3.1.2 – Types of Data and Purposes of Information
Types of Data
Qualitative
Information
Qualitative information is information which is not
quantitative, is based on qualities or characteristics and includes opinions
and impressions. For example this could be the image of a product, someone’s
feelings, and the design of a car.
An example of qualitative information in my business is the
name of products and the URL to the supplier’s website. Another example of this
is the names of customers and if they are a platinum customer or not.
Quantitative
Information
Quantitative information is information about quantity, it
can be quantified and is numerical and factual. For example it could be your
age, your height, and the size of a country.
An example of quantitative information is the price of shoes
on my business reports. Another example is the amount of money customers have
spent on my website.
Primary Data
Primary data is data in which you have gone and collected it
yourself, this could be taking surveys, experiments or an observation. In a
business it is data generated during the operations of the business. An
advantage of primary data is that you know you can trust it because you’ve
collected it yourself and it is also relevant. Disadvantages of this is that it
is time consuming and has a cost to it.
An example of this in my business is the number of items in
stock at the beginning of a day, to get this you would go and physically count
them .Another example of this is getting customer names on the phone yourself
to add to a customer list. Primary data is useful to specific businesses
because you can collect information such as best sellers.
Secondary Data
Secondary data is information that you have found out from
somewhere else, this could be watching television, using the internet and
reading books and newspapers .An example of this is finding out the cheapest
suppliers or highest quality suppliers. Disadvantages of secondary data are
that it could not be reliable or relevant to your need. Advantages of secondary
data are that it isn’t time consuming (usually) and usually isn’t as costly as
getting primary data.
An example of secondary data in my business reports are the
prices that people are supplying the shoes at. Another example is the brand
names of the products and also images of the product.
Purposes of Information
Operational
Support
Operational support is the use of information to help with
the day to day running of the business.
Monitoring is knowing what is going on, for example knowing how much
stock is there, how much to charge people etc. Information helps controlling
take place, it gives the company information to make controls which affect the
process of the business.
An example of operational support from my business report
are things such as opening stock, closing stock. The opening stock allows the
business to know how much stock is in when they open and the closing stock
allows the shop to know how much is there when they close, this helps the
business know how much is there and allows them to work out how much stock
they’ve sold as well as if which helps process the ‘Reorder Message’, allowing
the business to know if they need to order more stock.
Analysis
Analysis is breaking down a complex issue into parts to
improve your understanding, for example trends over time, geographical
differences etc.
This allows us to make good business decisions because it
gives us a good and deep understanding. The manager of the company would
normally do the analysis in the company, for example noticing top sellers and
if the company need change location or change products etc. Good Analysis helps
make decision making better.
An example of analysis from my business reports could be
looking at the report to notice what’s selling well and what’s selling bad, the
opening stock and closing stock allows us to see this.
Decision Making
Operational Decisions are the day to day business decisions
that need to be made, for example making the decision if to order more stock,
making deliveries etc.
Tactical decision are short term decisions that will effect
the business, this could be deciding to deliver express instead of standard or
more advertising, these decisions would be made by managers in the business. To
make these decisions the manager would have to do an analysis first.
Strategic Decisions are long term business plans, typically
made by the person in charge of the business and they have permanent long term
effects on the business. This could be closing the shop and becoming an online
shop or even expanding your company. Before making strategic decisions a lot of
information needs to be collected and a lot of analysis needs to be done.
An example of an operational decision could be deciding
whether you need to order more stock or having a sale to clear stock quickly.
An example of a tactical decision are things such as advertising, delivering
express or standard etc. An example of a strategic decision could be shutting
the shop to become an online shop or expanding the business to open up new
shops.
Gaining Commercial
Advantage
Business comes down to making money, finding out about rival
products, as well as market potential, pricing is crucial if priced too high
you won’t sell a lot, if it’s too low then you won’t be making a lot of money,
increasing revenue is making more profit and decreasing costs is lowering the
production costs. These are all commercial advantages as they give you the
advantage of making money.
An example of this could be looking at your prices and
comparing them to rival products to see if the price is too high, another could
be looking at stock and sales to determine whether you’re ordering too much for
a certain time period. Also looking at the production costs and decreasing the
costs of production to increase revenue is a commercial advantage.
