Researching and Analyzing Marketing Opportunities in the Environment Module 3 Researching and Analyzing Marketing Opportunities in the Environment Kotler’s Chapter 4 and 5

Chapter 4: Gathering Information and Measuring Market Demand Learning Objectives 1. Describe the components of a marketing information system. 2. Describe the steps in the marketing research process and how one would design a marketing research project. 3. Describe how companies estimate current and future demand.

Chapter 4/Objective 1: The components of a marketing information system. Marketing Information System (MIS) Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate info to mktg decision makers. Made up of Internal Records System, Marketing Intelligence System, Marketing Research System, and Marketing Decision Support System

Chapter 4/Objective 1: The components of a marketing information system cont. Internal Records System Order-to-payment cycle - EDI, intranets can help Sales Information Systems - up-to-date sales figures Need to determine info needs Marketing Intelligence System -everyday info A set of procedures and sources used by managers to obtain everyday info about developments in the mktg environment. Get salespeople, channel members, and customers to communicate intelligence. Use mystery shoppers, buy outside information, learn about competition, and develop a marketing information center to collect/share information.

Chapter 4/Objective 1: The components of a marketing information system cont. Marketing Research System - specific questions The systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation (i.e. to answer a specific marketing question - not day-to-day marketing information). Marketing Decision Support System - tech A coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action (i.e. use of technology to utilize information for better marketing decision making).

Chapter 4/Objective 2: The steps in the marketing research process Five Basic Steps 1. Define the problem and research objectives Key step because if misdefine the problem the other steps are useless. The research can be exploratory, descriptive, or causal based on nature of defining the problem. 2. Develop the research plan 3. Collect the information 4. Analyze the information 5. Present the findings

Chapter 4/Objective 2: The steps in the marketing research process Step Two - Develop the Research Plan Determine data sources, research approaches, research instruments, sampling plan, and contact methods. Data Sources - primary or secondary Research Approaches - observation, focus groups, surveys, behavioral data, and experiments Research Instruments - questionnaires or mechanical instruments (ex. Nielsen box measuring TV viewing) Sampling Plan - who, how many, how chosen Contact Methods - mail, phone, personal, or online

Chapter 4/Objective 2: The steps in the marketing research process Step Three - Collect the Information Need to be careful here to avoid bias. Step Four - Analyze the Information Use statistical techniques and decision models to transform data into useful information. Step Five - Present the Findings Communicate findings clearly and effectively.

Chapter Four/Objective Three: Estimate Current/Future Demand Market Demand - the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program. Market Potential - the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment Company Demand - the company’s estimated share of market demand at alternative levels of company marketing effort in a given time period Company Sales Forecast - the expected level of company sales based on a chosen marketing plan and an assumed marketing environment

Chapter Four/Objective Three: Estimate Current/Future Demand Estimating Current Demand Total Market Potential = potential number of buyers x average quantity purchased x price Area Market Potential - estimate territories Market-Buildup Method (business markets) Identify buyers and estimate their potential purchases Multiple-Factor Index method (consumer markets) Determine factors that impact purchase (ex. population size, income level) and weight them

Chapter Four/Objective Three: Estimate Current/Future Demand Estimating Future Demand Look at what people say, what people do, or what people have done. Survey of Buyers’ Intentions Composite of Sales Force Opinions Expert Opinion Past Sales Analysis - ex. time-series analysis Market-Test Method

Chapter 5: Scanning the Marketing Environment Learning Objectives 1. Describe what are the trends and why they are so important for marketers to address. 2. Describe the major forces in the macroenvironment and how they influence marketing.

Chapter 5/Objective 1: Trends Trend - a direction or sequence of events that have some momentum and durability has longevity, is observable across several market areas and consumer activities, and is consistent with other significant indicators occurring at the same time Fad - unpredictable, short-lived, without social, economic, and political significance Megatrends - large, social, economic, political and technological changes that are slow to form, and once in place, influence for 7-10 years+ (ex. global economy) Need to first identify trend and then assess its’ implications

Chapter 5/Objective 2: Major Forces in Macroenvironment The external environment presents both opportunities and threats that marketers must address. Demographic Economic Natural Technological Political-Legal Social-Cultural

Chapter 5/Objective 2: Major Forces in Macroenvironment Demographic Environment - need to identify key characteristics, analyze purchasing behavior, and determine media preference Worldwide population growth - highest in 3rd world Population age mix - varies by country Ethnic markets - may have distinct buying patterns Educational groups - literacy rates, % college educated Household patterns- non-traditional households Geographical Shifts in Population Shift from a Mass Market to Micromarkets

Chapter 5/Objective 2: Major Forces in Macroenvironment Economic Environment Income Distribution 4 types of industrial structures: subsistence, raw material exporting, industrializing, and industrial Savings, Debt, and Credit Availability Marketers must pay attention to changes in incomes, cost of living, interest rates, savings, and borrowing patterns as will impact business.

Chapter 5/Objective 2: Major Forces in Macroenvironment Natural Environment - deterioration of the natural environment is a global concern Shortage of Raw Materials Increased Energy Costs Increased Pollution Levels Changing Role of Governments in effort to promote clean environment; varies by country

Chapter 5/Objective 2: Major Forces in Macroenvironment Technological Environment - impacts new products and new processes (way to do things and market products) Accelerating Pace of Technological Change Unlimited Opportunities for Innovation Varying R&D Budgets Increased Regulation of Technological Change - how will this impact the Internet?

Chapter 5/Objective 2: Major Forces in Macroenvironment Political-Legal Environment Legislation Regulating Business To protect companies from unfair competition, to protect consumers from unfair business practices, and to protect the interests of society from unbridled business behavior. Consider local, state, national, international laws Growth of Special Interest Groups Political-Action Committees lobbying efforts.

Chapter 5/Objective 2: Major Forces in Macroenvironment Social-Cultural Environment People’s perceptions of themselves, others, organizations, society, nature, and the universe all effect buying patterns. High Persistence of Core Cultural Values Core beliefs/values persist while secondary beliefs/ values are more open to change. Existence of Subcultures. Shifts of Secondary Cultural Values Through Time

Module 3 - Researching and Analyzing Marketing Opportunities in the Environment Chapter 4: Gathering Information and Measuring Market Demand. Chapter 5: Scanning the Marketing Environment Any Questions?