Gathering Information and Scanning the Environment 3 Gathering Information and Scanning the Environment Marketing Management, 13th ed

Chapter Questions What 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? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-2

MIS Systems Provide Information on Buyer Preferences and Behavior: Dupont’s Pillow Study Pillow Segments 23% - stackers 20% - plumpers 16% - rollers or folders 16% - cuddlers 10% - smashers Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-3

What 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. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-4

Table 3.1 Information 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? Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-5

Internal Records and Marketing Intelligence Order-to-Payment Cycle Sales Information System Databases, Warehousing, Data Mining Marketing Intelligence System Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-6

The Order Payment Cycle Sales representatives, dealers and customers send orders to the firm. The sales department prepares invoices, transmits copies to various departments. Shipped items generate shipping and billing documents that go to various departments. E.g., Cisco saved $24 million in material cost and $51 million on Labor cost Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-7

Sales Information System Marketing managers need timely and accurate reports on current sales. Technological gadgets are revolutionizing sales information system and have representative up-to- second information. E.g., Wal-Mart Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-8

Databases, Data warehousing & Data Mining Customer Databases (attitudes, interests, opinions) Product Databases Salesperson Database Warehousing Data: Easily accessible Mining the Data: Fresh insight s into neglected customer segments, recent customer trends and other useful information Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-9

The Marketing Intelligence System A set of procedures and sources managers use to obtain everyday information about developments in the marketing department. Marketing managers collect marketing intelligence by reading newspapers, trade publications, talking to the customers, suppliers and distributors and even meeting with other company managers. Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-10

Steps to Improve Marketing Intelligence Train sales force to scan for new developments Motivate channel members to share intelligence Network externally (Purchase competitors product & Trade shows) Utilize a customer advisory panel Utilize government data resources Purchase information (Syndicated) Collect customer feedback online Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-11

Table 3.2 Secondary Commercial Data Sources Nielsen SAMI/Burke MRCA Simmons By clicking on the video icon, you can launch a short video clip about Burke’s research process. Information Resources, Inc. Arbitron Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-12

Fad, Trends & Megatrends Fad: Unpredictable, short-lived, and without social, economic or political significance. Trend: Direction or sequence of events that has some momentum and durability. Reveals the shape of future. Megatrends: Large social, economic, political and technological changes, slow to form, influence us for 7-10 years or longer Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-13

Sources of Competitive Information Independent customer goods and service review forums Distributor or sales agent feedback sites Combination sites offering customer reviews and expert opinions Customer complaint sites Public blogs Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-14

Trends Shaping the Business Landscape Profound shifts in centers of economic activity (Asia vs. Europe) Change in consumer landscape (developing vs. developed economies) Technological connectivity Scarcity of well-trained talent (more technical education in developing countries) Increase in scrutiny of big business practices (social marketing) Increase in demand for natural resources (more people will require more food) Emergence of new global industry structures (Bell shape + corporate borders blurrier) Ubiquitous access to information (Knowledge production is growing) Management shifts from art to science (more calculated decisions) Increases in public-sector activity (social services) Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-15

Environmental Forces Demographic Political-Legal Economic Technological Socio-Cultural Natural Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-16

Population and Demographics Educational groups Literacy rate (male/ female) Household patterns Joint family vs. Independent Geographical shifts Urban vs. Rural Population growth 76% in less developed Population age mix Blend of young & old Ethnic markets Diversity of consumers Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-17

Income Distribution in India by NCAER Economic Environment Purchasing Power in an economy depends on income, price, savings, debts and credit availability Income Distribution in India by NCAER Destitute Rs16,000 (1.2%) Aspirants Rs16,000-22,000 (32.5%) Climbers Rs22,000-45,000 (54.1%) Consuming class Rs45,000-215,000 (44%) Rich Rs215,000+ (33%) Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-18

Social-Cultural Environment: Relationship to themselves, to others, to organizations, to society, to nature & to universe Topography Languages Cultures Religious Believes Diversity Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-19

Table 3.3 Most Popular American Leisure Activities Reading TV watching Spending time with family Going to movies Fishing Computer activities Gardening Renting movies Walking Exercise Listening to music Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-20

Natural Environment Shortage of raw Materials: Water & Gas Increased energy costs: Electricity & Petrol Anti-pollution pressures: Recycling Centers Governmental Protections: CNG Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-21

Technological Environment Pace of change: Lift to Microchip Opportunities for innovation: Cloning to Robotics Varying R&D Budgets: Innovative Works Increased regulation of change: Rules & Regulations Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice Hall 3-22

Political-Legal Environment: Laws, Government Agencies & Pressure Groups Increase in Business Legislation: To protect companies from unfair competition To protect consumers from unfair business practices To protect the society from unbridled business behavior To charge businesses a social cost created by the products/production Growth of Special Interest Groups Safety-Hazardous to life products Information-Ingredients Choice- Many items Representation- Consumer rights Redressal- Unscrupulous exploitation of consumers Consumer education-The right to consumer education