide shows a list of some external sources for secondary data, like government agencies
and syndicated research services. For the latter, think in terms of Arbitron or Nielsen. Trade and
professional associations often collect useful data. I once helped to collect data for a trade
association called the Retail Floor Covering Institute, which was located in Chicago’s
Merchandise Mart. My mandate was to survey members of the trade association and to create
an annual report that all members could use as a baseline for comparing their performance
during the previous year. In addition to customized, computer-generated reports sent to every
self-identifying respondent, the trade association created an annual report for public
consumption.
Professional associations, like the American Marketing Association, collect a wide range of
information that it makes publicly available, some even through its website. There are custom
research firms that publicize their activities (in newspapers and the like) as well as publish
reports in professional journals and other outlets. Books and periodicals are sometimes an
excellent source for secondary data. Directories can provide excellent listings of possible
information sources. There are vendors who create and sell reports—often at high prices—to
interested people and companies. Finally, there’s the internet, which is the source for secondary
data I’m sure you know and use.
Slide 9
These next two slides address commercial sources of secondary data. For example, market
research companies like A.C. Nielsen provide syndicated data, which is market-level data
collected on an ongoing basis about competitors’ sales volume, brand share, pricing, promotion,
and the like. (I’ll discuss this in more detail later.) Also, there’s demographic and census
updates. Many organizations supply census updates in an easy-to-use or customized form,
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which allows them to extract additional rents from people who choose to buy this publicly
available information from them rather than the appropriate government agency.
Slide 10
Commercial sources for secondary data can provide results from attitudinal and public opinion
research. Recall the last election, where almost nightly Roper or some national network
conducted an overnight telephone poll to assess potential voters’ opinions about the candidates
or the issues. Other commercial suppliers can conduct and make research results available on
consumption and purchase behavior, consumer responses to advertising, and magazine/
newspaper/audience loyalty/responsiveness. That said, most of the details regarding such
studies are syndicated and proprietary.
Slide 11
Here’s a brief example about how an automobile leasing company used secondary data from
Donnelly Demographics.
Slide 12
Although most of you are familiar with most of the secondary data sites listed on this slide, I
thought it wise to provide because it might prove valuable to some of you.
Slide 13
Secondary data can be used for at least three different purposes: fact finding, model building,
and database marketing.
Slide 14
If fact finding is the objective, then here are three possibilities. Marketers might want to know
consumption patterns within a region, a town, a zip code, or a phone exchange. Patterns of
consumption may provide marketers with valuable insights; for example, if introducing a product
into a region, then superior warehouse site location and distribution decisions would rely on
local consumption patterns. Another possibility is to assess trends. By looking at secondary data
collected over time, especially data collected by the government, marketers may be able to
identify longer-term trends and thus anticipate—rather than merely react to—changes in the
environment. Finally, secondary data for fact finding could help with environmental scanning,
not merely to track trends, but also to identify fundamental structural marketplace changes that
have occurred over time.
Slide 15
Secondary data also can be used to build sophisticated quantitative marketing models, which
are far beyond the scope of this course. Nonetheless, secondary data can be used to help to
create the type of econometric models used to estimate market potential, to forecast long-run
sales, or to select a new trade area or site for introducing a brand to a marketplace.
Slide 16
A third objective for secondary data is to create databases that could be used to track current
customers or to develop lists of prospective customers. Such databases would include names,
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addresses, past purchases, responses to past marketing efforts; often, this data is collected
from multiple sources. There may be some ethical issues regarding the aggregation of data
from multiple sources and this certainly is an issue in Europe. I’ll discuss that more in my lecture
on marketing research ethics.
Slide 17
Now I’ll briefly discuss the advantages and disadvantages of secondary data. Here’s a list of six
possible advantages.
(1) It tends to be far less expensive than primary data. Think about the large direct costs of
fielding a study, collecting data, and analyzing that data in a meaningful fashion. Those
costs are why I’ve argued in several lectures that marketing research is an asset; it has
a cost and must be thought of in terms of cost-versus-benefit or net value. Secondary
data is less expensive because the entities that collected it either did so for some other
purpose or will sell it to many people or companies to amortize its direct costs over a
sufficient number of entities to make it affordable to all.
(2) It’s relatively faster to obtain. Field a research study means designing it or soliciting the
parties who’ll be responsible for designing it, fielding it, and analyzing the data it yields—
all which take a fair amount of time.
(3) It’s already been created and is relatively straightforward to access. Secondary data is
available far more rapidly than primary data.
(4) It tends to be readily available. There are many ways to access such data, especially if
it’s available via the internet or from government sources.
(5) It can be used to aid in designing primary research. Secondary data (a) can inform the
research, and (2) can indicate the questions that should be asked and the ways those
questions should be formulated.
(6) It can be used in conjunction with primary data to help understand the bigger picture.
Primary data provides some information and secondary data provides complimentary
information. When combined, they provide a fuller picture of the environment in question.
Slide 18
Although not all government data is free, much of it is free. A DVD with U.S. Census data will
cost roughly $6,000 to $7,000. Government data often is available free, available online,
available at the public library, and available at archival facilities like university libraries.
Slide 19
Although there are many advantages to secondary data, there are some disadvantages.
(1) The data may not be consistent with needs; for example, people are grouped in an
unsuitable way. Media reports group people in accord with key demographics, such as
the 35-50 year-old group. That age classification may be too broad for some research
purposes. It’s possible that the units of measurement for standard variables like age,
income, occupation, and the like, also may be incompatible.
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(2) The data may be dated. The U.S. Government collects census data on an ongoing
basis—rather than only once every 10 years—and in particular conducts a mid-census
assessment to examine changes. Thus, even U.S. Census data may be as much as five
years old, and that may be far too old for some research needs. Again, think how much
Las Cruces has changed in the last five years and whether you’d want to trust five-yearold data to select a site for a new restaurant.
(3) Finally, despite all the suggestions I’ll make in the subsequent several slides, it may be
difficult to assess the credibility of secondary data. Despite knowing about data quality,
and when to trust and when not to trust data, reports may be incomplete regarding the
methodology used, and there may be issues that make it difficult to assess the
trustworthiness of secondary data.
Slide 20
Ultimately, it’s up to you to assess the credibility of any secondary data you might use in making
a decision. Here’s a list of six questions that you should ask yourself about data before you
decide to trust it.
(1) What was the purpose of the study? It matters greatly whether the study was for public
policy purposes or for some commercial venture.
(2) Who collected the data? Was it the government? Was it a highly reputable commercial
firm? Was it a fly-by-night research organization? The quality of the data is related to the
abilities and the credibility of the people who collected it.
(3) What data were collected, and do they truly pertain to research needs?
(4) Are the data timely? In other words, when was it collected? For example, in Las Cruces,
which is changing seemingly almost weekly, timeliness is critical. Five-year-old U.S.
Census data may be useless and outdated for identifying a location for a new restaurant.
Knowing when data were collected helps to assess its adequacy and timeliness.
(5) How were the data collected? To some extent, the methodology is related to quality, and
quality is related to its credibility.
(6) Is the data consistent with other data? Convergence would be comforting. If you saw a
government report, a few commercial reports, and perhaps a newspaper-sponsored
report, and they all seemed to converge on the same basic assessment, then you’d feel
far more comfortable trusting that collection of converging sources than you’d be if one
source indicated one thing and another source indicated an entirely different thing.
Slide 21
For those of you who prefer a flow diagram to serve as a framework for assessing the quality of
secondary data, here’s one that has stood the test of time. First ask “Did the data help to
answer questions set out in the problem definitions? (I’ll assume yes for all these answers). If
yes, then did the data apply to the population of interest? If yes, then did the data apply to the
time period of interest? If yes, can the units and classifications presently apply? (By apply, I
mean to field research needs). If yes, if possible, go to the original source of the data. If yes,
then was the cost of the data acquisition worth it? There’s always a cost-benefit issue with all
data collection, even if it is secondary. If yes, is there a possibility of bias? If there’s no
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possibility of bias, then the data is worth using, but if there’s a possibility of bias, then the issue
is “Can the accuracy of the data collection be verified?” If yes, then use it without hesitation, but
if no, then conduct some sort of risk assessment. This is a reasonable framework for
summarizing the points or the set of six questions offered in the previous slide.
Slide 22
Regarding an assessment of information on the internet, posted on different websites, this
checklist of possible questions would help to assess the credibility of information on those sites.
These questions are divided into five categories: purpose, authority, scope, audience, and
format. This is a reasonable set of questions for making an appropriate assessment.
Slide 23
I would be remiss if I didn’t’ alert you to possibilities of problems with secondary data collected
outside the U.S. In addition to all the limitations I’ve mentioned about secondary data in general,
there are additional pitfalls in using global data of this type. First, many times that data is
unavailable. Although we’d like to believe that the governments of all countries collect
appropriate data or at least comparable data to what our government collects, some
governments don’t collect such data because it’s cost prohibitive. As a result, it’s unavailable.
Hence, certain types of data available in the U.S. or in other western countries to make
marketing decisions may be unavailable in non-western countries. Global secondary data also
may be less accurate due to less oversight in tabulation and poorer data collection methods. It
also may be far more dated than what’s available in the U.S. There’s national census data
collected every ten years and intermediate efforts to collect and update census data. In other
countries, the equivalent of census data may be far less timely.
Slide 24
As a final warning about secondary data, be careful when that data is presented as either
percentages or as index numbers. Percentages can be based on large or small populations,
and large or small samples. With very large or small samples/populations, seemingly
meaningful percentage differences may not be statistically significant, let alone managerially
meaningful. Be careful that percentages, if judged to be meaningfully different, are based on
truly meaningful samples or populations.
As for index numbers, they’re often computed relative to a base year or a base period, and
those bases can shift over time at the researchers’ or data reporters’ convenience. Although this
dates me somewhat, I recall when the Consumer Price Index was based on 1967 prices. Later, I
recall the U.S. Government, after several years of Jimmy Carter and inflation rates approaching
20%, shifted the base year to 1978. I suspect the base year is now some time in the 1980s—
during the Reagan administration—when inflation shifted to a much lower annual rate. Be
careful with index numbers, especially government index numbers, are comparing numbers
from identical base years. Otherwise, those numbers must be converted appropriately.
Slide 25
To recap, this lecture addressed five issues about secondary data. First, it defined secondary
data and differentiated it from primary data. Second, it summarized the different types of
secondary data more broadly and differentiated internal from external secondary data. Third, it
briefly indicated how secondary data could be used by marketing researchers. Fourth, it briefly
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explored the relative advantages and disadvantages of secondary data. Finally, it provided a
few broad guidelines for evaluating whether or not secondary data is appropriate.
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