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

2. 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.

3. 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

4. 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.

5. 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).

6. 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

7. 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

8. 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.

9. 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

10. 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

11. 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

12. 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.

13. 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

14. 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

15. 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

16. 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.

17. 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

18. 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?

19. 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.

20. 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

21. 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?