Module 3

1. 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?