Chapter 4: Secondary Data and Databases

Multiple Choice
1. Which of the following is not characteristic of secondary data?
a. observation data collected for the project at hand
b. might be relevant to the problem at hand
c. gathered previously for another purpose
d. (b) and (c)
e. All are characteristic of secondary data.

Ans: A
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

2. Which of the following would not be a source of internally generated secondary

data?
a. reports to stockholders
b. government documents
c. product testing results
d. annual reports
e. all of the above are internally generated data

Ans: B
Difficulty: Hard
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

3. Which of the following is not a source of externally generated secondary data?

a. syndicated marketing research data
b. news media reports
c. Web-based reports
d. salesperson strategic intelligence reports
e. All of the above are externally generated data.

Ans: D
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data

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Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

4. USA Today conducted a poll which found that 84% of the persons responding to
the poll indicated they had changed in some significant way since 9/11. This type
of data would be considered which of the following?
a. internally generated secondary data
b. internally generated primary data
c. externally generated secondary data
d. externally generated primary data
e. none of the above

Ans: C
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

5. When comparing the collection of secondary data with primary data, secondary
data relative to primary data:
a. takes less time to collect.
b. costs less to collect.
c. is more convenient.
d. all of the above
e. none of the above

Ans: D
Difficulty: Easy
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

6. Which of the following is not an advantage of secondary data?

a. Secondary data can help clarify the research problem.
b. Secondary data may provide a solution to the problem.
c. Secondary data may provide the sample frame.
d. All of the above are advantages of secondary data.

Ans: D
Difficulty: Medium
Response: See page 90-92

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Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

7. A marketing researcher wants to know what percentage of consumers would

purchase a car that has not yet been produced. She would likely have a hard time
finding secondary data to address this due to __________.
a. lack of availability
b. lack of relevance
c. inaccuracy
d. insufficiency
e. none of the above

Ans: A
Difficulty: Medium
Response: See page 92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

8. A market researcher was negotiating with a client concerning the best way to
accomplish the client’s objectives. The researcher discovered a study, which had
some circumstances similar to that of the present client. Which of the following
best describes what happened?
a. Secondary data provided primary research alternatives.
b. Secondary data actually provided the solution to the problem.
c. Secondary data helped to clarify the problem.
d. Secondary data provided necessary background information.
e. none of the above

Ans: A
Difficulty: Medium
Response: See page 91
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

9. Which of the following is not a limitation of secondary data?

a. takes more time to collect than primary data
b. may lack relevance for the present study
c. may not be available in the form needed for the present study
d. may not be accurate
e. All of the above are possible limitations of secondary data.

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Ans: A
Difficulty: Easy
Response: See pages 92-93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

10. Which of the following would be the least reliable source of secondary data?
Data compiled by_______.
a. the Federal Government
b. a University Bureau of Business & Economic Research
c. a major trade association
d. city’s Chamber of Commerce
e. All of the above are equally reliable.

Ans: D
Difficulty: Easy
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

11. Suppose a market researcher was consulting several sources of information about
the best location for a high-end furniture store, and found the following:

Percent of Luxury Purchases

2010 2011
City Census of Retailing Chamber of Commerce
Metropolis 5% 12%
Smallville 7% 17%
Gotham City 4% 10%

The Chamber studies were more recent, but how reliable is this new information?
Why should the researcher question the numbers in the Chamber studies?
a. age of the Chamber studies
b. how the information was collected
c. consistency of the Chamber information with the Census
d. sufficiency of the information collected
e. purpose of the study

Ans: C
Difficulty: Hard
Response: See page 93

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Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

12. A researcher does a study for a new Super Target store. The client wants to know
which of five cities should be selected, and a specific location within the city of
choice. The researcher investigates several sources of secondary data and finds
the following:

City Population Growth Growth in Retail Sales

Metropolis 5% 14%
Smallville 7% 13%
Gotham City 4% 8%
The Big Apple 2% 4%
The Big Easy 10% 17%

The researcher, based on the information at hand, recommends The Big Easy, and
asks to be paid. Why should the client not pay the researcher?
a. the information not collected in a timely manner
b. not enough information provided
c. how the information was collected
d. what information was collected
e. none of the above

Ans: B
Difficulty: Hard
Response: See page 93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

13. Jiffy Lube keeps records of its customers and notifies them when it is time for an
oil change. This is an example of _______.
a. an internal database
b. data mining
c. URL marketing
d. database marketing
e. none of the above

Ans: D
Difficulty: Easy
Response: See page 95
Ref: Internal Databases
Learning Objective 4.1: To understand how firms create an internal database.

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14. What type of company could most easily compile a large internal database?
a. CPG, such as Kellogg’s
b. service, such as Delta Airlines
c. Online, such as Yahoo
d. entertainment, such as Universal

Ans: C
Difficulty: Medium
Response: See page 95-96
Ref: Internal Databases
Learning Objective 4.5: To understand the role of the internet in obtaining
secondary data.

15. Database marketing is sometimes referred to as ____________.

a. macromarketing
b. niche marketing
c. micromarketing
d. none of the above

Ans: C
Difficulty: Hard
Response: See page 95
Ref: Internal Databases
Learning Objective 4.1: To understand how firms create an internal database

16. Which of the following would not be part of a database that would be ripe for data
mining?
a. electronic point-of-sale transactions
b. inventory records
c. online customer orders
d. customer demographics
e. All of the above could be part of the data mining process.

Ans: E
Difficulty: Hard
Response: See pages 98
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

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17. American Express regularly stuffs its monthly statements with combinations of
products depending upon customer characteristics. This data mining application
is referred to as _______.
a. customer retention
b. customer abandonment
c. market basket analysis
d. customer acquisition
e. none of the above

Ans: C
Difficulty: Medium
Response: See pages 99
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

18. If you were interested in finding out how many people buy low-fat dog food for
their dogs, you would most likely seek out a(n) _______.
a. newsgroup
b. congressional information service
c. American statistical indexer
d. marketing research aggregator
e. none of the above

Ans: D
Difficulty: Medium
Response: See page 106
Ref: Internal Databases
Learning Objective 4.2: To learn about the advantages of creating a database from
Web site visitors.

19. Marketresearch.com is an example of a(n) _______.

a. marketing research aggregator
b. search engine
c. URL
d. cookie
e. none of the above

Ans: A
Difficulty: Medium
Response: See page 106
Ref: Internal Databases
Learning Objective 4.2: To learn about the advantages of creating a database from
Web site visitors.

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20. Database marketing has come under scrutiny based on the idea that it may
infringe on consumers’ ___________.
a. right to know
b. right to choose
c. right to privacy
d. right to not be deceived

Ans: C
Difficulty: Medium
Response: See page 100
Ref: Internal Databases
Learning Objective 4.1: To understand how firms create an internal database.

21. Which of the following websites would include the most credible data?
a. U.S. Census Bureau
b. local newspaper’s website
c. chamber of commerce website
d. an individual’s homepage

Ans: A
Difficulty: Easy
Response: See page 103
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

22. Mike’s Seafood is a very successful Cajun restaurant chain in south Louisiana.
How can a geographic information system (GIS) help the restaurant chain target
its best customers?
a. GIS can pinpoint exactly where the restaurant’s customer base is located,
even down to the specific neighborhood, which would greatly assist a
direct marketing effort.
b. The map technology creates a visual translation of DSS.
c. The map technology creates a visual translation of the URL.
d. It can pinpoint the target marketing without the need for primary data,
which makes it more cost effective.
e. all of the above

Ans: A
Difficulty: Hard
Response: See page 107
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems.

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23. Which of the following would normally not be the result of a GIS effort?
a. depicting overlapping territories of competing retailers
b. describing population trends from census to census
c. displaying the quickest local truck delivery routes
d. providing the best location for a branch bank
e. All could be assisted by GIS.

Ans: E
Difficulty: Medium
Response: See page 107-108
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems.

24. When you are not sure who gathered secondary data, its __________may be
questionable.
a. availability
b. relevance
c. accuracy
d. timeliness
e. none of the above

Ans: C
Difficulty: Medium
Response: See page 93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

25. Market basket analysis is a common application of _______.

a. GIS systems
b. blogs
c. cookies
d. data mining

Ans: D
Difficulty: Medium
Response: See page 99
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

26. A marketing database would be easiest to set up for which type of business?
a. traditional retailer

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 b. international retailer
c. online retailer
d. specialty retailer

Ans: C
Difficulty: Medium
Response: See page 90-92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

27. Which of the following is not a tool that is used in data mining?
a. probability sampling
b. qualitative analysis
c. multivariate statistics
d. descriptive statistics

Ans: B
Difficulty: Hard
Response: See page 98
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

28. What type of secondary data source would most likely charge a fee to access its
information?
a. government site
b. university site
c. market research aggregator site
d. search engine

Ans: C
Difficulty: Easy
Response: See page 106
Ref: Internal Databases
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

29. All of the following are advantages of secondary data except:

a. It can help clarify or redefine the problem during the exploratory research
process.
b. It may provide a solution to the problem.
c. It may provide primary data research method alternatives.

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 d. It may provide the necessary background information and build credibility for
the research report.
e. All of the above.

Ans: E
Difficulty: Easy
Response: See page 90-92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

30. Which question should be posed in determining the accuracy of secondary data?

a. What information was collected?

b. What was the purpose of the study?
c. Both a & b.
d. Neither a nor b.

Ans: C
Difficulty: Easy
Response: See page 93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

31. All of the following show how data mining has uses in marketing except:

a. Customer Retention
b. Customer Requirements
c. Customer Abandonment
d. Market Basket Analysis

Ans: B
Difficulty: Medium
Response: See page 98-99
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

32. Which of the following is a characteristic of a decision support system (DSS)?

a. Interactive
b. Flexible
c. Discovery-oriented

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 d. Easy to learn and use
e. All of the above are characteristics

Ans: E
Difficulty: Medium
Response: See page 109
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems.

True/False
33. Secondary data is more current than primary data.

Ans: False
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

34. Secondary data can sometimes solve a marketing problem.

Ans: True
Difficulty: Medium
Response: See page 90-91
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

35. Secondary data is previously gathered data that might be relevant to the problem
at hand.

Ans: True
Difficulty: Easy
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

36. Generally, the cost of collecting secondary data is about the same as the cost of
collecting primary data.

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Ans: False
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

37. Secondary data can sometimes be used as a sample frame.

Ans: True
Difficulty: Medium
Response: See page 92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

38. Traditionally, the starting point for the development of an internal database was
information from salespersons call reports.

Ans: True
Difficulty: Easy
Response: See page 944
Ref: Internal Databases
Learning Objective 4.1: To understand how firms create an internal database.

39. Most relationships explored in data mining are intuitively obvious.

Ans: False
Difficulty: Easy
Response: See page 98
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

40. Statistical techniques are often utilized in data mining.

Ans: True
Difficulty: Medium
Response: See page 98
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

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41. Most consumers will never give up personal information to marketers.

Ans: False
Difficulty: Medium
Response: See page 101
Ref: Internal Databases
Learning Objective 4.5: To understand the role of the Internet in obtaining
secondary data.

42. Data mining facilitates customer acquisition by discovering purchasing patterns

such that customized offerings can be made to prospects.

Ans: True
Difficulty: Hard
Response: See pages 97-98
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

43. Marketing research aggregators repackage research that has already been
conducted.

Ans: True
Difficulty: Medium
Response: See page 106
Ref: Internal Databases
Learning Objective 4.5: To understand the role of the Internet in obtaining
secondary data.

44. Secondary data is available for nearly every research question.

Ans: False
Difficulty: Easy
Response: See page 92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

45. There is sometimes a conflict between a company’s database marketing practices

and the consumer’s privacy.

Ans: True
Difficulty: Medium

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Response: See page 100-102
Ref: Internal Databases
Learning Objective 4.1: To understand how firms create an internal database.

46. The U.S. Census is an example of a marketing research aggregator.

Ans: False
Difficulty: Easy
Response: See page 106
Ref: Internal Databases
Learning Objective 4.5: To understand the role of the Internet in obtaining
secondary data.

47. Gathering secondary data is often an effective way to clarify a marketing problem.

Ans: True
Difficulty: Medium
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

48. A company may already possess secondary information.

Ans: True
Difficulty: Easy
Response: See page 90
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

49. A database could be created easier for a traditional store than for a Web retailer.

Ans: False
Difficulty: Hard
Response: See page 94-95
Ref: Internal Databases
Learning Objective 4.5: To understand the role of the Internet in obtaining
secondary data.

50. GIS analysts and geographers talk about lines, points, and polygons (areas), while
marketing researchers talk about roads, stores, and sales territories.

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Ans: True
Difficulty: Medium
Response: See page 108
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems

51. Several marketing research firms are paying people to participate in online
surveys, to track their click streams, or to evaluate Web sites.

Ans: True
Difficulty: Medium
Response: See page 105
Ref: Internal Databases
Learning Objective 4.6: To learn about types of information management systems

52. For example, a manager for Wal-Mart may have sufficient secondary data on
incomes, family sizes, number of competitors, and growth potential to determine
in which of five Iowa towns Wal-Mart wishes to locate its next store. And if
traffic counts exist for the selected town, primary data will have to be gathered to
select a specific site for the store.

Ans: False
Difficulty: Hard
Response: See page 93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

Essay Questions
53. Describe some of the important parts of an organization’s information
management system.

Ans: Some of the parts would be as follows:

Computerized data bases
Published secondary sources
Internal databases
Data management system to assimilate and coordinate data, and make it easily
accessible to managers in a user-friendly form
Provide a system of information that will facilitate managerial decision making
Difficulty: Medium
Response: See pages 94-95, 106-109

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Ref: Internal Databases, Information Management
Learning Objective 4.6: To learn about the types of information management
systems.

54. What are some of the advantages of secondary data? More specifically, what are
the advantages of secondary data over primary data?

Ans: Advantages of Secondary Data:

 Help clarify a problem during exploratory research
 May provide a solution to a problem
 Provide primary data research alternatives
 Provide background information
 Alert marketers to potential problems
Advantages over Primary Data:
Can be collected much more quickly
Costs are a fraction of the cost of acquiring primary data
Difficulty: Medium
Response: See pages 90-92
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

55. How can data mining assist the direct marketer that publishes a customized
catalog for its customers?

Ans: Data mining uses statistical and other advanced software to discover nonobvious
patterns hidden in a database. Hence, data mining can assists in two contexts:
First, data mining can evaluate the direct marketer’s own database, and search for
patterns of behavior, linking those patterns to demographic characteristics.
Hence, the direct marketer knows what their customers of certain product “look
like.” Second, data mining can also discern a market basket for customers with
certain demographic characteristics. Hence, given a particular demographic
profile, the direct marketer will be able to predict the combinations of items likely
to be bought. The result is that the direct marketer can do a much better job of
meeting the needs of target customers by offering combinations of products they
would be more likely to purchase.
Difficulty: Hard
Response: See pages 97-99
Ref: Internal Databases
Learning Objective 4.3: To become familiar with data mining.

56. An entrepreneur is contemplating establishing a funeral home in a small town.

This person believes the demand for funeral home services is greater than the

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 services being provided. Initially, the entrepreneur contacts a consultant and tells
the consultant he needs a community survey to determine the total demand for
funeral home services in the small town and surrounding communities. If you
were the consultant, how would you react to the entrepreneur’s request for a
survey? What kind of counter proposal would you make?

Ans: A survey would not be the best way to approach forecasting funeral home
demand. The consultant could find secondary data, probably from the Census,
that would yield death rates for the community in question, which could be
extrapolated for the population growth to yield an estimates of the number of
deaths in a particular geographic area.
Difficulty: Hard
Response: See pages 90-93
Ref: Nature of Secondary Data
Learning Objective 4.4: To understand the advantages and disadvantages of using
secondary data.

57. Describe a situation in which a geographic information could be used along with
secondary data.

Ans: There are many possibilities some of which are described on pages 107-108. One
example would be the location of a shopping center. A GIS could be loaded with
Census data and plotted by census tract to indicate changes in population and
income distribution. Then traffic flow information could be added to the maps to
highlight how people move about in an area.
Difficulty: Medium
Response: See pages 107-109
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems.

58. Describe a situation in which a marketing research aggregator could benefit a

client or marketing research supplier.

Ans: Marketing Research Aggregators provide a secondary market for marketing

research reports that have been previously produced for some other purpose.
Suppose a small company needed demand estimates for several products. An
aggregator might have access to studies involving such products without the
company having to contract for a number of expensive individual forecasts.
Difficulty: Medium
Response: See pages 106
Ref: Information Management
Learning Objective 4.6: To learn about types of information management systems.

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