PRIMARY & SECONDARY DATA – WHAT’S THE DIFFERENCE?

Primary research entails the use of immediate data in determining the survival of
the market. The popular ways to collect primary data consist of surveys, interviews
and focus groups, which shows that direct relationship between potential customers
and the companies. Whereas secondary research is a means to reprocess and
reuse collected information as an indication for betterments of the service or
product. Both primary and secondary data are useful for businesses but both may
differ from each other in various aspects.
In secondary data, information relates to a past period. Hence, it lacks aptness and
therefore, it has unsatisfactory value. Primary data is more accommodating as it
shows latest information.
Secondary data is obtained from some other organization than the one
instantaneously interested with current research project. Secondary data was
collected and analyzed by the organization to convene the requirements of various
research objectives. Primary data is accumulated by the researcher particularly to
meet up the research objective of the subsisting project.
Secondary data though old may be the only possible source of the desired data on
the subjects, which cannot have primary data at all. For example, survey reports or
secret records already collected by a business group can offer information that
cannot be obtained from original sources.
Firm in which secondary data are accumulated and delivered may not
accommodate the exact needs and particular requirements of the current research
study. Many a time, alteration or modifications to the exact needs of the investigator
may not be sufficient. To that amount usefulness of secondary data will be lost.
Primary data is completely tailor-made and there is no problem of adjustments.
Secondary data is available effortlessly, rapidly and inexpensively. Primary data
takes a lot of time and the unit cost of such data is relatively high.
Custom Software Development

Secondary data

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Secondary data is data collected by someone other than the user. Common
sources of secondary data for social science include censuses, surveys,
organizational records and data collected through qualitative methodologies or
qualitative research. Primary data, by contrast, are collected by the investigator
conducting the research.

Secondary data analysis saves time that would otherwise be spent collecting data
and, particularly in the case of quantitative data, provides larger and higher-quality
databases than would be unfeasible for any individual researcher to collect on their
own. In addition to that, analysts of social and economic change consider
secondary data essential, since it is impossible to conduct a new survey that can
adequately capture past change and/or developments.

Contents

[hide]

 1 Sources of secondary data

 2 Secondary analysis or re-use of qualitative data
 3 Overall challenges of secondary data analysis
  4 References
 5 Further reading
 6 External links

[edit] Sources of secondary data

As is the case in primary research, secondary data can be obtained from two
different research strands:

 Quantitative: Census, housing, social security as well as electoral statistics

and other related databases.

 Qualitative: Semi-structured and structured interviews, focus groups

transcripts, field notes, observation records and other personal, research-
related documents.

A clear benefit of using secondary data is that much of the background work
needed has been already been carried out, for example: literature reviews, case
studies might have been carried out, published texts and statistic could have been
already used elsewhere, media promotion and personal contacts have also been
utilized.

This wealth of background work means that secondary data generally have a pre-
established degree of validity and reliability which need not be re-examined by the
researcher who is re-using such data.

Furthermore, secondary data can also be helpful in the research design of

subsequent primary research and can provide a baseline with which the collected
primary data results can be compared to. Therefore, it is always wise to begin any
research activity with a review of the secondary data.

[edit] Secondary analysis or re-use of qualitative data

Qualitative data re-use provides a unique opportunity to study the raw materials of
the recent or more distant past to gain insights for both methodological and
theoretical purposes.

In the secondary analysis of qualitative data, good documentation can not be

underestimated as it provides necessary background and much needed context
both of which make re-use a more worthwhile and systematic endeavour [1].
Actually one could go as far as claim that qualitative secondary data analysis “can
be understood, not so much as the analysis of pre-existing data; rather as involving
a process of re-contextualising, and re-constructing, data” [2].

[edit] Overall challenges of secondary data analysis

There are several things to take into consideration when using pre-existing data.
Secondary data does not permit the progression from formulating a research
question to designing methods to answer that question. It is also not feasible for a
secondary data analyst to engage in the habitual process of making observations
and developing concepts. These limitations hinder the ability of the researcher to
focus on the original research question.

Data quality is always a concern because its source may not be trusted. Even data
from official records may be unreliable because the data is only as good as the
records themselves, in terms of methodological validity and reliability.
 Furthermore, in the case of qualitative material, primary researchers are often
reluctant to share “their less-than-polished early and intermediary materials, not
wanting to expose false starts, mistakes, etc.” [1].

So overall, there are six questions that a secondary analyst should be able to
answer about the data they wish to analyze.

1. What were the agency's or researcher's goals when collecting the data?

2. What data was collected and what is it supposed to measure?

3. When was the data collected?

4. What methods were used? Who was responsible and are they available for
questions?

5. How is the data organized?

6. What information is known about the success of that data collection? How
consistent is the data with data from other sources?

Primary Data & Secondary Data - Presentation Transcript

1. Primary and Secondary Data Interview Experiment Survey

2. Secondary Data
o Pre-existing data not gathered for purposes of the current research
o Not ‘new’ data – ‘second hand’
o Secondary data
o ‘ Back up’ data – secondary in use
3.
 o Data gathered by another source (e.g. research study, survey,
interview)
o Secondary data is gathered BEFORE primary data. WHY?
o Because you want to find out what is already known about a subject
before you decline into your own investigation. WHY?
o Because some of your questions can possibly have been already
answered by other investigators or authors.
4. Advantages and Disadvantages
o Advantages
o Resource implications – usually easier to gather than primary data
o Unobtrusive – already collected
o Longitudinal study may be possible
o Quality and permanence of data – eg. government surveys
o Disadvantages
o Suitability
o Cost and access – may still be difficult in spite of resource
advantages
o Validity of some secondary data (eg. Internet sources)
5. Primary Data
o Data never gathered before.
o Advantage: find data you need to suit your purpose
o Disadvantage: usually more costly and time consuming than
collecting secondary data
o Collected after secondary data is collected
6. Types of Primary Data
 o Demographic/Socioeconomic
 Age, Sex, Income, Marital Status, Occupation
o Psychological/Lifestyle
 Activities, Interests, Personality Traits
o Attitudes/Opinions
 Preferences, Views, Feelings, Inclinations
o Awareness/Knowledge
 Facts about product, features, price, uses
o Intentions
 Planned or Anticipated Behavior
o Motivations
 Why People Buy (Needs, Wants, Wishes, Ideal-Self)
o Behavior
 Purchase, Use, Timing, Traffic Flow
7. Primary Data Can Be Gathered By:
o Communication Methods
 Interacting with respondents
 Asking for their opinions, attitudes, motivations,
characteristics
o Observation Methods
 No interaction with respondents
 Letting them behave naturally and drawing conclusions from
their actions
8. Communication Methods of Primary Data Collection
o Methods include:
 Surveys
  Focus Groups
 Panels
o Highly versatile in terms of types of data
o Generally more speedy
o Typically more cost effective
 Electronic media have made observation cheaper
 Activities, Interests, Personality Traits
9. Pros and Cons of Telephone as a Data Collection Method
o Relatively fast
o Relatively strong response rates, but getting worse
o Sequence of questions can be easily changed
o Data entry at time of completion is possible
o Ability of supervisor to oversee interviewers
o Does not handle long interviews well
o Cannot use visuals
o Difficult to contact business respondents
o Unlisted numbers make sample frame questionable
10. Pros and Cons of Mail as a Data Collection Method
o Easy to generate stratified sample frame
o No interviewer bias
o Assures anonymity of respondent
o Wide distribution
o Best for sensitive or personal questions
o Generally least expensive
o Little control over exactly who completes survey
 o Low response rate
o Long response time
o No ability to probe on open-ended questions
o Cannot change sequence of questions
11. Sampling Techniques
o Population - total group of respondents that the researcher wants to
study. Populations are too costly and time consuming to study in entirety.

Sample - selecting and surveying respondents (research participants) from the

population.

12. Sampling Techniques

o A probability sample is one that gives every member of the population
a known chance of being selected.
 simple random sample - anyone
 stratified sample - different groups (ages)
 cluster sample - different areas (cities)
o All are selected randomly.
13. Sampling Techniques
o A non-probability sample is an arbitrary grouping that limits the use of
some statistical tests. It is not selected randomly.
o convenience sample - readily available
o quota sample - maintain representation
14. Personal Interviews as a Data Collection Method (in-home and mall intercept)
o Probably highest response rate
o Allows any type of questions/questionnaires
o Easy to ensure representative sample
 o Know who is completing questionnaire
o Mall intercept can be relatively quick
o Generally narrow distribution
o Typically most expensive method
o Often tough to gain identity of respondent
o Can be time consuming in the case of in-home
o Tough to supervise
15. Constructing the Questionnaire
o Select the correct types of questions:
o open ended – harder to score but get “richer” information
o closed ended, dichotomous – offer two either/or responses (true/false;
yes/no; for/against
o multiple choice – select one or more than one
o scaled response – gather range of “values” (strongly disagree,
somewhat disagree, neutral, somewhat agree, strongly agree
16. 1. Have you had any of the following medical preventive tests/exams?
o _____ mammogram (if a women)
o _____ prostate exam (if a man)
o _____ lung x-ray
o _____ electrocardiogram
o _____ stress test
17. 2. Do you currently smoke? _____ YES _____ NO
18.
o Please evaluate the following statement:
 o I understand the University’s code of conduct as it relates to
plagiarism.
o ____ absolutely agree
o ____ somewhat agree
o ____ neutral
o ____ somewhat disagree
o ____ absolutely disagree
19. Important characteristics of good questionnaires
o Plan a user-friendly format
o Gather demographic data – age, gender, etc., when necessary.
o Guarantee anonymity
o Ensure ease of tabulation – Scantron forms
o Ask well-phrased and unambiguous questions that can be answered
o Develop for completeness – get all the data
o Pilot test the instrument
20. Example Questionnaire
21. Electronic Media as a Data Collection Method (email, online, fax)
o Typically low cost, especially marginal cost of additional responses
o Wide distribution possible
o Very quick (15 minutes-2 days)
o Fairly decent response rates
o Easy point-of-purchase feedback
o Automatic data entry
o Limited sample frame
 representative
  ability to locate
o Expense of infrastructure and expertise
o SPAM backlash
o Legal problems
22. Increasing Response Rates for Communication Methods
o Pre-notification letters
o Cover letters/purpose statements
o Incentives
 Money
 Donations to charity
 Gifts
o Postage-paid returns
23. Observation Methods: What Can Be Observed?
o Physical Actions
o Verbal Behaviors
o Expressive behaviors
o Special Relations and Locations
o Temporal Patterns
o Physical Evidence
24. Primary Research Methods
o Focus Groups – bring together respondents with common
characteristics
o Observation - actually view respondents
o Experiment - controlled variables and respondent groups.
o Non-personal survey – on site, telephone, mail, fax, computer, panel
 o Personal interview - one-on-one survey with respondents
o Company records – internal document survey research
25. THANKYOU

Growth-share matrix

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The BCG matrix (aka B.C.G. analysis, BCG-matrix, Boston Box, Boston Matrix,
Boston Consulting Group analysis) is a chart that had been created by Bruce
Henderson for the Boston Consulting Group in 1968 to help corporations with
analyzing their business units or product lines. This helps the company allocate
resources and is used as an analytical tool in brand marketing, product
management, strategic management, and portfolio analysis. [1]

Contents

[hide]

 1 Chart
 2 Practical use of the BCG Matrix
o 2.1 Relative market share
o 2.2 Market growth rate
o 2.3 Critical evaluation
o 2.4 Alternatives
 3 Other uses
 4 Drawbacks
  5 References
 6 See also
 7 External links

[edit] Chart

BCG Matrix

To use the chart, analysts plot a scatter graph to rank the business units (or
products) on the basis of their relative market shares and growth rates.
 Cash cows are units with high market share in a slow-growing industry.
These units typically generate cash in excess of the amount of cash needed
to maintain the business. They are regarded as staid and boring, in a
"mature" market, and every corporation would be thrilled to own as many as
possible. They are to be "milked" continuously with as little investment as
possible, since such investment would be wasted in an industry with low
growth.
 Dogs, or more charitably called pets, are units with low market share in a
mature, slow-growing industry. These units typically "break even", generating
barely enough cash to maintain the business's market share. Though owning
a break-even unit provides the social benefit of providing jobs and possible
synergies that assist other business units, from an accounting point of view
such a unit is worthless, not generating cash for the company. They depress
a profitable company's return on assets ratio, used by many investors to
judge how well a company is being managed. Dogs, it is thought, should be
sold off.
 Question marks (also known as problem child) are growing rapidly and thus
consume large amounts of cash, but because they have low market shares
they do not generate much cash. The result is a large net cash
consumption. A question mark has the potential to gain market share and
become a star, and eventually a cash cow when the market growth slows. If
the question mark does not succeed in becoming the market leader, then
after perhaps years of cash consumption it will degenerate into a dog when
the market growth declines. Question marks must be analyzed carefully in
order to determine whether they are worth the investment required to grow
market share.
  Stars are units with a high market share in a fast-growing industry. The hope
is that stars become the next cash cows. Sustaining the business unit's
market leadership may require extra cash, but this is worthwhile if that's what
it takes for the unit to remain a leader. When growth slows, stars become
cash cows if they have been able to maintain their category leadership, or
they move from brief stardom to dogdom.[citation needed]

As a particular industry matures and its growth slows, all business units become
either cash cows or dogs. The natural cycle for most business units is that they
start as question marks, then turn into stars. Eventually the market stops growing
thus the business unit becomes a cash cow. At the end of the cycle the cash cow
turns into a dog.

The overall goal of this ranking was to help corporate analysts decide which of their
business units to fund, and how much; and which units to sell. Managers were
supposed to gain perspective from this analysis that allowed them to plan with
confidence to use money generated by the cash cows to fund the stars and,
possibly, the question marks. As the BCG stated in 1970:

Only a diversified company with a balanced portfolio can use its strengths to
truly capitalize on its growth opportunities. The balanced portfolio has:

 stars whose high share and high growth assure the future;
 cash cows that supply funds for that future growth; and
 question marks to be converted into stars with the added funds.

[edit] Practical use of the BCG Matrix

For each product or service, the 'area' of the circle represents the value of its sales.
The BCG Matrix thus offers a very useful 'map' of the organization's product (or
service) strengths and weaknesses, at least in terms of current profitability, as well
as the likely cashflows.

The need which prompted this idea was, indeed, that of managing cash-flow. It was
reasoned that one of the main indicators of cash generation was relative market
share, and one which pointed to cash usage was that of market growth rate.

Derivatives can also be used to create a 'product portfolio' analysis of services. So

Information System services can be treated accordingly. [citation needed]

[edit] Relative market share

This indicates likely cash generation, because the higher the share the more cash
will be generated. As a result of 'economies of scale' (a basic assumption of the
BCG Matrix), it is assumed that these earnings will grow faster the higher the
share. The exact measure is the brand's share relative to its largest competitor.
Thus, if the brand had a share of 20 percent, and the largest competitor had the
same, the ratio would be 1:1. If the largest competitor had a share of 60 percent;
however, the ratio would be 1:3, implying that the organization's brand was in a
relatively weak position. If the largest competitor only had a share of 5 percent, the
ratio would be 4:1, implying that the brand owned was in a relatively strong
position, which might be reflected in profits and cash flows. If this technique is used
in practice, this scale is logarithmic, not linear.

On the other hand, exactly what is a high relative share is a matter of some debate.
The best evidence is that the most stable position (at least in Fast Moving
Consumer Goods FMCG markets) is for the brand leader to have a share double
that of the second brand, and triple that of the third. Brand leaders in this position
tend to be very stable—and profitable; the Rule of 123. [2]

The reason for choosing relative market share, rather than just profits, is that it
carries more information than just cash flow. It shows where the brand is positioned
against its main competitors, and indicates where it might be likely to go in the
future. It can also show what type of marketing activities might be expected to be
effective.[citation needed]

[edit] Market growth rate

Rapidly growing in rapidly growing markets, are what organizations strive for; but,
as we have seen, the penalty is that they are usually net cash users - they require
investment. The reason for this is often because the growth is being 'bought' by the
high investment, in the reasonable expectation that a high market share will
eventually turn into a sound investment in future profits. The theory behind the
matrix assumes, therefore, that a higher growth rate is indicative of accompanying
demands on investment. The cut-off point is usually chosen as 10 per cent per
annum. Determining this cut-off point, the rate above which the growth is deemed
to be significant (and likely to lead to extra demands on cash) is a critical
requirement of the technique; and one that, again, makes the use of the BCG
Matrix problematical in some product areas. What is more, the evidence, [2] from
FMCG markets at least, is that the most typical pattern is of very low growth, less
than 1 per cent per annum. This is outside the range normally considered in BCG
Matrix work, which may make application of this form of analysis unworkable in
many markets.[citation needed]
Where it can be applied, however, the market growth rate says more about the
brand position than just its cash flow. It is a good indicator of that market's strength,
of its future potential (of its 'maturity' in terms of the market life-cycle), and also of
its attractiveness to future competitors. It can also be used in growth analysis. [citation
needed]

[edit] Critical evaluation

The matrix ranks only market share and industry growth rate, and only implies
actual profitability, the purpose of any business. (It is certainly possible that a
particular dog can be profitable without cash infusions required, and therefore
should be retained and not sold.) The matrix also overlooks other elements of
industry. With this or any other such analytical tool, ranking business units has a
subjective element involving guesswork about the future, particularly with respect to
growth rates. Unless the rankings are approached with rigor and scepticism,
optimistic evaluations can lead to a dot com mentality in which even the most
dubious businesses are classified as "question marks" with good prospects;
enthusiastic managers may claim that cash must be thrown at these businesses
immediately in order to turn them into stars, before growth rates slow and it's too
late. Poor definition of a business's market will lead to some dogs being
misclassified as cash bulls.

As originally practiced by the Boston Consulting Group, [2] the matrix was
undoubtedly a useful tool, in those few situations where it could be applied, for
graphically illustrating cashflows. If used with this degree of sophistication its use
would still be valid. However, later practitioners have tended to over-simplify its
messages. In particular, the later application of the names (problem children, stars,
cash cows and dogs) has tended to overshadow all else—and is often what most
students, and practitioners, remember.

This is unfortunate, since such simplistic use contains at least two major problems:

'Minority applicability'. The cashflow techniques are only applicable to a very limited
number of markets (where growth is relatively high, and a definite pattern of
product life-cycles can be observed, such as that of ethical pharmaceuticals). In the
majority of markets, use may give misleading results.

'Milking cash bulls'. Perhaps the worst implication of the later developments is that
the (brand leader) cash bulls should be milked to fund new brands. This is not what
research into the FMCG markets has shown to be the case. The brand leader's
position is the one, above all, to be defended, not least since brands in this position
will probably outperform any number of newly launched brands. Such brand
leaders will, of course, generate large cash flows; but they should not be `milked' to
such an extent that their position is jeopardized. In any case, the chance of the new
brands achieving similar brand leadership may be slim—certainly far less than the
popular perception of the Boston Matrix would imply.

Perhaps the most important danger[2] is, however, that the apparent implication of
its four-quadrant form is that there should be balance of products or services
across all four quadrants; and that is, indeed, the main message that it is intended
to convey. Thus, money must be diverted from `cash cows' to fund the `stars' of the
future, since `cash cows' will inevitably decline to become `dogs'. There is an
almost mesmeric inevitability about the whole process. It focuses attention, and
funding, on to the `stars'. It presumes, and almost demands, that `cash bulls' will
turn into `dogs'.
The reality is that it is only the `cash bulls' that are really important—all the other
elements are supporting actors. It is a foolish vendor who diverts funds from a
`cash cow' when these are needed to extend the life of that `product'. Although it is
necessary to recognize a `dog' when it appears (at least before it bites you) it would
be foolish in the extreme to create one in order to balance up the picture. The
vendor, who has most of his (or her) products in the `cash cow' quadrant, should
consider himself (or herself) fortunate indeed, and an excellent marketer, although
he or she might also consider creating a few stars as an insurance policy against
unexpected future developments and, perhaps, to add some extra growth. There is
also a common misconception that 'dogs' are a waste of resources. In many
markets 'dogs' can be considered loss-leaders that while not themselves profitable
will lead to increased sales in other profitable areas.

[edit] Alternatives

As with most marketing techniques, there are a number of alternative offerings

vying with the BCG Matrix although this appears to be the most widely used (or at
least most widely taught—and then probably 'not' used). The next most widely
reported technique is that developed by McKinsey and General Electric, which is a
three-cell by three-cell matrix—using the dimensions of `industry attractiveness'
and `business strengths'. This approaches some of the same issues as the BCG
Matrix but from a different direction and in a more complex way (which may be why
it is used less, or is at least less widely taught). Perhaps the most practical
approach is that of the Boston Consulting Group's Advantage Matrix, which the
consultancy reportedly used itself though it is little known amongst the wider
population.

[edit] Other uses

The initial intent of the growth-share matrix was to evaluate business units, but the
same evaluation can be made for product lines or any other cash-generating
entities. This should only be attempted for real lines that have a sufficient history to
allow some prediction; if the corporation has made only a few products and called
them a product line, the sample variance will be too high for this sort of analysis to
be meaningful.

[edit] Drawbacks

The growth-share matrix once was used widely, but has since faded from popularity
as more comprehensive models have been developed. Some of its weaknesses
are: • Market growth rate is only one factor in industry attractiveness, and relative
market share is only one factor in competitive advantage. The growth-share matrix
overlooks many other factors in these two important determinants of profitability. •
The framework assumes that each business unit is independent of the others. In
some cases, a business unit that is a "dog" may be helping other business units
gain a competitive advantage. • The matrix depends heavily upon the breadth of
the definition of the market. A business unit may dominate its small niche, but have
very low market share in the overall industry. In such a case, the definition of the
market can make the difference between a dog and a cash cow. While its
importance has diminished, the BCG matrix still can serve as a simple tool for
viewing a corporation's business portfolio at a glance, and may serve as a starting
point for discussing resource allocation among strategic business units.

[edit] References

1. ^ About BCG: http://www.bcg.com/about_bcg/history/history_1968.aspx

2. ^ a b c d the Rule of 123
[edit] See also

 Boston Consulting Group's Advantage Matrix

 Cash cow
 G.E. Multi Factoral analysis
 Marketing
 New Product Development
 Product life cycle management
 Product-Market Growth Matrix
 Product management
 Strategic management

[edit] External links

 Mercer, D, A Two Decade Test of Product Life Cycle Theory pp 269-274,

British Journal of Management, Vol. 4 (1993)

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