CAPTURING

1. PART CAPTURING 2 MARKETING INSIGHTS Marketing Management - An Asian Perspective 4th Edition

2. Chapter GATHERING 3 Information & Scanning the Environment Marketing Management - An Asian Perspective 4th Edition

3. In this chapter, we address the following questions: • What are the components of a modern marketing information system? • What are useful internal records? • What is involved with a marketing intelligence system? • What are the key methods for tracking & identifying opportunities in the macroenvironment? • What are some important macroenvironment developments? Marketing Management - An Asian Perspective 4th Edition

4. Adidas’ campaign against counterfeits in the Philippines Counterfeits in Asia • 5-7 % global merchandise trade • $512b in lost sales 2004 • 60% - from China • fakes close to real thing • spend more to stop them Marketing Management - An Asian Perspective 4th Edition

5. Components of a Modern MarketingInformation System To carry out analysis, planning, implementation & control, Marketing managers need Marketing Information System MIS • Assess information needs, develop & distribute - timely manner Marketing Management - An Asian Perspective 4th Edition

6. Table 3.1 Information Needs Probes Marketing Management - An Asian Perspective 4th Edition

7. Components of a Modern MarketingInformation System MIS - 3 components • Internal records system • Order-to-payment cycle & sales • Marketing intelligence system • Daily developments - market environment • Marketing research system • Collection, analysis & reporting of data relevant to marketing situation Marketing Management - An Asian Perspective 4th Edition

8. Internal Records & Marketing IntelligenceThe Order-to-Payment Cycle • Heart of internal records system • Orders sent to firm; Invoices sent • Out-of-stock items back-ordered • Customers favor timely delivery • Internet - speed, accuracy, efficiency Marketing Management - An Asian Perspective 4th Edition

9. Internal Records & Marketing IntelligenceSales Information Systems • Marketing needs accurate current sales reports • Carefully interpret data - get right signals 7-Eleven chain Japan customizes merchandise • Use sophisticated sales information system Marketing Management - An Asian Perspective 4th Edition

10. Internal Records & Marketing IntelligenceDatabases, Data Warehousing & Data Mining • Databases (customer/product/sales) • Score customers - frequency & value • Send offer to highest scores • Better response rate & save mail expense • Data warehousing - data easily accessible • Data mining - insights into neglected segments Marketing Management - An Asian Perspective 4th Edition

11. Internal Records & Marketing IntelligenceDatabases, Data Warehousing & Data Mining • Manage database: business integration software Eg: Ben & Jerry’s • Pint tracking number put in database • Sales see flavors with most sales • Marketing check online orders Marketing Management - An Asian Perspective 4th Edition

12. Internal Records & Marketing IntelligenceThe Marketing Intelligence System marketing intelligence system procedures & sources to get information on developments in marketing environment • Books, newspapers, trade publications • Talk to customers, suppliers, distributors • Meet other company managers Marketing Management - An Asian Perspective 4th Edition

13. Internal Records & Marketing IntelligenceThe Marketing Intelligence System Improve marketing intelligence quality HOW? • Train sales - spot developments • Motivate middlemen - share intelligence • Network externally • Customer advisory panel • Government data resources • Purchase data from suppliers • Online customer feedback systems Marketing Management - An Asian Perspective 4th Edition

14. Analyzing the MacroenvironmentNeeds & Trends • Fad • Unpredictable, short-lived, little significance • Trend • Direction of events with some momentum & durability • Megatrends • Major social, economic, political & technological changes - long-lasting influence Marketing Management - An Asian Perspective 4th Edition

15. Analyzing the MacroenvironmentNeeds & Trends • Successful companies respond to unmet needs & trends • Eg FedEx was created to meet need for next-day mail delivery • Market research assess profit potential of opportunity Marketing Management - An Asian Perspective 4th Edition

16. Analyzing the MacroenvironmentIdentifying the Major Forces Global forces affect companies & consumers Firm must monitor 6 major forces: • Demographic • Economic • Social-cultural • Natural • Technological & • Political-legal Marketing Management - An Asian Perspective 4th Edition

17. The Demographic Environment • This store is in old part of town in Ipoh Malaysia • Singer sewing machines less popular in urban areas • More working women & smaller families • Suburban towns - good sales Marketing Management - An Asian Perspective 4th Edition

18. The Demographic Environment • Worldwide population growth • Changing mixes of age, ethnic composition & educational levels • Rise of non-traditional families • Large geographic shifts in population • Micromarketing from mass marketing Marketing Management - An Asian Perspective 4th Edition

19. The Demographic EnvironmentWorldwide Population Growth • Main demographic force - population • Population explosion –major concern • Insufficient food, overcrowding, pollution • Large population - attractive potential population ≠ markets unless sufficient purchasing power Marketing Management - An Asian Perspective 4th Edition

20. The Demographic EnvironmentWorldwide Population Growth A Mattel ad in ChineseHot Wheels toyHeadline reads: “Hot Wheels Performance Tracks Great Varieties, Great Challenges!” • Eg: China - Skyrocketing population • Limit families to 1 child – get full attention • Trend – companies like Mattel & Lego - exploit opportunity aggressively Marketing Management - An Asian Perspective 4th Edition

21. Populations vary in age mix Global trend Aging population Falling fertility rates Future Asian retiree: affluent, cosmopolitan Good market for travel, entertainment The Demographic EnvironmentPopulation Age Mix Marketing Management - An Asian Perspective 4th Edition

22. 6Age Groups: Preschool School-age children Teens Young adults age 25 to 40 Adults age 40 to 65 Older adults age 65 & up The Demographic EnvironmentPopulation Age Mix Most populous groups shape marketing environment Marketing Management - An Asian Perspective 4th Edition

23. The Demographic EnvironmentEthnic & Other Markets • Countries vary in ethnic & racial makeup • Ethnic groups - specific wants & buying habits • Asia’s ethnic diversity: > 20 major languages & > 12 major religions in 12 Asian countries Marketing Management - An Asian Perspective 4th Edition

24. Asians desire for knowledge demand for Books, education Offshore campuses Joint degree programs Online courses The Demographic EnvironmentEducational Groups Marketing Management - An Asian Perspective 4th Edition

25. 5 educational groups: Illiterates High school dropouts High school degree holders College degree holders Professional degree holders The Demographic EnvironmentEducational Groups Marketing Management - An Asian Perspective 4th Edition

26. The Demographic EnvironmentHousehold Patterns Traditional household • Husband, wife & children Non-traditional household • Singles • Single-parent families • Divorcees Growing rapidly • Distinctneeds, buying habits • Eg smaller furniture, food sets • Singles can spend > family Marketing Management - An Asian Perspective 4th Edition

27. The Demographic EnvironmentGeographical Shifts in Population • Migration between/within countries • Eg 1997 - Hong Kong reverted to China • Hong Kongers migrate to other countries & increase demand for housing & education • Marketers target these new & successful population members Marketing Management - An Asian Perspective 4th Edition

28. Other Major MacroenvironmentsEconomic Environment Markets need purchasing power & people Economy’s purchasing power depends on • Current income • Prices • Savings • Debt • Credit availability Strong impact if products geared - high-income & price-sensitive consumers Marketing Management - An Asian Perspective 4th Edition

29. Other Major MacroenvironmentsEconomic Environment - INCOME DISTRIBUTION 4 types of industrial structures: • Subsistence economies • Raw-material-exporting economies • Industrializing economies • Industrial economies Shifting income distribution in countries - affluence levels rising Marketing Management - An Asian Perspective 4th Edition

30. Other Major MacroenvironmentsEconomic Environment - INCOME DISTRIBUTION 5 income-distribution patterns: • Very low incomes • Mostly low incomes • Very low & high incomes • Low • Medium, high incomes • Mostly medium incomes Marketing Management - An Asian Perspective 4th Edition

31. Other Major MacroenvironmentsEconomic Environment - INCOME DISTRIBUTION Marketers to consider: • Cross-national income differences • Intracountry variations in income • Income gap between more & less developed Asian countries may narrow over time Marketing Management - An Asian Perspective 4th Edition

32. Other Major MacroenvironmentsEconomic EnvironmentSAVINGS, DEBT & CREDIT AVAILABILITY • Consumer expenditures affected by savings, debt & credit availability Eg Japan • Recession ate into savings • Prefer eating in - more ready-to-eat meals sold • 7-Eleven increased food market • 7-Eleven - bill payments services Marketing Management - An Asian Perspective 4th Edition

33. Other Major MacroenvironmentsEconomic EnvironmentOUTSOURCING & FREE TRADE • Outsourcing - migration of jobs • Eg: In 2003, IBM moved jobs to India & China • Competitive necessity but unemployment • Asian firms benefit - outsourcing trend • Outsourcing cut 20-70 % labor costs Marketing Management - An Asian Perspective 4th Edition

34. Other Major MacroenvironmentsSocial-Cultural Environment • Society shapes beliefs, values & norms - tastes & preferences • Understand people’s views of themselves, others, organizations etc • Market products - match society’s values & needs of different subcultures Marketing Management - An Asian Perspective 4th Edition

35. Other Major MacroenvironmentsSocial-Cultural Environment Views of themselves • Groups with different views of themselves Views of others • Concerned with social problems, seek “own kind” & relationships • Market for social-support services • Market for “social surrogates” - television & Internet chat rooms Marketing Management - An Asian Perspective 4th Edition

36. Other Major MacroenvironmentsSocial-Cultural Environment More Japanese teenagers view themselves as individualists Marketing Management - An Asian Perspective 4th Edition

37. Other Major MacroenvironmentsSocial-Cultural Environment Views of organizations • Attitudes toward organizations vary • Decline in loyalty • Downsizings bred distrust • Companies: win back employee confidence Views of society • Consumption patterns - social attitude • Makers - high achievers - eat & live well • Escapers,seekers: market for movies, camping Marketing Management - An Asian Perspective 4th Edition

38. Other Major MacroenvironmentsSocial-Cultural Environment Malaysian photo studio – women return to their roots - photos taken dressed in traditional costume Marketing Management - An Asian Perspective 4th Edition

39. Other Major MacroenvironmentsSocial-Cultural Environment Views of nature • Master nature - technology • Concerned – fragile nature, finite resources • Demand for eco-tours to the wild Views of the universe • Asia - multi religious • Conviction & practice varies • Non-religious: self-fulfillment & gratification Marketing Management - An Asian Perspective 4th Edition

40. Other Major MacroenvironmentsSocial-Cultural Environment The modern & traditional in Asia Coca-Cola vending machine next to Chinese temple Marketing Management - An Asian Perspective 4th Edition

41. Other Major MacroenvironmentsSocial-Cultural Environment Other cultural characteristics: • High Persistence- Core Cultural Values • Hold core beliefs & values that persist • Easier to change secondary than core • Existence of Subcultures- shared values • Shifts of Secondary Cultural Values Over Time • Core values - cultural swings do take place Marketing Management - An Asian Perspective 4th Edition

42. Other Major MacroenvironmentsNatural Environment Marketers to take note of: • Shortages of raw materials • Increased costs of energy • Increased pollution levels • Changing role of governments - protect environment Marketing Management - An Asian Perspective 4th Edition

43. Other Major MacroenvironmentsNatural Environment • Nature deteriorates - global concern • Air & water pollution - dangerous levels • Companies - practices, protect nature • Green products - protect environment • Change consumer attitudes - role to protect environment Marketing Management - An Asian Perspective 4th Edition

44. Other Major MacroenvironmentsTechnological Environment • Accelerating pace of change • Computers, internet - reduce auto pollution • Unlimited opportunities for innovation • Virtual reality - consumer reactions to products • Varying R&D budgets • Content to copy products - slight changes • Increased regulation- technological change • Public safety Marketing Management - An Asian Perspective 4th Edition

45. Other Major MacroenvironmentsPolitical-Legal Environment • Laws, government & pressure groups influence & limit firms & individuals • Marketers must work: • Within laws - business practices • Engage - special-interest groups • Exploit opportunities - market reform • Deal with corruption Marketing Management - An Asian Perspective 4th Edition

46. Other Major MacroenvironmentsPolitical-Legal Environment INCREASE IN BUSINESS LEGISLATION • But marketers can get around regulations Eg: Dahongying • Chinabans Tobacco advertising • Yet, Dahongying - sells cigarettes - seen on TV, billboards & in-store displays • Why? Dahongying has education business & libraries with same name Marketing Management - An Asian Perspective 4th Edition

47. Other Major MacroenvironmentsPolitical-Legal Environment INCREASE IN BUSINESS LEGISLATION To protect: • Companies - unfair competition • Consumers - unfair business practices • Society - unbridled business behavior “At what point do costs of regulation exceed the benefits? Marketing Management - An Asian Perspective 4th Edition

48. Other Major MacroenvironmentsPolitical-Legal Environment Shanghai - KFC clone • Colors • Colonel Sanders icon Beijing – KFC clone operates next to KFC Marketing Management - An Asian Perspective 4th Edition

49. Other Major MacroenvironmentsPolitical-Legal Environment INCREASE IN BUSINESS LEGISLATION • Protect home industries • Eg KFC Bangalore closed - overuse of MSG • Rumors - closed to protect local retailers • Counter protectionistic policies, foreign firms - new local brands • Eg “Made-in-Thailand” Heineken beer Marketing Management - An Asian Perspective 4th Edition

50. Other Major MacroenvironmentsPolitical-Legal Environment GROWTH OF SPECIAL-INTEREST GROUPS • Consumerist movement - strengthen rights & powers of buyers • Eg: true interest cost of loan • Basic ingredients in product • Personal data - customized products - privacy issues - public policy issue • Consumer affairs - policies - consumer complaints Marketing Management - An Asian Perspective 4th Edition