King Fahd University of Petroleum & MineralsDepartment of Management and Marketing

MKT 345 Marketing ResearchDr. Alhassan G. Abdul-Muhmin

Secondary Data Research Reference: Zikmund, Chapter 7

Learning Objectives

At the end of the discussion you should be able to:1. Define secondary data and distinguish it from

primary data2. Explain the advantages and disadvantages of

secondary data3. List and explain the various uses of secondary

data in marketing research4. Identify the possible internal sources of

secondary data5. Identify the possible external sources of

secondary data generally, and specifically in Saudi Arabia

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

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

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 Currency - Available information may be outdated and not suitable for our needs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

Evaluation of Secondary Data

• Often secondary data needs to be evaluated to determine its suitability for the current project.

• Common evaluation Criteria1. Applicability of the data to objectives of the current project

in terms of:• Relevance to current project’s problem definition• Applicability of time period • Applicability to relevant population• Applicability of terminology and variable classifications• Applicability of units of measurement•  

2. Accuracy of the data • Possibility of bias• Verification of accuracy of data collection• Cross-validation from original source

Uses of Secondary Data

1. In exploratory research to understand the background and nature of marketing problems, define research problem, and formulate hypotheses for testing

2. Fact-finding (descriptive research)– Identification of industry characteristics– Identification of consumer behavior for a product

category– Trend analysis– Environmental scanning

Using Secondary Data in Fact-Finding

Using Secondary Data in Fact-Finding

Uses of Secondary Data

3. Model Building e.g.1. Estimating geographic market potentials

2. Forecasting (a) environmental forecasting (b) sales forecasting

3. Analysis of Trade Areas and Sites

4. Database Marketing - marketing activities that are based on maintaining customer databases with customers' names, addresses, phone numbers, past purchases, demographic information, etc

Forecasting - Linear Trend Extrapolation

Figure 6.1 Trends and Projection of Total Ad Spending in Arabic Papers

y = 49,417,886.49x + 260,000,000.00

R 2 = 0.97

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Year

SR

Forecasting - Nonlinear Trend Extrapolation

Figure 6.2 Trend & Projection of Total Ad Spending in English Language Newspapers

y = 7,820,646.93Ln(x) + 39,269,945.73

R2 = 0.53

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Year

SR

Oil Prices, Government Revenues, And Construction Activity

1 Year

2

Average Brent Crude Price

($/Barrel)

3

Average Saudi Oil

Price ($/Barrel)

4

Govt. Budget

Revenues (billion

SR)

5

Number of

Building Permits Issued

6

Total Floor Area (mill. m2)

7 Total

Length of Boundary

Walls (mill. L.

M.)

8

Value of Construction

Contracts Awarded

(billion SR) 1990 23.61 20.61 1991 20.06 16.73 30,720 18,282 1992 19.33 16.75 46,136 33,884 1993 17.00 14.30 55,689 40,673 1994 15.80 14.09 129.0 72,620 51,594 6,590 3,556 1995 17.01 15.50 146.5 43,733 29,901 4,089 11,764 1996 20.07 19.20 179.1 29,872 24,062 3,498 2,247 1997 19.06 17.70 204.4 29,044 21,822 2,702 1,853 1998 12.71 10.50 143.0 27,408 21,496 4,184 2,930 1999 121.0

NOTES: a) Columns 2-4, and column 8 are taken from a 1998 study by the National Commercial

Bank titled “The Saudi Construction Sector: Outlook for 1999” b) Columns 5-7 are derived from “The Statistical Yearbook” published by the Ministry

of Planning

Forecasting - Regression

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

Sources of Secondary Data

1. Internal and proprietary sources

2. External sources1. Producers of secondary data

2. Distributors of secondary data

Internal Sources of Secondary Data

• Accounting system, routine company documents, Salespeople’s 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

External Sources - Producers

1. Publishers of books and periodicals2. Government departments3. Media 4. Trade associations5. 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

External Sources - Distributors

1. The Internet

2. Libraries

3. Commercial vendors

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 Commerce3. Saudi Arabian Monetary Agency (SAMA) – Banking

and financial statistics4. Annual reports of companies listed on the stock

exchange5. Commercial research suppliers, e.g. Amer Research,

Pan-Arab Research Center.