1.03A CQUIRE FOUNDATIONAL KNOWLEDGE OF MARKETING - INFORMATION MANAGEMENT TO UNDERSTAND ITS NATURE AND SCOPE Marketing Marketing Indicator 1.03 Indicator 1.03

T HREE TYPES OF INFORMATION USED IN MARKETING DECISION MAKING Customer Marketing mix Business Environment

C USTOMER I NFORMATION Age Gender Income Education Family size Home ownership Address Occupation How money is spent Attitudes Primary needs Product purchases Purchase frequency Brand preferences Information needs Media preferences Shopping behavior

M ARKETING M IX Basic Products Product Features Services Product packaging Guarantees Repairs Credit Choice Discounts Promotion Methods

B USINESS E NVIRONMENT Type of competition Competitors’ strengths Competitors’ strategies Economic conditions Government regulations New technology Consumer protection Ethical issues Tax policies Proposed laws International markets

W HERE DO COMPANIES GET THIS INFORMATION ??? Internal sources: Customer profile – buying behaviors, shopping patterns, customers demographics and lifestyle research Company records – sales records, expenses, supplier data, production and operation schedules, performance information, sales reports

W HERE DO COMPANIES GET THIS INFORMATION ??? External: Competitor’s records – price, products, market share Government data – price trends, new regulations, laws, future projections Trade and professional organizations – trade journals, newsletters or research reports Commercial Data Information Services – Dun and Bradstreet, AC Nielson Co. Business Publications – Wall Street Journal, Forbes, Business Week, Advertising Age

RESEARCH (C OMPANIES DO HOMEWORK ) Primary research – carried out primarily for an organization’s own use. Secondary research – using someone’s else’s research for your benefit Quantitative – hard data: numbers, percentages of who buys or remembers an advertisement Qualitative – soft data: WHY buyers buy or remember

W HY IS M ARKETING I NFORMATION N EEDED ? To identify potential customers, potential products, marketing opportunities, solve marketing problems, implement marketing plans, and monitor marketing performance.

T HE I MPACT OF M ARKETING I NFORMATION ON M ARKETERS Marketing research is used when a business needs to solve problems. Helps answer questions about what to produce, at what price to sell the products, who will buy the products, and how to promote the products Helps businesses plan their future operations to increase sales and profits. Understand markets. Companies keep track of what happening in current markets.

M ARKET R EPORTS Provide information on markets, their size, structure, key players, market share, trends, prices and more!! Published annually Secondary sources Specifically, what are market reports…..

R ETAIL AUDITS Measure market sales, competitor’s sales, market share, prices and special offers, stock (inventory) levels week by week or day by day. AUDIT – an inspection, correction and verification of business records Example: Team Auto Group sets sales targets each month 10 new vehicles and 15 used vehicles. Are there enough cars on the lot? Is the manufacture (or government) offering a special? Cash for clunkers Is there a new model? Chevy Volt Is this reasonable? Financing not available

C USTOMER SURVEYS Businesses use carefully structured questionnaires to measure customer attitudes, levels of awareness, intentions to purchase, actual purchases and much more.

Q UALITATIVE RESEARCH TECHNIQUES Focus groups and in-depth interviews Simulated test markets Real test markets Consumer panels &feature=related&safety_mode=true&persist_saf ety_mode=1

W HY ALL THIS EFFORT ? Marketing research focuses and organizes marketing information. It ensures that such information is timely and permits entrepreneurs to: Reduce business risks Spot current and upcoming problems in the current market Identify sales opportunities Develop plans of action Provides guidance for a business

I S ALL INFORMATION USEFUL ? Information must be COMPLETE ACCURATE EASY TO USE TIMELY AFFORDABLE COST-EFFECTIVE No grades for effort or sloppy work

W AYS M ARKETERS U SE M ARKETING I NFORMATION Improving the quality of decision-making Tracking problems Maintaining data for customer service Current and forecasted economic and market conditions Designing advertising campaigns Developing promotional plans Selling directly to customers

W AYS M ARKETERS U SE M ARKETING I NFORMATION Analysis----the process of summarizing, combining, or comparing information so that decisions can be made. Reports Examples include Planning a promotional budget. Effectiveness of one retailer in a channel of distribution. Costs of marketing activities for national and international activities. Example: Stouffer’s Lean Cuisine—13 years of market research Develop product Test package design Hold pilot sales in large cities safety_mode=1 safety_mode=1 Track what is happening in current markets Determine major competitors What major competitors are offering Which products consumers prefer Customer satisfaction with product

S ALES AND EXPENSE REPORT INFORMATION Sales report – a business report of sales results, activities, trends, etc. traditionally completed by a sales manager, but increasingly now the responsibility of salespeople. May be required weekly, monthly, quarterly, annually Often includes sales forecasts Estimate: to judge or form an opinion of value of, from imperfect data Fact: information that is undisputed, evidence Predictions: forecasting based on an observation and/or experience

S ALES AND EXPENSE REPORT INFORMATION Expense report – a document that contains all the expenses that an individual has incurred as a result of the business operation. Business expenses may be tax deductible. Examples: travel expenses – mileage, hotel, meals

S ALES AND EXPENSE REPORT INFORMATION Call Reports – Identify who the salesperson met with, if and when the company plans to make a purchase, an estimate of the size of the purchase, and any information the buyer wants from the salesperson. Call reports, however, can be real tools managers can use for coaching, training, market and competitor analysis, and managing department assets.

S ALES AND EXPENSE REPORT INFORMATION Lost Sales Reports – data gathered about orders that were cancelled or returned and why they occurred. This report provides opportunity for improvement within the business. Activity Reports – are used to capture daily information and compare plan of action to obtain established goals. Example, in the sales department an activity report requires salespeople to provide details (# of calls, new accounts opened, displays arranged, etc.) as a measure of their activity in a given period.

S ALES AND EXPENSE REPORT INFORMATION Request and Complaint Reports – data captured to assist business in correcting problems with customers or employees. Handling complaints can be a resource to finding negative issues within business procedures and systems. Businesses can fix the issue and report back to the customer who made the complaint. This practice contributes to developing customer loyalty. What is customer loyalty?

S ALES AND EXPENSE REPORT INFORMATION Product report - types of products that sell best at various times of year; colors or sizes of products customers prefer What types of information is included in sales and expense reports?

I NFORMATION CONTAINED IN SALES AND EXPENSE REPORTS THAT IS MONITORED FOR MARKETING DECISION - MAKING. Market Share Analysis — the percentage of all sales within a market that is held by one brand / product or company. Normally measured by sales revenue or sales volume (the number of units sold) Sales Volume Analysis — A detailed study of an organization's sales, in terms of units or revenue, for a specified period. Accounting Information Spending Profitability Sales Discount on sale? What expenses went into each sale? Cost Inventory Payroll Commission on sale?

C USTOMER R ELATIONSHIP M ANAGEMENT CRM is a business philosophy involving identifying, understanding and providing for your customers while building a relationship with each customer to improve customer satisfaction and maximize profits. CRM = understanding, anticipating and responding to customers’ needs. What information would a company want to gather about its customers?

I NFORMATION ABOUT CUSTOMERS THAT IS MONITORED FOR MARKETING DECISION - MAKING. Demographic data (age, gender, ethnicity) Buying habits (time of day, repeat products, amount spent—full price or on sale, types of products) Ex: Diapers and beer purchased by men on Thursdays and Saturdays Ex: Saturday is day most people do major grocery shopping Credit record Job Income level Marital status Customer requests (what products or varieties are requested that you don’t carry) Receipts (is a certain neighborhood or ZIP code frequenting your establishment more than others)

C OMPETITIVE A NALYSIS I NFORMATION Create detailed profiles on each of your major competitors. Includes: competitor’s background, finances, products, markets, facilities, personnel and strategies. Background location of offices, plants and online History – key personalities, dates, events and trends Ownership, corporate governance and organizational structure

C OMPETITIVE A NALYSIS I NFORMATION Financials P-E ratios, dividend policy, profitability Financial ratios – liquidity and cash flow Profit growth profile Products Products offered, depth and breadth of product line New products developed, new product success, R & D Brands, brand loyalty, brand awareness Patents and licenses Quality control Reverse engineering

C OMPETITIVE A NALYSIS I NFORMATION Marketing Segments served, market shares, customer base, growth rate, customer loyalty Promotional mix, promotional budgets, advertising themes, ad agency used, sales force success rate, online promotional strategy Distribution channels used (direct & indirect), exclusivity agreements, alliances and geographic coverage Pricing, discounts and allowances Promotional allowances: Discounts or cash payments given to wholesalers or retailers who stock large quantities and encourage sales of a product Slotting allowances: Cash premiums paid to retailers to help with the cost of restocking a new product. These premiums are also used to secure the best location for the products on shelves.

C OMPETITIVE A NALYSIS I NFORMATION Facilities Plant capacity, capacity utilization rate, age of plant, plant efficiency, capital investment Personnel Number of employees, key employees and skill sets Strength of management and management style Compensation, benefits, employee morale and retention rates ety_mode=true&persist_safety_mode=1 ety_mode=true&persist_safety_mode=1

C OMPETITIVE A NALYSIS I NFORMATION Corporate and marketing strategies Mission statement, objectives, goals Marketing strategies Growth plans, acquisitions and divestitures Acquisition: purchase a competitor Divestitures: sell a division  What information does a company want on its competitors?

E XPLAIN INFORMATION ABOUT COMPETITORS THAT IS MONITORED FOR MARKETING DECISION - MAKING. USP’s (unique selling points) of our product vs. competition to find our advantage. Is that advantage sustainable? Financial records for public companies (GE, Ford, Apple) Insight into company’s strengths, weaknesses, and future plans (new products, marketing campaigns) Sales volume data

P ROCEDURES FOR IDENTIFYING INFORMATION TO MONITOR FOR MARKETING DECISION - MAKING. Identify needed data Create a plan for collecting, storing and analyzing data Compile a list of secondary sources providing needed data Retrieve needed data Analyze/use data

A CTIVITY 1 Working in pairs select a product’s marketing campaign with which you are familiar. Identify a current problem in marketing. Brainstorm ideas on how to resolve this problem. Create a visual explaining the problem. Present to class for their recommendations.

A CTIVITY 2 – POP QUIZ Complete the vocabulary matching