Saturdays Schedule

1
Saturdays Schedule

• Questions?
• Finish Ch 2
• Ch 3
• Ch 4

• Lunch
• Show time
• Ch 9
• Closing

2
A FRAMEWORK for MARKETING MANAGEMENT
Chapter 3 Understanding Markets, Market
Demand, and the Marketing Environment
Kotler Keller
3
Chapter Questions

• What are the components of a modern marketing
  information system?
• How can marketers improve marketing decisions
  through intelligence systems and marketing
  research?
• How can demand be more accurately measured and
  forecasted?
• What key macroenvironmental developments must
  marketers understand?

4
Marketing Information System
A marketing information system (MIS) consists of
people, equipment, and processes to gather,
sort, analyze, evaluate, and distribute needed,
timely, and accurate information to marketing
decision makers
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MIS Resources

• Internal company records
• Marketing intelligence
• Marketing research

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Internal Records

• Order-to-payment cycle
• Sales information system
• Databases and warehouses
• Data mining
• Online sources?

7
Improving the Quality of Marketing Intelligence

• Train sales force to scan for new development
• Motivate channel members to share intelligence
• Network internally
• Establish a customer advisory panel
• Utilize government data resources
• Purchase information
• Collect customer feedback online

8
Marketing Research Defined
Systematic design, collection, analysis, and
reporting of data and findings relevant to a
specific marketing situation facing a company
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The Marketing Research Process

• Define the problem
• Develop research plan
• Collect information
• Analyze information
• Present findings
• Make decision

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Step 1

• Define the problem
• Specify decision alternatives
• State research objectives

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Step 2

• Identify data sources
• Design research approach
• Develop research instruments
• Design sampling plan
• Select contact methods

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Data Sources

• Secondary data

• Primary data

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Research Approaches

• Observation
• Focus group
• Survey research
• Behavioral data
• Experimentation

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Research Instruments

• Questionnaires
• Qualitative research techniques
• Mechanical devices

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Sampling Plan

• Sampling unit Who is to be surveyed?
• Sample size How many people should be surveyed?
• Sampling procedure How should the respondents be
  chosen?

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Contact Methods

• Mail questionnaire
• Telephone interview
• Personal interview
• Online interview

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Forecasting and Demand Measurement

• Which market to measure?
• Potential market
• Available market
• Target market
• Penetrated market

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Company Demand and Sales Forecast

• Company demand estimated share of market demand
  at alternative levels of company marketing effort
  in a given time
• Company sales forecast expected sales based on a
  chosen marketing plan and an assumed marketing
  environment

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Estimating Current Demand

• Total market potential maximum number of sales
  available to all of the firms in an industry
  during a given period, under a given level of
  industry marketing effort and environmental
  conditions
• Area market potential market potential of a
  specific location
• Market buildup method
• Multiple-factor index method

20
Estimating Future Demand

• Survey of buyers intentions
• Composite of sales force opinions
• Expert opinion
• Past-sales analysis
• Market-test method

21
External macro forces impacting on the industry
and the firm
Macro (remote)
Industry(near)
The firm
environment
environment
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Environmental Forces

• Demographic
• Economic
• Political-legal
• Natural
• Social-cultural
• Technological

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Population and Demographics

• Worldwide population growth
• Population age mix
• Ethnic markets

• Educational groups
• Household patterns
• Geographic shifts in population

24
Population Age Groups

• Preschool
• School-age
• Teens
• 25-40
• 40-65
• 65

25
Economic Environment

• Income distribution
• Savings, debt, and credit availability
• Outsourcing and free trade

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Economic forces

• Key economic indicators
• Gross Domestic Product (GDP)
• business cycle trends (local and global)
• inflationary/deflationary trends
• monetary policies
• interest rates
• credit availability
• foreign currency rates
• government policies (eg tax)
• balance of payments
• foreign investment
• saving rates
• unemployment and employment levels

27
Politicallegal forces

• Proposed legislation or other regulatory
  processes likely to impact the industry or
  organization such as
• Increase in business legislation
• Growth of special interest groups

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Natural Environment

• Shortage of raw materials
• Increased energy costs
• Anti-pollution pressures
• Governmental protections

29
Social-Cultural Environment

• Views of themselves
• Views of others
• Views of organizations
• Views of society
• Views of nature
• Views of the universe

30
Technological forces

• Technological change that will impact the entire
  value chain, from supply to production/operations
  and the end customer.
• Pace of change
• Opportunities for innovation
• Varying RD budgets
• Increased regulation of change

31
Natural environment forces

• Availability and quality of supply (raw
  materials)
• Energy supply and costs or restrictions (water,
  electricity, gas)
• Government policies - pollution, recycling,
  genetically modified food products.

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Analysis and diagnosis

• Analysis determination of what is likely to
  happen.
• Diagnosis assessment of the significance of the
  data, i.e. what it means in terms of
  opportunities and threats to the company.

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Implications

• State your assumptions/scenario of the forecasted
  trend for every external environmental factor.
• Determine what this means in terms of
  opportunities and threats for each environmental
  factor.

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Then

• Rate each factor on a five-point scale according
  to its degree of significance.
• Rate each of these factors on the likelihood of
  occurrence
• Result - double-digit rating e.g.,
• 5-5 High significance / High probability
• 5-1 High significance / Low probability
• 1-5 Low significance / High probability
• 1-1 Low significance / Low probability

35
Types of Industrial Structures

• Industrial economies
• Industrializing economies
• Raw-material exporting economies
• Subsistence economies