Research Assistance 2

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Chapter 3

Secondary Data, Literature Reviews,

and Hypotheses

Learning Objectives

• Understand the nature and role of secondary data

• Describe how to conduct a literature review

• Identify sources of internal and external secondary data

• Discuss conceptualization and its role in model development

• Understand hypotheses and independent and dependent variables

Nature, Scope, and Role of Secondary Data

• Secondary data: Gathered for purposes other than the study at hand

– Internal secondary data: Collected by individual companies for accounting purposes or marketing activity reports

– External secondary data: Collected by outside agencies

• Federal and state governments

• Trade associations

• Marketing research services

Nature, Scope, and Role of Secondary Data (continued)

• Secondary data research has gained substantial importance in marketing research due to:

– Increased emphasis on business and competitive intelligence

– Ever-increasing availability of information from online sources

Literature Review

• Comprehensive examination of available information related to the research topic

• Helps clarify and define the research problem and research questions

• Suggests research hypotheses to investigate

• Identifies:

– Scales to measure variables

– Research methodologies that have been used successfully to study similar topics

Criteria Used to Evaluate Secondary Data Sources

Purpose

Accuracy

Consistency

Credibility

Methodology

Bias

Exhibit 3.1 - Key Descriptive Variables Sought in Secondary Data Search

Demographics Population growth: actual and projected Population density In-migration and out-migration patterns Population trends by age, race, and ethnic background

Employment Characteristics Labor force growth Unemployment levels Percentage of employment by occupation categories Employment by industry

Economic Data Personal income levels (per capita and median) Type of manufacturing/service firms Total housing starts Building permits issued Sales tax rates

Competitive Characteristics Levels of retail and wholesale sales

Number and types of competing retailers Availability of financial institutions

Supply Characteristics Number of distribution facilities Cost of deliveries Level of rail, water, air, and road transportation

Regulations Taxes Licensing Wages Zoning

International Market Characteristics Transportation and exporting requirements Trade barriers Business philosophies Legal system Social customs Political climate Cultural patterns Religious and moral backgrounds

Exhibit 3.2 - Common Sources of Internal Secondary Data

1. Sales invoices

a. Customer name b. Address c. Class of product/service sold d. Price by unit e. Salesperson f. Terms of sales g. Shipment point

2. Accounts receivable reports

a. Customer name b. Product purchased c. Total unit and dollar sales d. Customer as percentage of sales e. Customer as percentage of regional sales f. Profit margin g. Credit rating h. Items returned i. Reason for return

3. Quarterly sales reports

a. Total dollar and unit sales by:

Customer Geographic segment Customer segment Sales territory Product Sales rep Product segment

b. Total sales against planned objectives c. Total sales against budget d. Total sales against prior periods e. Actual sales percentage increase/decrease f. Contribution trends

4. Sales activity reports

a. Classification of customer accounts Mega Large Medium Small

b. Available dollar sales potential c. Current sales penetration d. Existing bids/contracts by

Customer location Product

Exhibit 3.3 - Additional Sources of Secondary Data

Source Information

Customer letters General satisfaction/dissatisfaction data

Customer comment cards Overall performance data

Mail-order forms Customer name, address, items purchased, quality, and cycle time of order

Credit applications Detailed biography of customer segments (demographic, socioeconomic, credit usage, credit ratings)

Cash register receipts Dollar volume, merchandise type, salesperson, vendor, and manufacturer

Salesperson expense reports Sales activities, competitor activities in market

Employee exit interviews General internal satisfaction/dissatisfaction data, and internal company performance data

Warranty cards Sales volume, names, addresses, zip codes, items purchased, and reasons for product return

Past marketing research studies Data pertaining to the situation in which the marketing research was conducted

External Sources of Secondary Data

• Primary sources of external secondary data

– Popular sources

– Scholarly sources

– Government sources

– North American Industry Classification System (NAICS): Codes numerical industrial listings designed to promote uniformity in data reporting procedures for the U.S. government

External Sources of Secondary Data (continued)

– Commercial sources

• Syndicated (commercial) data: Collected, packaged, and sold to organizations – Market share

– Sales tracking

• Consumer panels: Provide specific and detailed data on purchase behavior for an extended period of time

• Media panels: Provide data related to consumers' media consumption habits

• Store audits: Provide quantified data pertaining to the sales of a certain product or brand at the retail level

Exhibit 3.5 - Common Government Reports Used as Secondary Data Sources

U.S. Census Data

Census of Agriculture Census of Construction Census of Government Census of Manufacturing Census of Mineral Industries Census of Retail Trade Census of Service Industries Census of Transportation Census of Wholesale Trade Census of Housing Census of Population

U.S. Census Reports

Guide to Industrial Statistics County and City Data Book Statistical Abstract of the U.S. Fact Finders for the Nation Guide to Foreign Trade Statistics

U.S. Department of Commerce Data

U.S. Industrial Outlook County Business Patterns State and Metro Area Data Book Business Statistics Monthly Labor Review Measuring Markets: Federal and State Statistical Data

Additional Government Reports

Aging America: Trends and Population Economic Indicators Economic Report of the President Federal Reserve Bulletin Statistics of Income Survey of Current Business

Synthesizing Secondary Research for the Literature Review

• Divergent perspectives and findings need to be included

– Discrepancies in findings of studies include estimates of descriptive data

• Causes

– Inclusion (or not) of travel spending

– Methodological differences

– Degree of sampling error

Developing a Conceptual Model

• Literature reviews help conceptualize a model that summarizes the relationships one hopes to predict

• Elements required to conceptualize and test a model

– Variables: Observable items used as a measure on a questionnaire

– Constructs: Unobservable concepts measured by a group of related variables

Developing a Conceptual Model (continued)

– Relationships: Associations between two or more variables

• Independent variable: Variable or construct that predicts or explains the outcome variable of interest

• Dependent variable: Variable or construct that researchers are seeking to explain

Types of Hypotheses

• Descriptive hypotheses: Possible answers to a specific applied research problem

– Developing a descriptive hypotheses involves:

• Reviewing the research problem or opportunity

• Writing down the questions that flow from the research problem or opportunity

• Brainstorming possible answers to the research questions

Types of Hypotheses (continued)

• Causal hypotheses: Theoretical statements about relationships between variables

– Positive relationship: Two variables increase or decrease together

– Negative relationship: One variable increases while the other decreases

Characteristics of Good Hypotheses

Follow from research questions

Written clearly and simply

Testable

Conceptualization

• Development of a model that shows variables and hypothesized or proposed relationships between variables

• Involves:

– Identifying research variables

– Specifying hypotheses and relationships

– Preparing a conceptual model

• Conceptual model - Visual representation of the relationships to be studied

Exhibit 3.8 - A Model of New Technology Adoption

Hypothesis Testing

• Hypothesis: Empirically testable yet unproven statement developed to explain phenomena

– Null hypothesis: Statistical hypothesis tested for possible rejection under the assumption that it is true

– Alternative hypothesis: Hypothesis contrary to the null hypothesis

• Suggests that two variables are related

Hypothesis Testing (continued)

• Null hypothesis refers to a population parameter and not a sample statistic

– Parameter: True value of a variable

– Sample statistic: Value of a variable that is estimated from a sample

Marketing Research in Action The Santa Fe Grill Mexican Restaurant

• Should the owners of the Santa Fe Grill Mexican restaurant go back and restate their questions?

– If no, why not? If yes, why?

– Suggest how the research questions could be restated

Marketing Research in Action The Santa Fe Grill Mexican Restaurant

(continued)

• Develop a set of hypotheses that might be used to investigate the interrelationships between:

– Customer satisfaction

– Restaurant store image

– Customer loyalty