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MARKETING RESEARCH INSIGHT 5.2



Practical Application



Your Supermarket Is Spying on You

Tesco, one of the biggest supermarket retailers in the United

Kingdom, has a well-developed customer loyalty card—Clubcard. Customers can accumulate one point for every pound

that they spend; effectively it is a 1% discount. However, these

deals are sent to customers in the form of personalized offers

based on their previous purchases. Periodically, Tesco offers

extra points if customers buy certain brands or product categories. The cards are also used to attract infrequent customers

back to the stores.

The value of the card for the supermarket goes far beyond

rewarding customers. Each time a card is swiped or scanned, it

helps the supermarket to collect information about the shopping habits of the customer. How do supermarkets analyze

transactional behavior and use it to drive sales? The answer

is RFV (recency, frequency, and value) analysis. This approach

is used to group customers according to scores that are given

to each of them on the basis of how often they shop, how

many individual items they purchase each time, and how much

they spend. This approach to market segmentation provides a

framework that helps the supermarket to analyze consumer

behavior.

While the reward side of the equation benefits the customer, the other side is all about RFV analysis and using that

information to direct marketing efforts towards certain customers at personalized levels. Customers are segmented by age,

gender, and other criteria and can be identified by their relationship with certain clusters or types of products that they buy



on a regular basis. This way, someone who buys pasta will be

given offers on pasta sauce and, someone who buys a cat litter

box will be given offers on cat food.

Shopping preferences are also tracked. The store identifies

customers who pick almost the same basket of goods each time

they shop. Some customers might only be attracted to special

offers and would buy discounted products in bulk. Another

group might only buy luxury brands and never purchase ownlabel products. Tesco uses this understanding to provide personalized offers and “tempts” each group with relevant mixes

of coupons and bonus point deals.

If a customer does not have a loyalty card, the supermarket

can still track him or her when a card payment is made. Supermarkets, in any case, supplement their own data collection with

government data and credit reports. By using this broad range

of data, supermarkets are able to make informed decisions and

devise workable operational and marketing strategies. The data

is used to better understand consumer needs and assist supermarkets in deciding store locations, placement of advertisements, which brands to offer, and how much to stock.

Tesco is one of a number of marketers who are refining

their ability to micromarket, targeting each consumer with promotional materials customized for them specifically. Ostensibly,

this could make the customer’s shopping experience better, but

are these practices of collecting data about customers without

their consent ethical?



Source: Davis, G. (2013, July). Analysis: Loyalty cards—How retailers are using the data. Retail Week. Retrieved from http://www.retail-week.com/sectors/

grocery/analysis-loyalty-cards-how-retailers-are-using-the-data/5050868.fullarticle; Hobbs, T. (2015, October 9). Is Tesco clubcard still relevant? Marketing Week.

Retrieved from https://www.marketingweek.com/2015/10/09/is-tesco-clubcard-still-relevant/; Ferguson, F. (2013, June 8). How supermarkets get your data—

and what they do with it. The Guardian. Retrieved from http://www.theguardian.com/money/2013/jun/08/supermarkets-get-your-data.



goods and services you bought with anyone who wants to buy that information? Should your

Internet service provider be able to store information on which Internet sites you visit? As

more consumers have grown aware of these privacy issues, more companies have adopted

privacy policies.12 Marketing Research Insight 5.2 illustrates how collecting data on consumers can raise ethical concerns.



External data are data

obtained from outside the

firm.



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EXTERNAL SECONDARY DATA

External data are data obtained from outside the firm. Knowing where to find information

is a valued skill in the workplace. In the following sections we will introduce some sources

of secondary data, but we barely scratch the surface in terms of introducing you to secondary

data sources that will be beneficial to you in your career. Take the opportunity you have in

college to develop this skill. Your university librarians can be a great resource. Table 5.1 lists



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121



Secondary Information Sources for Marketing



I. Business Source Directories

Encyclopedia of Business Information Sources (Gale, Cengage Learning)—Published annually, this resource indexes almost

11,000 sources of business, finance, and industrial subjects.

BRASS Business Guides (BRASS, RUSA, American Library Association)—Maintained and updated by business information

professionals at research universities, these online guides provide links and information for sources on an array of business

topics including a list of the Outstanding Business Reference Sources awarded annually by the American Library Association.

Directory of Business Information Sources (Grey House Publishing)—Published annually and containing almost 24,000

entries, this resource indexes thousands of associations, publications, trade shows, databases, and websites.

II. Articles

ABI/Inform Complete (ProQuest)—Comprehensive collection of other ABI/Inform products (Global, Trade and Industry,

Dateline, and Archive). There are over 2,200 full-text scholarly journals along with thousands of business titles in trade

publications, news outlets, and reports from publishers like Business Monitor International, Economic Intelligence Unit, First

Research, and the Wall Street Journal.

Business Abstracts with Full Text (H.W. Wilson, Ebsco)—Over 450 full-text business publications including many top peerreviewed journals.

Business Collection (Gale, Cengage Learning)—Over 2,900 full-text business publications including 390 peer-reviewed

journals, news sources, and reports from publishers like Economic Intelligence Unit and AII Data Processing. There are

also Business Insights products from Gale that include the article content in addition to reports and company and industry

information.

Business Source Complete (Ebsco)—Expansion of Ebsco’s Business Source Premier. Nearly 2,000 full-text scholarly

journals including Harvard Business Review. Also includes trade publications, news outlets, and reports from publishers like

Marketline, Barnes Reports, Bernstein, and CountryWatch.

Factiva (Dow Jones)—Full-text articles from thousands of major news sources including Dow Jones, Reuters, Financial Times,

Bloomberg, and the Wall Street Journal.

LexisNexis Academic (LexisNexis, Reed Elsevier)—Thousands of news article sources and access to reports from Hoovers,

Business Monitor International, Morningstar, and Standard & Poor’s.

III. Dictionaries and Encyclopedias

Brands and Their Companies (Gale, Cengage Learning)—Published annually, this directory provides company, product, and

industry information for active and inactive brands from public and private companies.

Dictionary of Advertising and Marketing Concepts by Arthur Asa Berger (Left Coast Press, 2013)—Over 100 entries and

essays on concepts, theories, and key people in marketing.

A Dictionary of Marketing by Charles Doyle (Oxford University Press, 2011)—Over 2,600 entries on modern and historic

marketing concepts along with appendixes, notably including a time line of marketing.

Encyclopedia of Global Brands, 2nd Ed. (St. James Press, 2013)—Update of the Encyclopedia of Consumer Brands (St.

James Press, 2005) with 269 entries on major global brands including an overview of each brand’s history, performance, key

competitors, industry analysis, and prospects.

Encyclopedia of Major Marketing Strategies (Gale, Cengage Learning, 2013)—This third volume is the continuation of the

Encyclopedia of Major Marketing Campaigns series and contains detailed entries for 100 marketing campaigns in the early

2010s.

Wiley International Encyclopedia of Marketing (Wiley, 2011)—This six-volume set contains 360 entries in the areas of

marketing strategy, marketing research, consumer behavior, advertising and integrated communication, product innovation and

management, and international marketing.

IV. Marketing Directories

Advertising Redbooks (Red Books, LLC)—Formerly published as the Advertising Redbooks series, this database provides

a directory by company or agency of advertising campaigns, including budgets by media type. There is also a live listing of

marketing job prospects, movement of key people in the industry, and campaigns available for bid.

Complete Television, Radio & Cable Industry Directory (Grey House Publishing)—This annual directory, formerly published

as the Broadcasting and Cable Yearbook (ProQuest), has entries on television, cable, and radio outlets in the United States and

Canada along with rankings of top markets and programs.



(continues)



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TABLE 5.1



Secondary Information Sources for Marketing (continued)



GreenBook (New York AMA Communication Services, Inc.)—An online directory of marketing research companies.

Advertising & Branding Industry Market Research (Plunkett)—Published as an annual almanac and available in print, ebook,

or online, this source contains an industry analysis and profile of about 400 top companies in advertising.

Standard Rate and Data Service (Kantar Media SRDS)—This database is a directory of outlets for digital media, consumer

and business magazines, direct marketing, newspapers, radios, and TV and cable. Local outlets are searchable by DMA.

Entries include pricing, consumer analysis, and circulation. An additional section, Local Market Audience Analyst, contains

Experian Simmons lifestyle and Nielson PRIZM segment information by DMA.

V. Statistics and Reports

American Consumers Series (New Strategist Press)—A series of books with in-depth consumer spending, demographic, and

lifestyle statistical analysis.

DemographicsNow (Gale, Cengage Learning)—Allows for tabular and GIS mapping of demographic, consumer expenditure,

Experian Simmons consumer study, and Experian Mosaic lifestyle segmentation data. Additionally includes a directory for

people with income and household value information, a directory of small businesses with revenue, asset, and employment

data, and business site prospecting statistical tools.

eMarketer (eMarketer)—Research on online marketing trends and emerging technology. Free daily newsletter provides

highlights from recent reports.

LexisNexis Academic (LexisNexis, Reed Elsevier)—Company Dossier search has a directory of public and private companies

including small businesses with employment, revenue, and asset data. The database also indexes thousands of domestic and

foreign news sources.

Market Share Reporter (Gale)—Published annually, this report aggregates market share data and revenue figures for brands,

companies, and services from industry sources.

Mediamark MRI + (GFK Mediamark Research and Intelligence)—This survey of 25,000 U.S. households gives indexes for

consumer demographics, brand decisions, media use, and lifestyle behaviors.

Mintel Reports (Mintel Group)—Market research reports by industry published periodically and available for the United States

and globally. Additional reports include demographic segment analysis and reports on cultural trends.

Nielson (Nielson Company)—Measures consumer media use and purchasing decisions on an individual level. PRIZM,

P$YCLE, and ConneXions segmentation splits customers into target groups and details consumer and lifestyle decisions,

financial behavior, and technology use typical of the group. Data available on a global level.

Passport GMID (Euromonitor International)—Formerly the Global Market Information Database, this source provides

industry, consumer, and company trend and market share analysis available globally.

Reference USA (Infogroup)—Directory of businesses, including small businesses, and people and households with income,

household value, and lifestyle information.

Simmons OneView (Experian)—Formerly Choices3, this database provides full access to Simmons consumer survey data

covering lifestyle, media habits, and category and brand choices.

Simply Map (Geographic Research, Inc.)—Statistical mapping tool with official data. Add-ons include D&B company

databases, Experian Simmons, Nielson, EASI, and Mediamark MRI data.

Statista (Statista)—Private and official statistics available in general-interest areas with a strong focus on company and industry

sources. Statistics searchable as individual tables as well as collections of topical reports. Data available on domestic and

global levels.

Courtesy of LuMarie Guth, Business Librarian, Western Michigan University.



Three sources of external

data are (1) published

sources, (2) official data,

and (3) data aggregators.



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many of the major sources that are most useful in marketing research. Most of these resources

are online, although some are also available in print. Your university library may provide

access to many of these sources.

The following sections introduce three sources of external data: (1) published sources,

(2) official data, and (3) data aggregators.

Published Sources Published sources are those sources of information that are prepared

for public distribution and are normally found in libraries and online. Trade and professional



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associations publish information to meet the needs of specific industries, such as the food

industry (e.g., the National Grocer’s Association [NGA]) and the professional cleaning industry (e.g., the Worldwide Cleaning Industry Association [ISSA]). As detailed in Chapter 2, the

marketing research industry has a number of associations that regularly print periodicals and

annual reports, including Quirk’s, ESOMAR, and GreenBook. A number of business journals, magazines, and newspapers, such as the Wall Street Journal, the Economist, Bloomberg

Businessweek, Fortune, and Forbes, are available online, in libraries, and in stores. Academic

journals, including the Journal of Marketing Research, the Journal of Business Research,

the Journal of International Business, the Journal of Consumer Research, and the Journal of

Macromarketing, publish evidence-based research studies related to marketing. Books with

helpful information related to best practices in the research industry are published frequently.

Many marketing research firms publish secondary information in the form of books, newsletters, white papers, special reports, magazines, or journals. Marketing research firms may post

white papers on many topics on their websites. For example, see www.burke.com and under

the “About” tab go to “Literature Library” to see reports on topics such as industry trends and

best practices in research methodology.



Published sources

are those sources of

information that are

prepared for public

distribution by trade

associations, professional

organizations, companies,

and other entities and can

be found in libraries and

online.



Official Statistics Official statistics contain information published by public organizations, including government institutions and international organizations. Official statistics are

both qualitative and quantitative and include information related to demographics, economic

development, education, consumption patterns, health, education, the environment, and many

other topics. Many international organizations offer statistics for free online, including the

World Health Organization (WHO), the Organization for Economic Co-operation and Development (OECD), the World Bank, and the International Monetary Fund. Almost every country in the world gathers official statistics, generally using rigorous methods, and most make

them available to the public. As one example, the National Bureau of Statistics of China publishes nationwide data annually on numerous topics, such as basic demographics by county

and city, education levels, access to water, appliance penetration, and many other factors.

China’s national statistics are available online for every year since 1996 in both Chinese and

English (www.stats.gov.cn).

Since the passage of the Open Data Policy in 2013, the United States, by federal law,

makes all data collected by the government “open by default,” except for personal information or data related to national security. The website www.data.gov includes almost 200,000

datasets from 170 organizations. Free public data have been organized or merged to produce

profitable companies (e.g., Garmin and Zillow) and apps (e.g., Citymapper).13



Official statistics are

information published

by public organizations,

including governments

and international

organizations.



The U.S. Open Data Policy

makes all data collected

by the government “open

by default,” except for

personal information or

data related to national

security.



Active Learning

Use data.gov to Explore U.S. Official Statistics

Investigate all the free data that are collected by U.S. government agencies and now are available by law due to the U.S. Open Data Policy. Go to www.data.gov. The website states on its

opening page: “Here you will find data, tools, and resources to conduct research, develop

web and mobile applications, design data visualizations, and more.”14 Note the number of

topics represented, including agriculture, business, consumer, manufacturing, and many others. Click on “consumer” and then “apps.” You will see the many apps that have been developed using these freely available data. Type “family” in the search box and note the many

available datasets related to “family.” This is just a small representation of the large number

and wide variety of datasets available. Although these data are in and of themselves interesting, the main challenge for marketing professionals is to seek out relationships among these

data that provide new insights.



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For more

information

about the

Open Data

Policy, go to

www.youtube.com and enter

“Open Data Changes Lives.”

Data aggregators are

services or vendors that

organize and package

information on focused

topics.



In a later section, we will provide a more in-depth introduction to one source of U.S. official statistics, the American Community Survey. We have chosen the American Community

Survey because it is an excellent example of the rich resources of information that are available online for free.

Data Aggregators Data aggregators are services or vendors that organize and package

information on focused topics. Some of these services are available free of charge, but most

are available from commercial sources. Examples of these services are IBISWorld, Factiva,

Ebsco, and ProQuest. Business databases make up a significant proportion of these services.

Most of the data sources in Table 5.1 could be called data aggregators. Your university library

probably provides you with free access to many data aggregators.



5-4



The advantages of

secondary data are that

secondary data can be

obtained quickly and

inexpensively, are usually

available, enhance primary

data collection, and can

sometimes achieve the

research objective.



Advantages and Disadvantages of Secondary Data



ADVANTAGES OF SECONDARY DATA

The advantages of secondary data are, for the most part, readily apparent. There are five main

advantages of using secondary data: (1) Secondary data can be obtained quickly; (2) compared to collecting primary data, secondary data are inexpensive; (3) for almost any application, some secondary data are readily available; (4) secondary data may enhance primary data

by providing a current look at issues, trends, yardsticks of performance, and so on that may

affect the type of primary data that should be collected; and (5) secondary data may be all that

are needed to achieve the research objective. For example, a supermarket chain marketing

manager wants to allocate TV ad dollars to the 12 markets in which the chain owns supermarkets. A quick review of secondary data shows that retail sales of food are available by TV

market area. Allocating the TV budget based on the percentage of food sales in a given market

would be an excellent way to solve the manager’s problem and satisfy the research objective.

DISADVANTAGES OF SECONDARY DATA

Although the advantages of secondary data almost always justify a search of this information, there are caveats associated with secondary data. Five of the problems associated with

secondary data include incompatible reporting units, mismatch of the units of measurement,

differing definitions used to classify the data, timeliness of the secondary data, and lack of

information needed to assess the credibility of the data reported. These problems exist because

secondary data have not been collected specifically to address the problem at hand but have

been collected for some other purpose.

Incompatible Reporting Units Secondary data are provided in reporting units, such as,

in the case of area units, county, city, metro area, state, region, ZIP code, and other statistical areas. A researcher’s use of secondary data often depends on whether the reporting unit

matches the researcher’s need. For example, a researcher wishing to evaluate market areas for

the purpose of consideration for expansion may be pleased with data reported at the county

level. A great deal of secondary data is available at the county level. But what if another

marketer wishes to evaluate a two-mile area around a street address that is proposed as a site

location for a retail store? County data would hardly be adequate. Another marketer wishes to

know the demographic makeup of each ZIP code in a major city in order to determine which

ZIP codes to target for a direct-mail campaign. Again, county data would be inappropriate.

Although inappropriate reporting units are often problems in using secondary data, more and

more data are available today in multiple reporting units, such as data at the more refined

ZIP + 4 level.

Mismatched Measurement Units Sometimes secondary data are reported in measurement units that do not match the measurement unit the researcher needs. For example, a



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researcher may wish to compare the average income of households in urban areas in Turkey

and China. If income is reported in one nation as annual income after taxes and in the other

nation as monthly income before taxes, household income will be very difficult to compare.

Unusable Class Definitions The class definitions of the reported data may not be usable

to a researcher. Secondary data are often reported by breaking a variable into different classes

and reporting the frequency of occurrence in each class. For example, suppose a source of

secondary data reports the variable of household income in three classes. The first class

reports the percentage of households with income from $20,000 to $34,999, and the third

class reports the percentage of households with incomes of $50,000 and over. For most studies, these classifications are applicable. However, imagine you are a manufacturer of high-end

plumbing fixtures looking to expand the number of distributorships. You have learned that

your dealers are most successful in geographical areas with average household incomes above

$80,000. You need another source of information since the available source of secondary data

only reports household incomes of $50,000 and over. What would a researcher do in this situation? Typically, if you keep looking, you can find what you need. There may be other sources

of secondary data in other categories.

Outdated Data Sometimes a marketing researcher will find information reported with the

desired unit of measurement and the proper classifications; however, the data may be outdated

and no longer reliable. Some secondary data are published only once. However, even for secondary data published at regular intervals, the time that has passed since the last publication

can be a problem when applying the data to a current problem. The researcher must assess the

usefulness of the available data.



5-5



Five of the problems

associated with secondary

data include incompatible

reporting units,

mismatch of the units of

measurement, differing

definitions used to classify

the data, timeliness of the

secondary data, and lack

of information needed to

assess data credibility.



Evaluating Secondary Data



The advice that you can’t believe everything you read holds true for marketing research. You

must carefully assess the quality and validity of secondary data in deciding whether to use it

as a basis for making decisions. Caution is especially in order with Internet sources because

few quality standards are applied to most Internet sites. To determine the reliability of secondary information, marketing researchers must evaluate it. If the information is not available

to examine the reliability of the data, the source cannot be trusted. Trustworthy sources will

almost always have comprehensive details related to the methods used to collect their data.

The following sections offer five questions that are useful in evaluating secondary data.

WHAT WAS THE PURPOSE OF THE STUDY?

Studies are conducted for a purpose, and sometimes readers do not know the true purpose.

Some studies are conducted to “prove” some position or to advance the special interest of

those conducting the study. In the 1980s environmentalists became concerned over the growing mountains of disposable plastic diapers that had all but replaced cloth diapers. More than

a dozen state legislatures were considering various bans, taxes, and even warning labels on

disposable diapers. Then “research studies” were produced whose “purpose” was to evaluate

the environmental effects of disposable versus cloth diapers. The “new” research purported

to “prove” that cloth diapers, by adding detergent by-products to the water table, were more

harmful to the environment than the ever-lasting plastic disposables. Soon after several of

these studies were made available to legislators, the movement against disposables was dead.

However, further scrutiny might have called these findings into question. Procter & Gamble,

which owned the lion’s share of the market for disposable diapers, commissioned the consulting firm of Arthur D. Little, Inc., to conduct one of the studies. Another study that favored

disposables was conducted by Franklin Associates, whose research showed disposables were

not any more harmful than cloth diapers. But who sponsored this study? The American Paper



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