McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
CHAPTER 4
Secondary Data and Databases
LEARNING OBJECTIVES
1. To understand how firms create an internal database.
3. To become familiar with data mining.
5. To understand the role of the Internet in obtaining secondary data.
6. To learn about types of information management systems
KEY TERMS
Secondary data Primary data
Internal database Database marketing
Neural Network Data mining
CHAPTER SUMMARY
This chapter examines the many sources of secondary data. It also explores ways to manage that
data.
Databases that are internal to the company can provide some of the most useful information
needed to make good marketing decisions. The chapter discusses creating a database, as well as
what makes it successful. It also outlines why database marketing is becoming so important.
There is an enormous amount of secondary data already published and available to the firm.
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
Wide Web provide resources far beyond what anyone could have imagined before the 1990s.
CHAPTER OUTLINE
1. Nature of Secondary Data
I. Definitions
A. Secondary Data
2. Internal Databases
I. Creating an Internal Database
A. Internal Database
B. Starting Point
II. Growing Importance of Internal Database Marketing
3. Information Management
I. Information Systems
A. Information Management
4. Summary
CHAPTER SUMMARY
1. NATURE OF SECONDARY DATA
1. Internal Sources–includes annual reports, reports to stockholders, product testing results, and
2. External Sources–federal, state, and local departments and agencies, trade and industry
associations, business periodicals, and other news media. Most of these sources can be found on
the Internet
B Primary Data–surveys, observations, and experiment data collected to solve the particular
problem under investigation.
II. Advantages of Secondary Data
A. May be obtained at a fraction of the cost, time, and inconvenience of primary data
B. May help clarify or redefine the problem during the exploratory research process
C. May provide a solution to the problem
D. May provide primary data research method alternatives
see Practicing Marketing Research (p91)
A major hotel chain found that it was more effective to monitor the delivery of clean bathrooms
by putting a sticker in the bathroom and on the room desk highlighting the guest services hotline
rather than conducting monthly surveys. A bank was surveying customers on the uptime of the
Discussion Questions:
1. What can companies do to make sure that the data doesn’t already exist?
2. How can an intranet help avoid duplicate research?
III. Limitations of Secondary Data
A. Lack of availability
B. Lack of relevance
C. Inaccuracy
1. Who gathered the data?–source of the secondary data is a key to their accuracy
2. What was the purpose of the study?–understanding the motivation for the research provides
3. What information was collected?–identify exactly what information was gathered and from
4. When was information collected?–if timing is important this is a need to know
5. How was the information collected?–by mail, telephone, Internet, or personal interviews
2. INTERNAL DATABASES
I. Creating an Internal Database
A. Internal Database–a collection of related information developed from data within the
organization
B. Starting Point
1. Built on salesperson’s “call reports”
a. Call reports provide a blueprint of a salesperson’s daily activities. It details the number of calls
made, characteristics of each firm visited, sales activity resulting from the call, and any
information picked up from the client regarding competitors
b. Built on sales results and customer preference
see Practicing Marketing Research: Looking for Intelligence in Ice Cream (p 94)
Ben & Jerry’s rely on business intelligence (BI) to track the success or failure of their many
flavors of ice cream. The company depends on the information gathered to make decisions about
Discussion questions:
1. Could your university use a “dashboard?” How?
2. How can databases improve customer service?
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
II. Growing Importance of Internal Database Marketing
A. Database Marketing–relies on the creation of a large computerized file of customers’ and
potential customers’ profiles and purchase patterns
B. Micromarketing–database marketing can get a customized individual message to everyone
simultaneously through direct mail
see Practicing Marketing Research: Database Design and Implementation (p 96)
Mike Foytik, senior VP for Information Science for DSS Research, is a strong proponent of
relational databases. In a relational database, data are stored in several small structures or files
Discussion Questions:
1. Why are more firms creating relational databases?
2. What are the primary drawbacks of relational databases?
III. Data Mining
A. Neural Network–computer program that mimics the processes of the human brain and is
capable of learning from examples found in patterns of data
B. Data Mining–use of statistical and other advanced software to discover non-obvious patterns
hidden in a database. The widest applications would be the following:
1. Customer acquisition
3. Customer abandonment
4. Market basket analysis
IV. Behavioral Targeting
A. Definition-Behavioral targeting is the use of online and offline data to understand a
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
A. Criticism of Databases–causing increasing concern about privacy issues–how will the
information be used. Your actions catch up with you because of the records online and what you
do online–Web searches, e-mail messages.
2. Privacy advocates are concerned because technology allows the combination of information
B. Identity Theft–costs $55 billion annually
1. Federal Laws
a. Gramm-Leach-Bliley Act (Financial Services Modernization Act)–aimed at financial
companies–require that customers be told how they will use personal information
b. Health Insurance Portability and Accountability Act–healthcare industry–limits disclosure
of individuals’ medical information
c. The Fair Credit Reporting Act (FCRA)–enforced by the Federal Trade Commission,
promotes accuracy in consumer reports and is meant to ensure the privacy of the information in
them
d. The Children’s Online Privacy Protection Act (COPPA)–gives parents control over what
information is collected from their children online and how such information may be used
2. State Laws
a. California’s Notice of Security Breach Law– if non-encrypted information has been taken
by an unauthorized person, the company or agency must tell the California resident
D. Getting Paid to Give Up Your Privacy–paying people to participate in online surveys, to
track their click streams, or to evaluate Web sites
See Practicing Marketing Research: Turn Your Opinions Into Cash (p 105)
“Turn your opinions into cash?” If you answer yes–you are joining others in selling your privacy
1. Legitimate survey research (focus group or otherwise) never asks respondents to pay to
2. With the publicity of these offers, respondents may become uniformly accustomed to being
3. One net effect of such “offers” is the creation of “professional respondents” or “professional
survey takers”. Such individuals have views that may not be wholly representative of the group
Discussion questions:
1. Do you think that it is ethical to pay for someone’s opinion?
2. How can paying for opinions influence data quality?
2. The sliced and repackaged research reports are narrower and more specialized and more
affordable
C. Major Aggregators
1. AllNetResearch.com
3. Bitpipe.com
5. MarketResearch .com
3. INFORMATION MANAGEMENT
I. Geographic Information System (GIS)–includes a demographic database, digitized maps,
and software that enables the user to add corporate data to the mix
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
A. GIS–computer-based system that uses secondary and/or primary data to generate maps that
visually display various types of data geographically. Allows researchers, managers and clients
an intuitive way to organize data and to see relationships and patterns
B. Spatial Analysis–allows queries that would enable a company to determine how its trading
area overlaps with a competitors’
III. Decision Support Systems (DSS)–designed to support the needs and styles of individual
decision makers
4. SUMMARY
QUESTIONS FOR REVIEW & CRITICAL THINKING
1. Why should companies consider creating an internal marketing database? Name some
types of information that might be found in this database and sources of this information.
Internal marketing databases are an excellent way to identify and classify customers and to
monitor their purchases. This gives the firm the ability to target their market offering more
2. Why has data mining become so popular with firms like United Airlines, American
Express, and Ford Motor Company?
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
3. What are some of the keys to ensuring the success of an internal database?
First, the firm must design a database and management system that will provide specific
4. Why are secondary data often preferred to primary data?
5. What pitfalls might a researcher encounter in using secondary data?
6. Why has behavioral targeting become so popular with marketers? Why is it
controversial?
7. In the absence of company problems, is there any need to conduct marketing research or
develop a decision support system?
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
The definition of marketing research states that information is collected not only to help find
8. What is a marketing research aggregator? What role does it play in marketing research?
9. (Team Exercise)
Divide the class into groups of four or five. Each team should go to the Internet and look up
WORKING THE NET
For more detailed information on maneuvering around the Internet, see the “Sites of
Interest” for this chapter located at www.wiley.com/college/mcdaniel.
1. What makes vendors’ Web sites a desirable tool for creating an internal database?
Students’ answers will vary. Vendors’ offerings will have the format already created. They will
have suggestions concerning the types of data that should be collected. They will offer
2. Go to http://www.yakelovich.com. Explain to the class the nature and scope of the
Yankelovich
MONITOR. How can marketing researchers use the data from this research?
Yankelovich is a marketing consulting agency that offers marketing management advice, a
wealth of information about economic and industry trends for a wide range of businesses, and
3. Go to the National Opinion Research Center at www.norc.uchicago.edu and describe
what new reports are available for researchers.
Just a sample of the reports and studies available in January 2006 include: Economics, Labor,
and Population studies; Education and Child Development; Health Survey, Program, and Policy
Research Statistics and Methodology; Substance Abuse, Mental Health, and Criminal Justice;
4. You are interested in home building trends in the United States as your company,
Whirlpool, is a major supplier of kitchen appliances. Go to http://www.nahb.com and
describe what types of information at this site might be of interest to Whirlpool.
The National Association of Home Builders is a trade association. They track economic,
legislative, social, and technological issues that are of interest and importance to builders,
5. Go to www.claritas.com. Describe types of secondary data available at this site.
SBPOnline Reports has merged with Claritas, and Claritas is now owned by Nielsen. This
situation reflects one of the realities of the Internet. Players come and go very rapidly.
Sometimes they are merged into stronger units, sometimes they just vanish. A variety of
6. Go to www.marketresearch.com and explain what types of reports are available.
From the Web site: MarketResearch.com is an aggregator of global business intelligence
7. Go to www.comscore.com and explain what they offer their customers.
8. Go to www.Nielsen.com and read about BuzzMetrics. Explain how it works and
why it is a valuable tool to some marketers.
McDaniel & Gates – Marketing Research, 9th Edition Instructor’s Manual
REAL-LIFE RESEARCH
Case 4.1 Sanitized to Perfection (p 112)
Key Points
• Yankelovich identifies a segment of the US population that it calls “Neatniks” –
consumers who strive for cleanliness as a matter of personal style and to fulfill the need
Questions
1. Is the Yankelovich study primary or secondary data? Why?
It is secondary data, as it was not gathered for a particular problem.
2. How might someone like Procter & Gamble use this information? Hoover?
The information in this survey may prove particularly useful for marketing communications, as it
outlines the higher order consumer values and needs that cleaning products may be serving.
3. Are psychographic data as helpful to marketers as demographic data?
In many cases, psychographics may be more helpful than demographics, as the former are more
4. What other sources might a company like Hoover (vacuum cleaners) use to help develop
new products/product modifications, identify target customers, and develop a promotional
strategy?
Hoover should examine any internal information such as sales reports or customer
Case 4. The Changing Face of Motherhood (p 113)
Key Points
• Today’s mothers of newborns are older, better educated, less likely to be white, and less
Questions
1. Is this information primary or secondary data?
2. How might Gerber use this information? Would it need to follow up with primary
research?
3. Cite examples of how promotion may need to change to reach new mothers.
The delay in age of motherhood is associated with delay in age of marriage and with
growing educational attainment, the report notes. The more education a woman has, the
later she tends to marry and have children. Birth rates also have risen for the most educated
4. If Disney World considers adding a new theme area to its Orlando park, what clues
might they pull from the above case? Suggest areas of follow-up research.
