Presentation on theme: "Gathering Information and Scanning the Environment"— Presentation transcript:
1Gathering Information and Scanning the Environment 3Gathering Information and Scanning the EnvironmentMarketing Management, 13th ed
2Chapter QuestionsWhat are the components of a modern marketing information system?What are useful internal records?What is involved in a marketing intelligence system?What are the key methods for tracking and identifying opportunities in the macro environment?What are some important macro environment developments?3-2
3What is a Marketing Information System (MIS)? A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.3-3
4Components of the Marketing-Information Systems InternalDataMarketingIntelligenceMarketingScienceMarketingResearchAccountingRecordsSalesCostsInventoriesCash flowsAccountsreceivableand payableObservationSales ForceDealers anddistributorsSuppliersExecutiveawarenessOutside DataCensusTradeassociationdataTrade pressSyndicatedawarenessAnalyticalSystemsStatisticalanalysisModelbuildingQuantitativeSurveyresearchTelephoneMailPersonalobservationExperimentQualitativeProjectivetestsFocusgroups
5Marketing MISSupports managerial activities in product development, distribution, pricing decisions, and promotional effectiveness
6Marketing MIS Manufacturing DSS Transaction processing systems Databases of internal dataDatabases of external dataManufacturing DSSDatabases of valid transactions for each TPSMarketing applications databasesTransaction processing systemsMarketing MISBusiness transactionsSales by customerOperationaldatabasesManufacturing ESSales by salespersonSales by productPricing reportTotal service callsCustomer satisfaction
7Inputs to Marketing MIS Strategic plan and corporate policiesThe Transaction Processing SystemsExternal sources:The competitionThe market
8Marketing MIS Subsystems and Outputs Marketing researchProduct developmentPromotion and advertisingProduct pricing
9Information Needs Probes What decisions do you regularly make?What information do you need to make these decisions?What information do you regularly get?What special studies do you periodically request?What information would you want that you are not getting now?What are the four most helpful improvements that could be made in the present marketing information system?3-9
10Internal Records & Marketing Intelligence Marketing Managers rely on internal reports of orders ,sales ,prices,cost etcBy analyzing this information they can spot important opportunities and problems
11The order Payment Cycle Heart of Internal Record System
12Internal Records and Marketing Intelligence Order-to-payment cycle—send orders, prepares invoices, transmit copies to various departments, and back-orders out-of-stock itemsSales information system—timely and accurate reports on current salesDatabases, warehousing, data mining--customer, product, and salesperson and combine data from the different databases.Marketing intelligence system—a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.3-12
13Now Now (days) improved order payment cycle is required Customers favor firms that can promise timely delivery.Order-Pay can also be done online. This process is called as EDI-Electronic Data Interface.E.G., Cisco, Dell, Ebay
14Data MiningIt is the process of analyzing data from different perspectives and summarizing it into useful information - information that can be used to increase revenue, cuts costs, or both.It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified.Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.
15Example of Data MiningOne Midwest grocery chain used the data mining capacity of Oracle software to analyze local buying patterns.They discovered that when men bought diapers on Thursdays and Saturdays, they also tended to buy beer.Further analysis showed that these shoppers typically did their weekly grocery shopping on Saturdays.On Thursdays, however, they only bought a few items. The retailer concluded that they purchased the beer to have it available for the upcoming weekend.The grocery chain could use this newly discovered information in various ways to increase revenue. For example, they could move the beer display closer to the diaper display. And, they could make sure beer and diapers were sold at full price on Thursdays
16Marketing Intelligence System It is a process of acquiring and analyzing information in order to:understand the market;determine the current and future needs and preferences, attitudes and behavior of the market;assess changes in the business environment that may affect the size and nature of the market in the future.A set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment
17Steps to Improve Marketing Intelligence Train sales force to scan for new developments (make intelligence gathering important to salespeople)Motivate channel members to share intelligence (hire specialists to gather marketing intelligence—mystery shoppers)Network externally (purchase competitors’ products; attend open houses and trade shows; read competitors’ published reports; etc.)Utilize a customer advisory panel (representative customers or company’s largest customers)Utilize government data sources (U.S. Census data, etc.)Collect customer feedback online (online customer review boards, discussion forums, chat rooms, and blogs)Purchase information (A.C. Nielsen Company and other information sources)3-17
18Secondary Commercial Data Sources Nielsen—tracks sales of consumer package goods and brands, gathered at the point of sale in retail stores of all types (e.g., supermarkets through scanner data, television audiences).MRCA (Medium Resolution Coverage Area)—data on weekly family purchases of consumer products, and home food consumption.Information Resources—supermarket scanner data and data on the impact of supermarket promotions.SAMI/Burke—reports on warehouse withdrawals to food store in selected market areas and supermarket scan data.Simmons—annual reports covering television markets, television markets, sporting goods, and proprietary drugs with demographic data by sex, income, age, and brand preferences.Arbitron—selling data to subscribers.By clicking on the video icon, you can launch a short video clip about Burke’s research process.3-18
19Sources of Competitive Information Independent customer goods and service review forumsDistributor or sales agent feedback sitesCombination sites offering customer reviews and expert opinionsCustomer complaint sitesPublic blogs3-19
20Needs and TrendsFads—short-lived and without social, economic, and political significance.Trends—direction or sequence of events that has some momentum and durability.Megatrends—large social, economic, political, and technological changes3-20
21Trends Shaping the Business Landscape Profound shifts in centers of economic activity (Asia (excluding Japan)—13% of World GDP; Western Europe > 30%)Increases in public-sector activity (aging of population new levels of efficiency and creativity from public sector)Change in consumer landscape (billion new consumers to enter global marketplace in next decade and U.S. Latinos 2015 spending power equivalent to 60% of Chinese consumers.Technological connectivity (change way people live)Scarcity of well-trained talent (33 mm university-educated young professionals in developing countries is more than double the number in developed onesIncrease in demand for natural resources (Oil demand projected to grow by 50% in next two decades and water shortages may constraint growth in many countries)Emergence of new global industry structures (barbell-like structure—few large, narrow middle, lot of smaller companies)Ubiquitous access to information (open source approach)Management shifts from art to science (algorithmic decision-making techniques and sophisticated software)Increase in scrutiny of big business practices (be able to argue and demonstrate intellectual, social, and economic case for business)3-21
23What is Demographic environment? The demographic environment includes the study of human populations in terms of:size,density,location,age,sex,race,occupation,other statistical information.
24Population and Demographics Population growthPopulation age mixEthnic marketsEducational groupsHousehold patternsGeographical shifts3-24
25World Population Growth World population shows explosive growth, in 2000 it was 6.1 billon and it is projected to exceed 7.9 billon by 2025Explosive population growth has major implication for business.For Example--GOLDMAN SCAHS report has projected that India in next 30 year might grow up to 3rd largest economy in world
26Population Age MixIn population age mix marketers are increasingly recognizing the potential of youth segment (marketers are focused on youth )For example--Titan the well-known watch marketerIntroduced a range of Sunglasses which is call “Eye Gear” under the brand Fast Track
27Literacy Of Population Literacy of Population is mainly divided into:A) LiterateB) illiterateC)EducatedD)Uneducated
29ECONOMIC ENVIRONMENTMarket requires purchasing power as well as people.Purchasing power depends upon current income, prices, debt, credit, saving etc.Marketers must pay careful attention to trends affecting purchasing power.
30INDIAN SOFTWARE GIANTS WARY OF ECONOMIC SLOWDOWN 20 JAN 2008 (Economic times)
31INCOME DISTRIBUTIONMacroeconomic indicators provides overall health of economy as well as direction of economic growth.Marketers needs to understand the distribution of income to make more meaningful conclusions.
32Types of Industrial Structures economiesIndustrializingeconomiesRaw-material-exportingeconomiesSubsistenceeconomies
35SOCIAL –CULTURAL ENVIRONMENT Purchasing power is directed towards certain goods &services.People absorb, unconsciously a worldview that defines relationship to organization, to themselves, to society, to nature, and to universe.
36Microsoft steps up on search R&D IN EUROPE This is because maximum usage is in European countries.
37Social-Cultural Environment Views of themselves (pleasure seeker, self-realization, etc.)Views of others (concern about homeless, crime, victims, social surrogates—television, home video games, etc.)Views of organizations (company downsizing and corporate accounting scandals, etc.)Views of society (defend society—preservers; run it—makers; can get from—takers; change it—changers; looking for something deeper—seekers; leave it--escapersViews of nature (nature’s fragility and finiteness)Views of the universe (religious, etc.)3-37
38Most Popular American Leisure Activities ReadingTV WatchingSpending time with familyGoing to moviesFishingComputer activitiesGardeningRenting moviesWalkingExerciseListening to music3-38
39Natural Environment Shortage of raw materials Increased energy costs Anti-pollutionpressuresGovernmentalprotections
40NATURAL ENVIRONMENTDeterioration of natural environment is major concern.Cities like Mumbai, Bangalore etc. reached dangerous levels.Some regulation hit industries very hard--Steel industry
41Microsoft’s environmental contribution Microsoft announces a new green wireless mouse.This is environment friendly because it uses six month long battery.
42Keys to Avoiding Green Marketing Myopia Consumer Value Positioning (design environmental products to perform as well as alternatives; products that have health benefits; fixed price for renewable energy products)Calibration of Consumer Knowledge (connect environmental products attributes with desired consumer value—pesticide-free; solar powered); use of internet.Credibility of Product Claims (environmental product and consumer benefit claims)3-42
43TECHNOLOGICAL ENVIRONMENT Technology has released such wonders like open heart surgeryIt has also released hazards like hydrogen bomb, nuclear bomb etc.
44Technological Environment Pace of changeUnlimited Opportunitiesfor innovationVarying R&DbudgetsIncreased regulationof change
45POLITICAL- LEGAL ENVIRONMENT Marketing decisions are strongly affected by development in political and legal environment.Increase in business legislationProtecting the welfare of consumers
48Study Question 1 ________ consists of people, equipment, and procedures to gather, sort, analyze, evaluate, anddistribute needed, timely, and accurate information toMarketing decision makers. A. A marketing information systemB. A marketing research systemC. A marketing intelligence systemD. A promotional campaignE. A marketing database3-48
49Study Question 2All of the following would be considered to be steps toimprove the quality of marketing intelligence in acompany EXCEPT ________. A. training and motivating the sales force to spot and report new developmentsB. using guerrilla tactics such as going through a competitor’s trashC. motivating intermediaries to pass along important informationD. networking externallyE. purchasing information from outside suppliers3-49
50Study Question 3A ________ is “unpredictable, short-lived, and withoutsocial, economic, and political significance.” A. fadB. fashionC. trendD. megatrendE. style3-50
51Study Question 4 ________ have been described as “large social, economic, political and technological changes [that] areslow to form, and once in place, they influence us forsome time—between seven and ten years, or longer. A. FadsB. FashionsC. TrendsD. MegatrendsE. Styles3-51
52Study Question 5In which of the following economies would we expect tofind the fewest opportunities for marketers? A. Industrializing economiesB. Land-locked economiesC. Raw-material-exporting economiesD. Industrial economiesE. Subsistence economies3-52