1. Chapter 3
Scanning the marketing environment, Forecasting Demand, and Conducting Marketing research

2. Components of a modern MIS (Marketing Information System)
Everyone needs to observe the environment but marketers have two advantages:
Disciplined methods for collecting information
More time for interacting with customers & observe competition
Marketers understand and have extensive information on consumption patterns
Companies with superior information enjoy a competitive advantage
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3. Components of a modern MIS (Marketing Information System)
Consists of:
People, Equipment and Procedures to Gather, Sort, Analyze and Distribute needed, timely and accurate information to marketing decision-makers
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4. Components of a modern MIS (Marketing Information System)
is developed from:
Company’s internal records
Marketing Intelligence Activities
Marketing Research
MIS should be a cross between:
What managers think they need
What managers really need
What is economically feasible
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5. Internal Records & Marketing Intelligence
Order-to-payment cycle
Review of sales process & its complete transaction flow
Doing it accurately and timely is the key
Sales Information Systems
Timely & accurate reports on current sales
Need to correctly interpret sales data
Database, Data Warehousing and Data Mining Customer databases, product databases, salespersons databases
Use them to interact correctly with customers
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6. Internal Records & Marketing Intelligence
Marketing Intelligence System
A set of procedures and sources managers use to obtain everyday information about developments in marketing environment
Several steps
Train and motivate sales force to gather & report information
Motivate distributors, retailers etc. to pass information
Network externally (purchasing competitors’ products, attend their events etc. )
Customer advisory panels (interact with selected customers)
Government data resources (census reports etc.)
Purchase information from research houses etc.
Online customer feedback for competitive intelligence
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7. Collecting marketing intelligence on the internet
Review forums
Distributors feedback
Expert opinions
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8. Analyzing the Macroenvironment
Successful companies recognize and respond profitably to unmet needs and trends
Fad, trend & megatrend
Fad is a “unpredictable”, short-lived and without social, economic, political significance. (a new style of haircut)
Trend is a direction of sequence of events that has some momentum and more predictable and durable than fads. (music scene in Pakistan)
Megatrends are large social, economic, political and technological changes that are slow to form and [once in place], they influence us for sometime. (access to TV/news all over Pakistan)
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9. Analyzing the Macroenvironment
Identifying the major forces
Demographic
Economic
Social-cultural
Natural
Technological
Political-legal
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10. Analyzing the Macroenvironment
Demographic
Main demographic is population
Population growth
Differences and trends in different countries and regions and even cities
Population Age mix
Ethnicity
Educational
Household patterns
Family structures, collective lifestyles
Geographical shifts in population
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11. Analyzing the Macroenvironment
Economic
Markets require purchasing power [and people!]
Few important trends
Income distribution – a key development indicator
Savings, Debt & credit availability
Outsourcing & Free trade
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12. Analyzing the Macroenvironment
Social-Cultural Environment
Society’s impact on individuals and groups
Some interesting ‘views’
How people view themselves
How people view others
How people view companies, organizations
How people view their society and values
How people view nature
How people view life, universe, religion
Core beliefs and secondary beliefs
Sub-cultures
Shift of cultural values through time
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13. Islamic Banking: Reflecting Religious and Cultural Sensitivities
• Consistent with principles of Islamic Laws (Shariah)
Prohibits investing in business that are considered unlawful
Growth is due to disenchantment with value-neutral capitalist and socialist financial systems
Popular in Pakistan and Bangladesh,
National and international banks want to start Islamic banking in India
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14. Analyzing the Macroenvironment
Natural
Degradation of natural environment is a serious issue
Introduction of CNG riksaw in Delhi.
Important O&Ts
Shortage of Raw materials
Infinite
finite renewable (earth minerals etc)
finite non-renewable (oil, coal, platinum, zinc, silver etc.)
Increased energy costs
Anti-pollution pressures
Changing role of governments
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15. Analyzing the Macroenvironment
Technological
Changing the way we live and that too rapidly!
Innovation and new concepts
Cutting-edge research
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16. Analyzing the Macroenvironment
Political-Legal Environment
Businesses are being regulated and more controlled
More stringent rules and regulations.
Special interest groups (SIGs)
Such as senior citizens, women rights, consumers etc.
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17. Forecasting and Demand Measurement
There are many productive ways to break the market.
Define potential market: the set of consumers with a sufficient level of interesting a market offer.
Define available market: the set of consumers who have interest, income and access to a particular offer
Target market: is the part of the qualified available market the company decides to pursue.
Penetrated market : is the set of consumers who are buying the company's product.
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18. Forecasting and Demand Measurement The Measures of Market Demand
Different ways of looking at “market”
Potential Market
Set of consumers who profess a sufficient level of interest in a market offer (able to buy?)
Available Market
Set of consumers who have interest, income and access to a particular offer.
Target Market
Part of Qualified Available market, the company decides to pursue (most attractive segment)
Penetrated Market
Set of consumers who are buying the company’s products
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19. (NOT INCLUDED IN COURSE) Vocabulary for Demand Measurement
Market demand
Market forecast
Market potential
Company demand
Company sales forecast
Company sales potential
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20. The Marketing Research Process Schematic
Step 1
Define the problem and research objectives
Step 2
Develop the Research plan
Step 3
Collect the information
Step 4
Analyze the information
Step 5
Present the findings
Step 6
Make the decision
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21. The Marketing Research Process Step 1: Define the Problem and Research objectives
Marketing Management defines the problem
Not too broad
What features should be in our new blackberry model
Not too narrow
Should the internet connectivity be through 3G if we increase plan price by 45%
Balanced, well-thought and result-oriented
What should be enhancements in camera, internet and messenger services compared to existing blackberry
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22. The Marketing Research Process Step 2: Develop the Research plan
Most efficient plan for gathering information
Decisions for:
Data sources
Research Approaches
Research Instruments
Sampling Plan
Contact Methods
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23. The Marketing Research Process Step 2: Develop the Research plan (…contd.)
Decisions for:
Data sources
Secondary data – collected for another purpose
Readily available | Good starting point | Low cost
Research from past models | competitor analysis
Primary data – specifically for this project
Focus of Main research | critical information
Needs to be designed completely based on given problem
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24. The Marketing Research Process Step 2: Develop the Research plan (…contd.)
Decisions for:
Research Approaches
Observational Research
observing of customers (video/voice recorder at service desk selling Blackberry)
Focus Group Research
Gathering of consumers for discussing the problem. Carefully selected and observed (existing customers of blackberry services can be invited)
Survey Research
Learning more about consumers. Mass activity (A survey among existing blackberry users)
Behavioral data
Purchasing behavior data or usage data or preference data (Data from datacenters showing what is usage of different functions)
Experimental Research
A small activity emulating real product/service and getting feedback (Few prototypes given to selected consumers and their behavior/feedback is observed)
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25. Focus Group in Session
Video icon links to Wild Planet snippet on product research methods.
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26. The Marketing Research Process Step 2: Develop the Research plan (…contd.)
Decisions for:
Research Instruments
Questionnaires
A set of questions | carefully developed and tested before circulation
Closed-end questions: MCQs | Open-ended questions: descriptive (A questionnaire developed for users)
Qualitative measures
Qualitative analysis of consumers’ behaviors, activities and interpretation.
May involve psychological tests related to product and their reactions.
Possible only for very small group (observe consumers using phones)
Mechanical devices
Devices (galvanometers, eye cameras) to observe user’s reaction on exposed to product (view user’s experience on seeing a prototype)
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27. Questionnaire Do’s and Don’ts
Ensure questions are free of bias
Make questions simple
Make questions specific
Avoid jargon
Avoid sophisticated words
Avoid ambiguous words
Avoid negatives
Avoid hypotheticals
Avoid words that could be misheard
Use response bands
Use mutually exclusive categories
Allow for “other” in fixed response questions
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28. Question Types—Dichotomous
In arranging this trip, did you contact American Airlines?
 Yes  No
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29. Questionnaires (Contd…) Question Types—Multiple Choice
With whom are you traveling on this trip?
 No one
Spouse
Spouse and children
Children only
Business associates/friends/relatives
An organized tour group
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30. Questionnaires Question Types—Likert Scale
Indicate your level of agreement with the following statement: Small airlines generally give better service than large ones.
 Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree
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31. Questionnaires (Contd…) Question Types—Semantic Differential
American Airlines
Large ………………………………...…….Small
Experienced………………….….Inexperienced
Modern……………………….…..Old-fashioned
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32. Questionnaires (Contd…) Question Types—Importance Scale
Airline food service is _____ to me.
 Extremely important
Very important
Somewhat important
Not very important
Not at all important
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33. Questionnaires (Contd…) Question Types—Rating Scale
American Airlines’ food service is _____.
 Excellent
Very good
Good
Fair
Poor
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34. Questionnaires (Contd…) Question Types— Intention to Buy Scale
How likely are you to purchase tickets on American Airlines if in-flight Internet access were available?
 Definitely buy
Probably buy
Not sure
Probably not buy
Definitely not buy

35. Question Types—Completely Unstructured
What is your opinion of American Airlines?

36. Question Types—Word Association
What is the first word that comes to your mind when you hear the following?
Airline ________________________
American _____________________
Travel ________________________

37. Question Types— Sentence Completion
When I choose an airline, the most important consideration in my decision is: ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

38. Question Types—Story Completion
“I flew American a few days ago. I noticed that the exterior and interior of the plane had very bright colors. This aroused in me the following thoughts and feelings.” Now complete the story. __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

39. Question Types—Picture (Empty Balloons)

40. Question Types—Thematic Apperception Test
Make up a story that reflects what you think is
happening in this picture.

41. Qualitative Measures
Word Association: what word come to mind when they hear the brand name
Projective Techniques: give people an incomplete statement and ask them to complete it.
Visualization: to collect info regarding perception of people
Brand Personification: what kind of people they think when they hear the name of a certain brand.
Laddering: gathering more information from customers by asking them the why question.

42. The Marketing Research Process Step 2: Develop the Research plan (…contd.)
Decisions for:
Sampling Plan
Sampling Unit
Who is to be surveyed
Based on product, problem etc. decision about who is going to form sample (High-end users, corporate clients, access to data networks)
Sample size
How many people to be surveyed
Again based on requirements, budget etc.
General rule: Larger sample => better results (e.g. Total Blackberry user base in Pakistan: 100,000, Sample: 1,000)
Sampling Procedure
How respondents shall be chosen
Probability sampling (simple random, stratified random, cluster sample)
Non-probability sampling (Convenience, judgment, quota) (convenience and judgment sampling for blackberry users)
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43. The Marketing Research Process Step 2: Develop the Research plan (…contd.)
Decisions for:
Contact Methods
Mail Questionnaire
Access to people who cannot or do not want to be interviewed
Simple questionnaire is to be used
Very low response rate (send a questionnaire to existing user with monthly invoice)
Telephonic interview
Quick and convenient. Questions might be clarified easily
Response rate is good | but cannot be too long or personalized (e.g. make a call to 500 of Blackberry users and take 1-2minutes interview)
Personal interview
Most versatile and elaborate method
Most expensive and requires lot of administrative work
Arranged (meeting) | Intercept (in malls etc) (Interviewing at service centers when use r is there for some other purpose)
Online interview
Efficient and highly used
inexpensive | faster | More ‘honesty’ | Versatile using technology
Small and skewed sample | technological problems (Use online advertising or even website to request a survey)
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44. The Marketing Research Process Step 3: Collect the information
This is the execution of Step 2
Most expensive and most prone to error
Errors can be:
Respondents not available. Need to re-engage
(typical for high-end clients)
Respondents refuse to cooperate
Give dishonest or biased answers
(biased because of very recent experience)
Interviewers can be biased or dishonest
(just filling false information)
Still: Getting the right respondents is critical
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45. The Marketing Research Process Step 4: Analyze the information
Data tabulation
Frequency distributions
Statistical analysis
Discover!
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46. The Marketing Research Process Step 5: Present the Findings
Researchers’ findings
Related to management’s defined problem
Irrelevant information not required
(Give a finding of what features are wanted by what kind of customers-users, new users, age-wise etc.)
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47. The Marketing Research Process Step 6: Make the Decision
Management’s task
Based on what researcher has provided
(Marketing and Product Development team takes the final decision based on available results and information)
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48. The Marketing Research Process Overcoming barriers to use of Marketing Research
Narrow conception of research
Uneven (or even low) caliber of researchers
Poor farming of the problem
Late and occasionally erroneous findings
Personality and presentational differences
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