McDaniel&Gates–MarketingResearch,12thEdition Instructor’sManual

Copyright?2021JohnWiley&Sons,Inc. 2-

CHAPTER2

SecondaryData:APotentialBigDataInput

LEARNINGOBJECTIVES

1.Understandtheadvantagesanddisadvantagesofsecondarydata.

2.Comprehenddataminingandbehavioraltargeting.

3.LearnaboutthegrowthofBigData.

4.Understandgovernmentactionsinconsumerpricing.

KEYTERMS

Behavioraltargeting

Firstpartydata

Internaldatabase

Passivedatacollection

Primarydata

Secondarypartydata

Thirdpartydata

CHAPTERSUMMARY

Thischapterexaminesthemanysourcesofsecondarydata.Italsoexploreswaystomanagethatdata.Theadvantagesanddisadvantagesofsecondarydata.Databasesthatareinternalandexternaltothecompanycanprovidesomeofthemostusefulinformationneededtomakegoodmarketingdecisions.

Thechapterdiscussesdataminingandtheimportanceofdiscoveringpatternswithinadatabasethathavemarketingimplications.Someofthisinformationisinternal,createdwithinthecompany,suchassalesreportsandcustomerrecords.Otherdataisexternaltothecompanythereisawealthofinformationpublishedbyseveralentities,suchasthegovernmentandcompanieslikeAcxiom.BehavioraltargetingandBigDataAnalyticsarediscussed.BigDatagivesmarketerstheabilitytoanalyzeanddiscoverconsumerbehavioralpatternsinextremelylargedatabases.

Thechapterdiscussesusing“BigData”tounderstandaconsumer’shabits,demographics,andsocialnetworksinordertoincreasetheeffectivenessofonlineadvertising,asubjectcalledbehavioraltargeting.BigDataistheaccumulationandanalysisofmassivequantitiesofinformationthatisespecially,butnotexclusively,relatedtohumanbehaviorandinteractions.

Finally,thechapterdiscussestheprivacyimplicationsofBigData.Aspartofthatdiscussion,itcoversfederallaws,theFederalTradeCommission,stateprivacylaws,andtheGeneralDataProtectionRegulation(EuropeanUnion).

QUESTIONSFORREVIEWANDCRITICALTHINKING

Whyshouldcompaniesconsidercreatingabigdatadatabase?Namesometypesofinformationthatmightbefoundinthisdatabaseandsourcesofthisinformation.

Bigdatadatabasesareanexcellentwaytoidentifyandclassifycustomersandtomonitortheirpurchases.Thisgivesthefirmtheabilitytotargettheirmarketofferingmoreeffectively.Thetypesofinformationthatmightbeinthedatabaseincludethecustomerdemographics,includingnames,addresses,telephonenumbers,age,income,familymembers’namesandages,andpreferences,aswellaspurchasehistory.Potentialcustomers’namesmightalsobelistedwithasmuchdemographicinformationasisavailable.Thisinformationmaycomefromseveralsources,includingsalesrecords,salescallreports,creditapplications,registrationsfor“clubs,”customerpaneldata,registrationsforgiftsandprizes,andfromfinancial/accountingdata.

WhyhasbigdataanalyticsbecomesopopularwithfirmslikeUnitedAirlines,AmericanExpress,andFordMotorCompany?

Allmajorfirmscollectdatarelatedtocustomershopping,transactions,andcustomerservicefeedback.BigDataanalyticsusesstatisticalandothermathematicalsoftwaretoolstodiscovernon-obviouspatternsofpreferenceandbehaviorthatmightbehiddeninthesedatabases.Theobjectiveofthisanalysisistoidentifyinformationthatmarketerscanusetoformulatestrategiesandtacticstoincreasethefirm’ssalesandprofitability.

Ithasbeensaidthatbigdataanalyticsturnsthescientificmethodonitshead.Whatdoesthismean?

Traditionally,marketingresearchhasstartedwithproblemrecognition,welldefinedproblemsandmethodsofcollectingdatainwhichthemarketresearcherhasalotofcontrolover.Thedataisputneatlyintorowsandcolumnsinastatisticaldatabase,andthemarketresearchercananalyzethoserelationshipsdefinedbytheresearchstudyobjectives.Withbigdataanalytics,however,theprocessismorediscoveryoriented.Thesoftwarecananalyzedatapatternsinthedatabaseandutilizedatainaforminwhichwasnotpossiblewithtraditionalstatisticalanalysis.

Whyaresecondarydataoftenpreferredtoprimarydata?

Secondarydataarealreadycollected,soaccessshouldbemuchfaster.Secondarydatashouldbelesscostlytoobtainthanprimarydata.Insomecases,aswheninvestigatinghistoricalevents,secondarydataisallthatispossibletoobtain.

Whatpitfallsmightaresearcherencounterinusingsecondarydata?

Theremaybealackofavailabilityofsecondarydata,orthedatathatisavailablemightlackcurrency,relevance,oraccuracy.Finally,theavailablesecondarydatamightbeinsufficienttohelpthemanagertomakeanaccuratedecision.

Whyhasbehavioraltargetingbecomesopopularwithmarketers?Whyisitcontroversial?

AstheInternethasmatured,non-targetedadvertisinghasdecreasedinefficiency.Onestudyfoundthatonly4percentofInternetusersaccountfor67percentofalldisplayadclicks.AnotherrecentstudybyDoubleClickreportedanaverageclick-throughrateofjust0.1percent.Behavioraltargethasraisedsomeissueoverconsumerprivacy,makingitcontroversialinsomecases.

Intheabsenceofcompanyproblems,isthereanyneedtoconductmarketingresearchorusemarketinganalytics?

Thedefinitionofmarketingresearchstatesthatinformationiscollectednotonlytohelpfindsolutionstoexistingproblems,butalsotoidentifyopportunities.Therefore,thereisnoenterprisethatcannotbenefitfrommarketingresearch.Marketinganalyticscanprovidetheinformationthatisneededtoidentifythoseopportunities.And,younevercantell:justbecauseyoudon’thaveaproblemtodaydoesnotmeanthatyouwon’thaveonetomorrow.Then,marketinganalyticscouldbeinvaluable.

DoyouthinkthatGDPRgoestoofarinregulatingnon-EUfirms?Arethefinestoolarge?

Studentopinionswillvarygreatlyonthisquestion.IfyouhavestudentsfromtheEU,thismightbeagoodin-classdiscussiontopic.

Dividetheclassintogroupsoffourorfive.EachteamshouldgototheInternetandlookupmarketinganalytics.EachteamshouldthenreporttotheclassonhowaspecificcompanyiseffectivelyusingBigDatatoimprovetheirmarketingefficiency.(TeamExercise)

Theinformationisavailablebutstudentanswerswillvarygreatly.

WORKINGTHENET

Goto

www.A

andexplainwhattheydo.Whyaretheirservicesvaluabletomanyfirms?

Aysadiprovidesasoftwaresystemofanalysisthatcanevaluateandanalyzeconversationsandothertypesofdatathatformerlycouldnotbeanalyzedbystatisticalsoftware.Suchamethodmakesthedataavailableandunderstandabletoallusers,insteadofmerelypeoplewithadvancedstatisticaltraining.

GototheNationalOpinionResearchCenteratanddescribewhatnewreportsareavailableforresearchers.

Justasampleofsomeofthereportsandstudiesavailableinclude:Economics,Labor,andPopulationstudies;EducationandChildDevelopment;HealthSurvey,Program,andPolicyResearchStatisticsandMethodology;SubstanceAbuse,MentalHealth,andCriminalJustice;TheNationalSocialLife,Health,&AgingProject(NSHAP);EvaluationofRacialandEthnicApproachestoCommunityHealth;MeasuringCustomerSatisfactionwiththeMedicareTelephoneSystem;MedicarePolicyAnalyses;TheNationalSocialLife,Health,&AgingProject;TheResidentialEnergyConsumptionSurvey(RECS);SecondLongitudinalStudyofAging;UnderstandingtheHealthCareExperiencesofMinorityPopulationswithMultipleSclerosis;andAPopulation-BasedStudyoftheImportanceofRelationshipsinHealthyAging.

Goto

.Watchtheirvideoandexplaintotheclasswhatthefirmoffers.

Tableaumakessoftwarethathelpspeopletounderstandtheirdataandgivesthemtheopportunitiestoadvance.Theirproductsaretransformingthewaypeopleusedatatosolveproblems.Thissoftwaremakesanalyzingdatafastandeasywhetherfordiseaseresearch,educationpatterns,industrialefficiency,patientcare,governmentspendingandsoon.

Goto:https://gdpr-info.eu/andexplainwhyscholarsclaimthatthisisthemostpowerfulprivacyregulationintheworld.WhatactionshavetheytakenrecentlyagainstfirmsthathaveviolatedGDPRregulations?DoyouthinkthattheGDPRisfairorunfairtosmallfirms?Why?

Studentanswerswillvary.

AccordingtoGDPRAssociates(

https://www.gdpr.associates/why-is-gdpr-so-important/

)“TheGeneralDataProtectionRegulationcameintoforceinMay2018,andwill,webelieve,changebusinessesviewofpersonaldataforever.ItcomeswithitfinancialpenaltiesandinsomecasespersonalDirectorliabilities-somethingnoneofuscantakelightly.WhilstthepredecessortotheUK’sDataProtectionAct(2018)lackbite,thiscertainlyisn’tthecasewithGDPR.”

AccordingtoVisma(

/gdpr/why-is-gdpr-important/

),“GDPRisfirstofalldemandingduetoitsdetailedtransparencyrequirements.Anycompanyaswellasotherbodiesthatprocesspersonaldata,isalsotoalargeextentrequiredtodocumenttheprocessing,ensurethelawfulnessofprocessing,documenttheexistenceofsufficientprocedures,provideinformationonsecuritymeasuresandtoensurethatsufficientdataprocessingagreementsareinplace.GDPRisimportantbecauseitimprovestheprotectionofeuropeandatasubjects’rightsandclarifieswhatcompaniesthatprocesspersonaldatamustdotosafeguardtheserights.”

AgrowinglistofGDPRfinescanbefoundat

/wiki/GDPR_fines_and_notices

.Asofthiswriting(May18,2020),thereare34entries.Thelargestisa€50millionfineonGoogleLLCfor“Insufficienttransparency,control,andconsentovertheprocessingofpersonaldataforthepurposesofbehavioraladvertising.”

SmallbusinessesarenotexemptfromGDPR.AnybusinessthatcollectspersonaldatafromapersonlocatedintheEUissubjecttotheGDPR,nomattertheirsize.Naturally,theburdenofcomplyingwithGDPRismuchgreater,proportionallyspeaking,onsmallbusinesses.

REAL-LIFERESEARCH

2.1TheGDPRandAmericanSmallBusiness

UnderGDPR,itisillegalforasmallbusinesstotakesomeone’scontactinformationfromabusinesscardoraLinkedInconnection’scontactdetailsandaddingthisinformationtothefirm’sdatabasewithouthis/herdirectconsent.Receivingsomeone’scontactinformationdoesn’timplyconsent.Whatisyouropinionofthisrule?

Studentopinionswillvary.Manyoftheyoungerstudentshavelikelyneverevenconsideredthisquestion.

TheUnitedStatesdoesnothaveafederallawliketheGDPR.Doyouthinkthats