Qualitative and quantitative data in business

Data trials and triumphs

This reading focuses on why accurate interpretation of data is key to data-driven decisions. You
have been learning why data is such a powerful business tool and how data analysts help their
companies make data-driven decisions for great results. As a quick reminder, the goal of all data
analysts is to use data to draw accurate conclusions and make good recommendations. That all
starts with having complete, correct, and relevant data.

But keep in mind, it is possible to have solid data and still make the wrong choices. It is up to data
analysts to interpret the data accurately. When data is interpreted incorrectly, it can lead to huge
losses. Consider the examples below.

Coke launch failure

In 1985, New Coke was launched, replacing the classic Coke formula. The company had done taste
tests with 200,000 people and found that test subjects preferred the taste of New Coke over Pepsi,
which had become a tough competitor. Based on this data alone, classic Coke was taken off the
market and replaced with New Coke. This was seen as the solution to take back the market share
that had been lost to Pepsi.

But as it turns out, New Coke was a massive flop and the company ended up losing tens of millions
of dollars. How could this have happened with data that seemed correct? It is because the data
wasn’t complete, which made it inaccurate. The data didn't consider how customers would feel about
New Coke replacing classic Coke. The company’s decision to retire classic Coke was a data-driven
decision based on incomplete data.

Mars orbiter loss

In 1999, NASA lost the $125 million Mars Climate Orbiter, even though it had good data. The
spacecraft burned to pieces because of poor collaboration and communication. The Orbiter’s
navigation team was using the SI or metric system (newtons) for their force calculations, but the
engineers who built the spacecraft used the English Engineering Units system (pounds) for force
calculations.

No one realized a problem even existed until the Orbiter burst into flames in the Martian atmosphere.
Later, a NASA review board investigating the root cause of the problem figured out that the issue
was isolated to the software that controlled the thrusters. One program calculated the thrusters’ force
in pounds; another program looking at the data assumed it was in newtons. The software controllers
were making data-driven decisions to adjust the thrust based on 100% accurate data, but these
decisions were wrong because of inaccurate assumptions when interpreting it. A conversion of the
data from one system of measurement to the other could have prevented the loss.

When data is used strategically, businesses can transform and grow their revenue. Consider
the examples below.

Crate and Barrel

At Crate and Barrel, online sales jumped more than 40% during stay-at-home orders to combat the
global pandemic. Currently, online sales make up more than 65% of their overall business. They are
using data insights to accelerate their digital transformation and bring the best of online and offline
experiences together for customers.

Big Query enables Crate and Barrel to "draw on ten times [as many] information sources (compared
to a few years ago) which are then analyzed and transformed into actionable insights that can be
used to influence the customer’s next interaction. And this, in turn, drives revenue."

Read more about Crate and Barrel's data strategy in How one retailer’s data strategy powers
seamless customer experiences.

PepsiCo
Since the days of the New Coke launch, things have changed dramatically for beverage and other
consumer packaged goods (CPG) companies.

PepsiCo "hired analytical talent and established cross-functional workflows around an infrastructure
designed to put consumers’ needs first. Then [they] set up the right processes to make critical
decisions based on data and technology use cases. Finally, [they] invested in the right technology
stack and platforms so that data could flow into a central cloud-based hub. This is critical. When data
comes together, [they] develop a holistic understanding of the consumer and their journeys."
Read about how PepsiCo is delivering a more personal and valuable experience to customers using
data in How one of the world’s biggest marketers ripped up its playbook and learned to anticipate
intent.

Key skills for triumphant results

As a data analyst, your own skills and knowledge will be the most important part of any analysis
project. It is important for you to keep a data-driven mindset, ask lots of questions, experiment with
many different possibilities, and use both logic and creativity along the way. You will then be
prepared to interpret your data with the highest levels of care and accuracy. Note that there is a
difference between making a decision with incomplete data and making a decision with a small
amount of data. You learned that making a decision with incomplete data is dangerous. But
sometimes accurate data from a small test can help you make a good decision. Stay tuned. You will
learn about how much data to collect later in the program.

Qualitative and quantitative data

Hi again. When it comes to decision-making, data is key. But we've also learned that there are a
lot of different kinds of questions that data might help us answer, and these different questions
make different kinds of data. There are two kinds of data that we'll talk about in this video,
quantitative and qualitative. Quantitative data is all about the specific and objective measures
of numerical facts. This can often be the what, how many, and how often about a problem. In
other words, things you can measure, like how many commuters take the train to work every
week. As a financial analyst, I work with a lot of quantitative data. I love the certainty and
accuracy of numbers. On the other hand, Qualitative data describes subjective or explanatory
measures of qualities and characteristics or things that can't be measured with numerical data,
like your hair color. Qualitative data is great for helping us answer why questions. For example,
why people might like a certain celebrity or snack food more than others. With quantitative data,
we can see numbers visualized as charts or graphs. Qualitative data can then give us a more
high-level understanding of why the numbers are the way they are. This is important because it
helps us add context to a problem. As a data analyst, you'll be using both quantitative and
qualitative analysis, depending on your business task. Reviews are a great example of this.
Think about a time you used reviews to decide whether you wanted to buy something or go
somewhere. These reviews might have told you how many people dislike that thing and why.
Businesses read these reviews too, but they use the data in different ways. Let's look at an
example of a business using data from customer reviews to see qualitative and quantitative data
in action. Now, say a local ice cream shop has started using their online reviews to engage with
their customers and build their brand. These reviews give the ice cream shop insights into their
customers' experiences, which they can use to inform their decision-making. The owner notices
that their rating has been going down. He sees that lately his shop has been receiving more
negative reviews. He wants to know why, so he starts asking questions. First are measurable
questions. How many negative reviews are there? What's the average rating? How many of
these reviews use the same keywords? These questions generate quantitative data, numerical
results that help confirm their customers aren't satisfied. This data might lead them to ask
different questions. Why are customers unsatisfied? How can we improve their experience?
These are questions that lead to qualitative data. After looking through the reviews, the ice
cream shop owner sees a pattern, 17 of negative reviews use the word "frustrated." That's
quantitative data. Now we can start collecting qualitative data by asking why this word is being
repeated? He finds that customers are frustrated because the shop is running out of popular
flavors before the end of the day. Knowing this, the ice cream shop can change its weekly order
to make sure it has enough of what the customers want. With both quantitative and qualitative
data, the ice cream shop owner was able to figure out his customers were unhappy and
understand why. Having both types of data made it possible for him to make the right changes
and improve his business. Now that you know the difference between quantitative and
qualitative data, you know how to get different types of data by asking different questions. It's
your job as a data detective to know which questions to ask to find the right solution. Then you
can start thinking about cool and creative ways to help stakeholders better understand the data.
For example, interactive dashboards, which we'll learn about soon.

Question
Fill in the blank: Quantitative data is specific and _____.

descriptive
objective
explanatory
subjective
Correct
Quantitative data is a specific and objective measure, such as a number, quantity or
range.

Which of the following examples would be determined using qualitative data?

The most well-liked make and model of car in Puerto Rico

The frequency of hurricanes per year in Louisiana
The annual rainfall in Costa Rica
The number of commuters who take the train to work
Correct
The most well-liked make and model of car in Puerto Rico would be determined using
qualitative data. Qualitative data is a subjective and explanatory measure of a quality or
characteristic.
 Qualitative and quantitative data in business
This reading further elaborates on the meaning of qualitative versus quantitative.

As you have learned, there are two types of data: qualitative and quantitative. 

Qualitative data tools: focus groups, social media text analysis, and in-person interviews Quantitative
data tools: structured interviews, surveys, and polls

We can take a closer look at the data types and data collection tools. Imagine that you
are a data analyst for a chain of movie theaters. Your manager wants you to track
trends in:

 Movie attendance over time

 Profitability of the concession stand
 Evening audience preferences 
In our scenario, we assume quantitative data already exists to monitor all three trends. 

Movie attendance over time

Starting with the historical data the theater has through its loyalty and rewards program,
your first step is to investigate what insights you can gain from that data. You look at
attendance over the last 3 months. But, because the last 3 months didn’t include a
major holiday, you decide it is better to look at a full year’s worth of data. As you
suspected, the quantitative data confirmed that average attendance was 550 per month
but then rose to an average of 1,600 per month for the months with holidays. 

The historical data serves your needs for the project, but you also decide that you will
resume the analysis again in a few months after the theater increases ticket prices for
evening showtimes. 

Profitability of the concession stand

Profit is calculated by subtracting cost from sales revenue. The historical data shows
that while the concession stand was profitable, profit margins were razor thin at less
 than 5%. You saw that average purchases totaled $20 or less. You decide that you will
keep monitoring this on an ongoing basis. 

Based on your understanding of data collection tools, you will suggest an online survey
of customers so they can comment on the food at the concession stand. This will enable
you to gather even more quantitative data to revamp the menu and potentially increase
profits. 

Evening audience preferences

Your analysis of the historical data shows that the 7:30 PM showtime was the most
popular and had the greatest attendance, followed by the 7:15 PM and 9:00 PM
showtimes. You may suggest replacing the current 8:00 PM showtime that has lower
attendance with an 8:30 PM showtime. But you need more data to back up your hunch
that people would be more likely to attend the later show.

Evening movie-goers are the largest source of revenue for the theater. Therefore, you
also decide to include a question in your online survey to gain more insight. 

Qualitative data for all three trends plus ticket pricing

Since you know that the theater is planning to raise ticket prices for evening showtimes
in a few months, you will also include a question in the survey to get an idea of
customers’ price sensitivity. 

Your final online survey might include these questions for qualitative data:

1. What went into your decision to see a movie in our theater today? (movie attendance)
2. What do you think about the quality and value of your purchases at the concession
stand? (concession stand profitability)
3. Which showtime do you prefer, 8:00 PM or 8:30 PM, and why do you prefer that time?
(evening movie-goer preferences)
4. Under what circumstances would you choose a matinee over a nighttime showing?
(ticket price increase)

Summing it up
Data analysts will generally use both types of data in their work. Usually, qualitative data
can help analysts better understand their quantitative data by providing a reason or
more thorough explanation. In other words, quantitative data generally gives you the
what, and qualitative data generally gives you the why. By using both quantitative and
qualitative data, you can learn when people like to go to the movies and why they chose
the theater. Maybe they really like the reclining chairs, so your manager can purchase
more recliners. Maybe the theater is the only one that serves root beer. Maybe a later
show time gives them more time to drive to the theater from where popular restaurants
are located. Maybe they go to matinees because they have kids and want to save
money. You wouldn’t have discovered this information by analyzing only the quantitative
data for attendance, profit, and showtimes.

Learning Log: Ask SMART questions about

real-life data sources

Overview

In a previous self-reflection, you prepared for a “data conversation” with someone in

your life by creating SMART questions to help you understand more about the data they
usually interact with, the limitations of the data they have, and their business goals.
Now, you’ll complete an entry in your learning log to reflect on that conversation and
how you might approach this data for a real project. By the time you complete this log
entry, you will have a stronger understanding of how to use the SMART framework to
craft effective questions about real life data. This will be a key skill as you begin to
develop your own data analysis projects.

Review your notes

 Before you begin your new entry, take a moment to locate and read the notes you took
during your data conversation. Based on the answers to your well-prepared SMART
questions, you should have a better context for your target audience now. Review those
answers and start thinking about the following:

 Stakeholder’s business goals; in this case, the person you had a conversation with
 Identifying the data needed to answer the SMART questions
 Exploring what data, the stakeholder already has
 Determining the data that you don’t have, but need in order to answer the questions
You’ll reflect on how your data conversation went and what you learned in your learning
log template which is linked below.

Access your learning log

To use the template for this course item, click the link below and select “Use Template.” 

Link to learning log template: Ask SMART questions about real life data sources

OR

If you don’t have a Google account, you can download the template directly from the
attachment below.

Learning Log Template_ Ask SMART questions about real life data sources

DOCX File

Reflection

Write 5-7 sentences (100-140 words) about data sources discussed during your real-life
data conversation.

First, consider your data conversation and how it went. Here are some questions to help
you get started:

 Was there anything challenging about getting the conversation started?

 Were there questions you didn’t get to ask? 
 Did you manage your time effectively?
 Did you take notes? Are they as detailed as you need them to be?
 Are you missing any information? Is there anything that you still find unclear or vague?  
 If you could do the conversation over again, is there anything you would change?
Next, turn your attention to your notes and reflect on what you know about the data
itself:

 What are the sources of data available for the project?

 Which data sources were qualitative and which were quantitative? Explain your
answer. 
 What decisions could you make when considering each data source separately? Could
you make different decisions about the data if you combined it? If so, give an example.
 Is there any kind of data that isn’t available, but you would like to find? If so, what is it,
and why would you like to know more about it?
When you’ve finished your entry in the learning log template, make sure to save the
document so your response is somewhere accessible. This will help you continue
applying data analysis to your everyday life. You will also be able to track your progress
and growth as a data analyst.

Test your knowledge on the power of

data
Practice Quiz. • 8 min. • 4 total points available.4 total points
DueApr 9, 11:59 PM PDT

Congratulations! You passed!

Grade received 93.75%

To pass 80% or higher

Go to next item

1.
Question 1

What is the difference between qualitative and quantitative data?

1 / 1 point

Qualitative data is specific. Quantitative data is subjective.

Qualitative data is about the quality of a product or service. Quantitative data is about how much
of that product or service is available.

Qualitative data can be used to measure qualities and characteristics. Quantitative data can be
used to measure numerical facts.
 Qualitative data describes the kind of data being analyzed. Quantitative data describes how
much data is being analyzed.

Correct

Qualitative data can be used to measure qualities and characteristics. Quantitative data can be used
to measure numerical facts.

Question 2

Fill in the blank: Data-inspired decision-making can discover _____ when exploring different data
sources.

1 / 1 point

which experts can give advice

if a decision was properly made

what the data has in common

where the largest amount of data is

Correct

Data-inspired decision-making deals with exploring different data sources to discover what they have
in common.

3.
Question 3

Which of the following examples describes using data to achieve business results? Select all that
apply.

0.75 / 1 point

A large retailer performs data analysis on product purchases to create better promotions.

Correct

Analyzing user preferences to customize movie recommendations and analyzing product purchases
to create better promotions are examples of using data to achieve business results. These examples
demonstrate putting analysis to work to achieve business results.
 A video streaming service analyzes user preferences to customize movie recommendations.

Correct

Analyzing user preferences to customize movie recommendations and analyzing product purchases
to create better promotions are examples of using data to achieve business results. These examples
demonstrate putting analysis to work to achieve business results.

A movie theater tracks the number of weekend movie goers for three months.

A grocery chain collects data on sale items and pricing from each store.

Analyzing user preferences to customize movie recommendations and analyzing product purchases
to create better promotions are examples of using data to achieve business results. These examples
demonstrate putting analysis to work to achieve business results.

4.
Question 4

If someone is subjectively describing their feelings or emotions, it is qualitative data.

1 / 1 point

True

False

Correct

If someone is describing their feelings or emotions, they are providing qualitative data. Qualitative
data is a subjective and explanatory measure of a quality or a characteristic.