1. A Framework for Marketing Management
Chapter 3
Understanding Markets, Market Demand, and the Marketing Environment
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Chapter Questions
What are the components of a modern marketing information system?
How can marketers use intelligence systems and marketing research?
How can demand be more accurately measured and forecasted?
What are some important macroenvironmental developments?
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3. Marketing Information System (MIS)
Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
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MIS Resources
Internal records
Marketing intelligence
Marketing research
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5. Marketing Insights vs. Marketing Research
Marketing insights provide diagnostic information about how and why certain effects are observed in the marketplace, and what that means to marketers.
Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.
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6. Marketing Research Process
Define the problem and research objectives
Develop the research plan
Collect the information
Analyze the information
Present the findings
Make the decision
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7. Step 1: Define the Problem and Research Objectives
Specify decision alternatives
State research objectives
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8. Step 2: Develop the Research Plan
Identify data sources
Design research approach
Develop research instruments
Design sampling plan
Select contact methods
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Data Sources
Secondary data—collected for another purpose and already exist somewhere.
Primary data—freshly gathered for a specific purpose or a specific research project.
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Research Approaches
Observational research
Focus-group research
Survey research
Behavioral data
Experimental research
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Research Instruments
Questionnaires
Qualitative research techniques
Technological devices
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Sampling Plan
Sampling unit—Who should we survey?
Sample size—How many people should we survey?
Sampling procedure—How should we choose the respondents?
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Contact Methods
Mail questionnaire
Telephone interview
Personal interview
Online interview
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14. Forecasting and Demand Measurement
Which market to measure?
Potential market—set of consumers who have sufficient interest in a market offer.
Available market—set of consumers who have interest, income, and access to a particular offer.
Target market—the qualified available market that the company decides to pursue.
Penetrated market—set of consumers who are buying the company’s product.
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Demand Measurement
Market demand—the total volume for a product 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.
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16. Company Demand and Sales Forecast
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.
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17. Estimating Current Demand
Total market potential—the maximum number of sales that might be available to all of the industry’s firms during a given period, under a given level of industry marketing effort and environmental conditions.
Area market potential—the market potential of a specific location:
Market buildup method
Multiple-factor method
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18. Estimating Future Demand
Survey of buyers’ intentions
Composite of sales force opinions
Expert opinion
Past-sales analysis
Market-test method
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19. Macroenvironmental Trends and Forces
Demographic
Economic
Political-legal
Natural
Social-cultural
Technological
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20. Demographic Environment
Worldwide population growth
Population age mix
Ethnic markets
Educational groups
Household patterns
Geographical shifts in population
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Economic Environment
Income distribution
Savings, debt, and credit availability
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22. Social-Cultural Environment
Views of themselves
Views of others
Views of organizations
Views of society
Views of nature
Views of the universe
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Natural Environment
Shortage of raw materials
Increased cost of energy
Increased pollution levels
Changing role of governments
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24. Technological Environment
Accelerating pace of technological change
Unlimited opportunities for innovation
Varying R & D budgets
Increased regulation of technological change
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25. Political-Legal Environment
Increase in business legislation
Growth of special-interest groups
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