Business Degree Certification Practice Test

Why might a firm choose secondary data over primary data in marketing research?

1. secondary data usually cost less

2. secondary data are usually more accurate

3. primary data are usually non specific

4. primary data are likely to be outdated

The correct answer is: secondary data usually cost less

A firm might choose secondary data over primary data primarily because secondary data usually cost less. Collecting primary data typically involves conducting new research activities, such as surveys or experiments, which can require significant resources and time. This can lead to higher costs associated with designing the study, recruiting participants, and collecting and analyzing the data. In contrast, secondary data consists of information that has already been collected and is available for use, often at a lower cost. This can include data from industry reports, academic studies, government publications, or existing databases, making it a more economical option for firms looking to gather insights quickly and efficiently. While considerations about accuracy and specificity play a role in the choice of data, they do not negate the cost advantages of secondary data. Also, while primary data collection can occasionally lead to outdated findings if the market changes rapidly, this is not a defining reason to choose secondary data, as outdated secondary data can also pose similar issues. Therefore, the factor of cost efficiency stands out as a compelling reason for firms when deciding between secondary and primary data for their marketing research.