1. Copyright © 2016 Pearson Education, Inc. 3-1 Chapter 3 Collecting Information and Forecasting Demand

2. Copyright © 2016 Pearson Education, Inc. 3-2 Learning Objectives 1. What are the components of a modern marketing information system? 2. What are useful internal records for a marketing information system? 3. What makes up a marketing intelligence system? 4. What are some influential macroenvironment developments? 5. How can companies accurately measure and forecast demand

3. Copyright © 2016 Pearson Education, Inc. 3-3 Components of a Modern Marketing Information System (MIS) Internal company records Marketing intelligence activities Marketing research

4. Copyright © 2016 Pearson Education, Inc. 3-4 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.

5. Copyright © 2016 Pearson Education, Inc. 3-5 Internal records Internal reports of orders-to-payment cycle Sales information system Prices Costs Inventory levels Receivables Payables Database, warehousing, data mining. Marketing intelligence system

6. Copyright © 2016 Pearson Education, Inc. 3-6 Marketing intelligence Marketing intelligence system: a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment

7. Copyright © 2016 Pearson Education, Inc. 3-7 Improving marketing intelligence Motivate sales force to report new developments Motivate intermediaries to pass along intelligence Hire external experts to collect intelligence Network internally and externally Set up a customer advisory panel Take advantage of government-related data Purchase information from outside research vendors Collect marketing intelligence on Internet

8. Copyright © 2016 Pearson Education, Inc. 3-8 Marketing Intelligence on the internet Independent customer goods and service review forums Distributor or sales agent feedback sites Combonation sites offering customer reviews and expert opinions Customer complaint sites Public blogs

9. Copyright © 2016 Pearson Education, Inc. 3-9 Communicating & Acting on Marketing intelligence The competitive intelligence function works best when it is closely coordinated with the decision-making process –Given the speed of the Internet, it is important to act quickly on information gleaned online

10. Copyright © 2016 Pearson Education, Inc. 3-10 Analyzing the Macroenvironment Needs and Trends –Fad/ unpredictable, short-lived, and without social economic, and political significance. Momental durability. Wight glove Mike Jackson. –Trend/ predictable, durable, and provides strategic direction.. Loosing weight and sliming. –Megatrend/ large economic, social political, and technological change.. Migration, income shift.

11. Copyright © 2016 Pearson Education, Inc. 3-11 Identifying the Major Forces Six major forces in the broad environment Natural Technological Political-legalSocio-cultural Economic Demographic

12. Copyright © 2016 Pearson Education, Inc. 3-12 The Demographic Environment Worldwide population growth Population age mix Ethnic and other markets Educational groups Household patterns Population distribution and density. Race, income, gender, family size, occupation.

13. Copyright © 2016 Pearson Education, Inc. 3-13 CONSUMER PSYCHOLOGY INCOME DISTRIBUTION INCOME, SAVINGS, DEBT, CREDIT, employment, deficits, GDP The Economic Environment

14. Copyright © 2016 Pearson Education, Inc. 3-14 Income distribution/ Types of Economics Subsistence economies/ primitive, fishing Raw-material-exporting economies/ SA Industrializing economies/ Emerging economics, the BRICS Industrial economies/ U.S. WEU, Japan Very low incomes Mostly low incomes Very low, very high incomes Low, medium, high incomes Mostly medium incomes

15. Copyright © 2016 Pearson Education, Inc. 3-15 The Sociocultural Environment/ know your target customers think Views of ourselves Views of society Views of nature Views of the universe Views of organizations Views of others

16. Copyright © 2016 Pearson Education, Inc. 3-16 The Sociocultural Environment Core cultural values –Values are passed from parents to children and reinforced by social institutions Subcultures –Groups with shared values, beliefs, preferences, and behaviors emerging from their special life experiences or circumstances

17. Copyright © 2016 Pearson Education, Inc. 3-17 The natural environment Corporate environmentalism –Opportunities await those who can reconcile prosperity with environmental protection/ care about natural resources, water, energy, pollution, role of government.

18. Copyright © 2016 Pearson Education, Inc. 3-18 The Technological Environment Accelerating pace of change Unlimited opportunities for innovation/ in medicine, hybrid, waste material Varying R&D budgets/ more emphasis on product development rather than research. Copying competitive product Increased regulation of technological change/ more regulations to investigate the unsafe products. Safety and health regulations

19. Copyright © 2016 Pearson Education, Inc. 3-19 NATURAL ENVIRONMENT Environmental Issues: Shortage of raw material Increase energy costs. Anti-pollution pressure.. Governmental protection

20. Copyright © 2016 Pearson Education, Inc. 3-20 The Political-Legal Environment LAWS/ two major trends in business legislation and special interest groups. Consumer protection laws. GOVERNMENT AGENCIES/ monitor competition and Monopoly PRESSURE GROUPS/ product safety and benefits, rights and power of buyers, consumerism to real cost of products and services, nitration quality and freshness.

21. Copyright © 2016 Pearson Education, Inc. 3-21 Forecasting and Demand Measurement Market demand measures –Potential market/ consumers with sufficient interests. –Available market/ consumers with interests, income, access. The qualified market. –Target market/ the qualified market the firm decides to pursue, chosen from available market. –Penetrated market/ the actual consumers who are buying the product.

22. Copyright © 2016 Pearson Education, Inc. 3-22 Figure 3.1 Ninety Types of Demand Measurement

23. Copyright © 2016 Pearson Education, Inc. 3-23 Demand measurement vocabulary Market demand (Figure 3.2)

24. Copyright © 2016 Pearson Education, Inc. 3-24 Market demand vocabulary Market share/ % of company’s sale to industry. Market-penetration index/ comparing current and potential demands. Low index indicate growth potential in the industry. The high index indicates it’s expensive to attract new customers. And competition becomes price-based. Share-penetration index/ comparing current and potential market share yields to share-penetration index. When low expand the share.

25. Copyright © 2016 Pearson Education, Inc. 3-25 Demand measurement vocabulary Market forecast/ related to market expenditure. Market potential/ is the limit approached by market demand. It assumes the ownership % of a product in population. The lower the % the higher is market potential. Company demand/ is the company's estimated share of demand at alternative levels of co. marketing efforts for a given period of time. Company sales forecast/ expected level of sale based on a plan.. Company sales potential/ the absolute limit of co. demand.

26. Copyright © 2016 Pearson Education, Inc. 3-26 Estimating Current Demand Total market potential –Chain-ratio method

27. Copyright © 2016 Pearson Education, Inc. 3-27  $1,ooo* 0.40* 0.20* 0.40* 0.30* 0.40 = $3.84 expected to be spent on light beer per capita* population (6ms) = $23.04M Demand.  Discretionary Income spent on food per capita*% spent on beverages*% spent on alcohol *% spent on beer*% spent on light beer *population= Demand

28. Copyright © 2016 Pearson Education, Inc. 3-28 Estimating Current Demand Area market potential –Market-buildup method/ used by business marketers, to identify potential buyers in each market and estimating their potential purchase. –Multiple-factor index method/ the same as the buildup method. Both are not accurate.

29. Copyright © 2016 Pearson Education, Inc. 3-29 brand development index (BDI) Table 3.5

30. Copyright © 2016 Pearson Education, Inc. 3-30 Estimating Current Demand Industry sales and market share/ as a % of total industry estimated sales.

31. Copyright © 2016 Pearson Education, Inc. 3-31 Estimating future demand/ Estimating future demand/ forecasts are based on: what people say, or do, or have done. Survey of buyers’ intentions –Forecasting and purchase probability scale Composite of sales force opinions Expert opinion Offer the product or sample to measure actual demand. Past-sales analysis/ analyze past sales (the records). Market-test method/ surveying intention to buy.

32. Copyright © 2016 Pearson Education, Inc. 3-32