How Businesses Use Information (With Information Types)

By Indeed Editorial Team

Published July 18, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Businesses use different types of information to help them make informed decisions. The information they collect may influence their business policies, procedures, or goals. Learning more about the different types of information businesses can use can help improve your decision-making process. In this article, we explain how businesses use information, discuss the different types of information they may collect and analyze, and review other classifications of information.

How businesses use information

Here's how businesses use information to grow and develop:

Make informed decisions

Businesses often collect and analyze information to make informed business decisions. For example, if a company wants to increase sales, it may conduct market research to learn about industry trends and analyze what its competitors are doing. Conducting this research and analyzing the information allows businesses to make decisions that can benefit the company the most.

Product development

When companies want to release new products, they may conduct product research first. This helps them create a product or service prospective customers may be interested in purchasing. Here are the types of product research companies may use during different stages of development:

  • Concept testing: When companies develop a product idea, they may test the concept by showing an audience and asking them for their opinion. This allows companies to perfect their ideas before they manufacture their products, helping them save money.

  • Focus groups: Similar to concept testing, companies host focus groups to ask people what they think of a product before releasing it. The main difference is that the company made the product already, so the focus group can use it and offer an informed review of aspects like user-friendliness and quality.

  • Product tests: Companies typically thoroughly test their products before releasing them. They analyze the information they collect from these tests to improve the product and ensure it's safe and effective.

  • Price testing: To offer a competitive and fair price, companies may complete price testing, which involves showing different groups the same product, telling them different prices, and asking for their opinion on the price. Companies then analyze their results to determine which price garnered the most positive reaction.

  • Product demos: Companies may create a model or demo of their product to show people before manufacturing more. This allows them to get the feedback they can apply to the manufacturing process.

  • Product surveys: After companies release their product, they may offer surveys to customers through the mail, in person, online, or over the phone. This allows them to collect feedback they can apply to future products.

Store and analyze data

Many companies collect and store customer data to get to know their audience better. This helps them target their marketing to new and prospective customers, helping them increase sales and profit. Here are some examples of the type of information businesses may collect from their customers:

  • Personal data: This includes customers' contact information and if they're shopping online, it may include their IP address and web browser cookies.

  • Engagement data: This is data about how consumers interact with a company's website, app, social media accounts, e-mails, or text messages.

  • Attitudinal data: This is data about how satisfied customers are with their purchases and how likely they are to become repeat customers.

  • Behavioural data: This is transactional data, such as a customer's purchase history or the categories they click on when online shopping.

Assist with business processes

Companies may use information systems to improve or streamline their processes. This allows them to automate common business tasks so management teams can focus on more challenging tasks. For example, a company may use software that analyzes its inventory and automatically orders new supplies when they're low. Companies may use information systems for sales, marketing, manufacturing, accounting, or human resources.

Related: Information Report Examples: Definition, Types, and Formats

Types of information

Here are some of the types of information businesses may collect and analyze:

Directive information

Directive and descriptive information are about providing directions to a person or group of people to achieve a particular result and outcome. You can use directive information with or without dictating the means to achieve the desired result. Directive information often comes in verbal or written form and can apply to leadership at work, in the military, or in government, and with everyday experiences, like legal, life, and safety matters.

Here are some examples of directive and descriptive information:

  • Medical do not resuscitate (DNR) orders

  • Organ donation paperwork

  • Living wills

  • Coaching

  • Mode of operations in any organization

  • Employment performance reviews

  • Military commands

Related: Data vs. Information (With Definitions and Differences)

Empirical information

Empirical information means information gained through human senses, observation, experimentation, and the testing of a hypothesis by establishing documentation of patterns or behaviours. It almost always has a scientific foundation and verifies the truth or falsehood of a claim through qualitative and quantitative factors. Here are several examples of empirical information:

  • Electricity

  • Atomic theory

  • Theory of gravity

  • Kinetic theory of matter

  • Genetics and DNA

Empirical information and evidence is the opposite of anecdotal information and evidence, which is a conclusion based on informal collection methods, most often a personal experience and testimony.

Related: Meaning of Empirical Research (Methods, Types, and Examples)

Stimulatory information

Stimulatory information is information that creates a response or stimulation amongst a person or group of people. Stimulation encourages the cause of activity and you can gain stimulatory information in a variety of ways, like in person through observation, through word-of-mouth communication, or through outlets like the news.

One example may be a person observing the body language and nonverbal communication of someone walking nearby. If the stimulation is positive, they may say hello and start a conversation or, if the stimulation isn't positive, they may respond by walking the other way, running away, or creating more distance between them. Here are other examples of stimulatory information:

  • Victory day celebrations after a sports team wins a championship

  • Physiological fight-or-flight reaction response to perceived harm

Related: What Is Background Information? (With Types and Sources)

Policy information

Policy information focuses on decision-making and the design, formation, and selection of policies. It comprises laws, guidelines, regulations, rules, and oversight for an organization, group of people, or place. You can gain policy information through pictures, diagrams, descriptions, and other visual, audio, or written messages. Here are some examples of policy information:

  • Food pyramid diagram

  • Periodic table of elements

  • Organizational charts

  • Employee handbooks

  • Government restrictive, regulatory, or facilitating policies

Related: Everything You Need to Know to Create a Vacation Policy

Procedural information

Procedural information, or imperative knowledge, is the method of how someone knows to do something and is used when performing a task. You can refer to it as muscle memory, as it's knowledge that's hard to explain and is stored deeply in your mind. Here are three examples of procedural information:

  • Riding a bicycle: Riding a bike takes physical practice to comprehend, regardless of the amount or type of instructions given.

  • Driving a car: You can pass your written driving test or get a perfect score, though have little knowledge of the procedural information it takes to operate and drive a vehicle.

  • Tying a shoelace: The concept of tying a shoelace is hard to explain, so it may take a child several attempts to first learn how to do it, even with visual examples and descriptive words.

Related: What Are Procedures? (With Tips, Definition, and Examples)

Conceptual information

Conceptual information comes from ideas, theories, concepts, and hypotheses. With conceptual information, an abstract idea doesn't always have a basis in a scientific foundation and rather is the fundamental creation of beliefs, thoughts, philosophies, and preferences. You can form or share conceptual information through comparison and reflection, creating philosophies that you cannot prove or see. Here are some examples of conceptual information:

  • Charles Darwin's theory of evolution

  • Copernican concept of astronomy

  • conceptual art, where the method of producing it is more important than the finished product

Related: What Is Conceptual Thinking? (With Importance and Tips)

Other classifications of information

Another way to classify information is through these four attributes:

  • Factual information: Factual information deals only with truthful and proven concepts, like the scientific fact that the freezing point of water is zero degrees Celsius.

  • Analytical information: Analytical information is the interpretation of factual information and determining what's implied or inferred, like you can make ice cubes by storing them in freezers colder than zero degrees.

  • Subjective information: Subjective information is a person's opinion or feelings about a specific subject.

  • Objective information: Objective information is the opposite of subjective information as it's based on facts, like scientific or medical journal articles and publications.

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