Essay Questions

78. In a short essay, discuss the advantages and uses of secondary data. Include a discussion of the disadvantages of secondary data to support your answer.

Answer

a. The main advantages of secondary data are the time and money they can save. While it is rare for secondary data to provide all the answers to a nonroutine research problem, analysis of secondary data should always be the first step taken toward solving a research problem. Secondary data can help a researcher (1) identify the problem, (2) better understand and define the problem, (3) develop an approach to the problem, (4) formulate an appropriate research design, (5) answer certain research questions and test some hypotheses, and (6) interpret primary data with more insight. Given these advantages and uses of secondary data, the basic rule of research is to examine available secondary data first. The research project should proceed to primary data collection only when secondary data sources have been exhausted or yield marginal returns.

b. The value of secondary data is typically limited by their degree of fit to the current research problem and by concerns regarding data accuracy. The objectives, nature, and methods used to collect secondary data may not be compatible with the present situation. Also, secondary data may be lacking in terms of its accuracy, compatibility of units of measurement, or time frame.

(easy, pages 99-101)

79. In a short essay, list and discuss at least five specific criteria that are essential for evaluating secondary data.

Answer

a. Specifications: Methodology used to collect the data – the research design specifications should be critically examined to identify possible sources of bias. Factors such as the size and nature of the sample, response rate and quality, questionnaire design and administration, procedures used for field work, and data analysis and reporting procedures are all important in identifying potential error as well as relevance of the data.

b. Error: Accuracy of the data – both secondary and primary data can have errors, stemming from the research approach, research design, sampling, data collection, analysis, and reporting stages of the project. Moreover, it is difficult to evaluate the accuracy of secondary data when the researcher has not directly participated in the research. The further removed the inquiring research is from the originating data source, the greater the possibility of problems with accuracy.

c. Currency: When the data were collected – secondary data may not be current. There may be a time lag between data collection and publication, as is the case with census data. Additionally, the data may not be updated frequently enough to answer questions related to the problem at hand. Marketing research requires current data; therefore, the value of secondary data is diminished as they become dated.

d. Objective: The purpose for the study – understanding why secondary data were originally collected can sensitize the researcher to the limitations of using them for the current marketing problem. The originating purpose of a previous research study may be irrelevant to the research problem at hand.

e. Nature: The content of the data – the nature, or content, of the data should be examined with special attention to the definition of key variables, the units of measurement, categories used, and the relationships examined. One of the most frustrating limitations of secondary data comes from differences in definition, units of measurement, time frame examined, or questionable assumptions regarding the relationships of key variables.

f. Dependability: Overall, how dependable are the data? – an overall indication of the dependability of the data may be obtained by examining the expertise, credibility, reputation, and trustworthiness of the source. This information can be obtained by checking with others who have used information this source provides.

(difficult, pages 100-103)

80. In a short essay, list and describe the four forms of general business sources that are categorized as external secondary data.

Answer

a. Guides – standard or recurring information is summarized in guides. Guides provide a path to other sources of secondary data contained in directories or published by professional or trade associations. Because guides can open the door to other sources of data, they are one of the first sources a researcher should consult.

b. Indexes and bibliographies – bibliographies, which are organized alphabetically by topic, are another good place to start external secondary research. Current or historic discussion of a particular topic of interest will be indexed in these references, leading the researcher to a number of authors. Several indexes are available for referencing both academic and business topics.

c. Directories – directories provide brief descriptions of companies, organizations, or individuals. They are helpful for identifying manufacturers operating in a specific market, for compiling names and addresses of associations in a sales territory, or for verifying names and addresses of prospective customers who carry a specific job title.

d. Nongovernmental statistical data – business research often involves compilation of statistical data reflecting market or industry factors. A historic perspective of industry participation and growth rates can provide a context for market share analysis. Market statistics related to population demographics, purchasing levels, television viewership, and product usage are just some of the types of governmental statistics available from secondary sources.

(moderate, pages 106-07)

81. In a short essay, list and discuss the four specific advantages of electronic dissemination of data over printed data that has led to the phenomenal growth of databases.

Answer

a. Current information – because printing is no longer an essential step in information dissemination, data can be updated continuously. Publishers who use computers to edit and publish their periodicals can now electronically transfer those documents to relevant databases, making them available with remarkable speed, as compared to the traditional methods of print production and physical distribution.

b. Faster data search – online vendors provide increasing uniformity in the search process, enabling even a relative novice at secondary research to access data more quickly and completely.

c. Low cost – the relative cost of accessing computerized databases is low.

d. Convenience – this has become perhaps one of the greatest benefits, computerized databases have delivered. Information providers now have a direct link to the end user equipped with a microcomputer and modem. They are no longer forced to distribute their products through libraries or retail outlets.

(moderate, page 109)

82. In a short essay, list and describe at least four major types of databases. Include a specific example of each type of database to support your answer.

Answer

a. Bibliographic databases are indexes of studies and reports published in journals, magazines, and newspapers. They can be on any subject, ranging from marketing research to technical reports and government documents. Summaries of the report findings are often provided. For marketers, one of the largest bibliographic databases is the FIND/SVP. It reflects the work of over 500 research firms on subjects such as consumer and product studies, store audit reports, subscription research services, and surveys of 55 industries worldwide.

b. Numeric databases specialize in disseminating statistical information, such as survey and time series data. Economic and industry data lend themselves to time series presentations, which are developed when the same variables are repeatedly measured over time. This type of data is particularly relevant for assessing market potential, making sales forecasts, or setting sales quotas. Vendors such as Boeing Computer Services, Data Resources, Evans Economics, and the Office of Economic Coordination and Development all provide time series data.

c. Full-text databases contain the complete text of the source documents contained in the database. One of the most useful full-text business databases can be accessed through Nexis. Mead Data Central's Nexis service provides full-text access to hundreds of business data sources, including selected newspapers, periodicals, company annual reports, and investment firm reports.

d. Directory databases provide information on individuals, organizations, and services. Standard & Poor's Corporate Descriptions is an example of a directory database that provides summary data on publicly held U.S. corporations. A secondary researcher wanting to compile information on a competitor or prospective customer can obtain data related to the growth of that organization, the size of its workforce, and its financial performance.

e. Special-purpose databases are more focused in their scope, such as the Profit Impact of Market Strategies (PIMS). The Strategic Planning Institute in Cambridge, Massachusetts, maintains PIMS, which reflects its research and analysis on business strategies from more than 250 companies, representing over 2,000 businesses.

(difficult, pages 111-112)

83. In a short essay, explain the appeal of census data to marketers.

Answer

a. Relevant data captured. Census data are useful in a variety of marketing research projects. The demographic data collected by the Census Bureau includes information about household types, sex, age, marital status, and race. Consumption detail related to automobile ownership, housing characteristics, work status, and practices as well as occupations are just a few of the categories of information available.

b. Geographical focus. What makes this demographic information particularly valuable to marketers is that these data can be geographically categorized at various levels of detail. These data can be summarized at various levels: city block, block group, census tract, metropolitan statistical area (MSA), consolidated metropolitan statistical area (CMSA), region (Northeast, Midwest, South, and West), or they can be aggregated for the nation as a whole. Census tracts have a population of more than 4000 and are defined by local communities. In urban areas, the MSAs have a population of at least 50000 and comprise of counties containing a central city. In addition, census data are available by civil divisions such as ward, cities, counties, and state.

c. High quality of data. In general, the quality of census data is quite high, and the data are often extremely detailed.

d. Available in a variety of forms. To facilitate business analysis, this information is available in multiple forms. One can purchase computer tapes, diskettes, or CD-ROMs from the Census Bureau for a nominal fee and recast this information into the desired format. Important census data include Census of Housing, Census of Manufacturers, Census of Population, Census of Retail Trade, Census of Service Industries, and Census of Wholesale Trade. Claritas' PRIZM uses census data. Integrating enhanced census data with internal company databases is a useful application of multiple secondary sources.

(moderate, page 108)

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