3
Gathering Information and
Scanning the Environment
Marketing Management, 13th ed
Chapter Questions
• What are the components of a modern
marketing information system?
• What are useful internal records?
• What is involved in a marketing intelligence
system?
• What are the key methods for tracking and
identifying opportunities in the macro
environment?
• What are some important macro environment
developments?
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What is a
Marketing Information System (MIS)?
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.
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Components of the Marketing-Information Systems
Marketing-Information System
MarketingInternal
Data
Marketing
Intelligence
Marketing
Science
Marketing
Research
Accounting
Records
Observation Outside Data Analytical
Systems
Quantitative
Qualitative
• Sales
• Costs
• Inventories
• Cash flows
• Accounts
receivable
and payable
• Sales Force
• Dealers and
distributors
• Suppliers
• Executive
awareness
• Survey
research
• Telephone
• Mail
• Personal
observation
• Experiment
• Projective
tests
• Focus
groups
• Census
• Trade
association
data
• Trade press
• Syndicated
awareness
• Statistical
analysis
• Model
building
Marketing MIS
• Supports managerial activities in
product development, distribution,
pricing decisions, and promotional
effectiveness
Databases of
internal data
Business
transactions
Transaction
processing
systems
Databases of
external data
Databases
of valid
transactions
for each
TPS
Marketing
MIS
Manufacturing
DSS
Marketing
applications
databases
Sales by customer
Sales by salesperson
Operational
databases
Sales by product
Pricing report
Total service calls
Customer satisfaction
Manufacturing
ES
Inputs to Marketing MIS
• Strategic plan and corporate policies
• The Transaction Processing Systems
• External sources:
• The competition
• The market
Marketing MIS Subsystems and
Outputs
•
•
•
•
Marketing research
Product development
Promotion and advertising
Product pricing
Information Needs Probes
• What decisions do you regularly make?
• What information do you need to make these
decisions?
• What information do you regularly get?
• What special studies do you periodically
request?
• What information would you want that you
are not getting now?
• What are the four most helpful improvements
that could be made in the present marketing
information system?
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Internal Records & Marketing
Intelligence
• Marketing Managers rely on internal
reports of orders ,sales ,prices,cost etc
• By analyzing this information they can
spot important opportunities and
problems
The order Payment Cycle
• Heart of Internal Record System
Internal Records and
Marketing Intelligence
• Order-to-payment cycle—send orders, prepares
invoices, transmit copies to various departments,
and back-orders out-of-stock items
• Sales information system—timely and accurate
reports on current sales
• Databases, warehousing, data mining--customer,
product, and salesperson and combine data from the
different databases.
• Marketing intelligence system—a set of
procedures and sources managers use to obtain
everyday information about developments in the
marketing environment.
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Now
• Now (days) improved order payment cycle
is required
• Customers favor firms that can promise
timely delivery.
• Order-Pay can also be done online. This
process is called as EDI-Electronic Data
Interface.
• E.G., Cisco, Dell, Ebay
Data Mining
• It is the process of analyzing data from different
perspectives and summarizing it into useful
information - information that can be used to
increase revenue, cuts costs, or both.
• It allows users to analyze data from many different
dimensions or angles, categorize it, and summarize
the relationships identified.
• Technically, data mining is the process of finding
correlations or patterns among dozens of fields in
large relational databases.
Example of Data Mining
•One Midwest grocery chain used the data mining capacity of Oracle
software to analyze local buying patterns.
•They discovered that when men bought diapers on Thursdays and
Saturdays, they also tended to buy beer.
•Further analysis showed that these shoppers typically did their weekly
grocery shopping on Saturdays.
•On Thursdays, however, they only bought a few items. The retailer
concluded that they purchased the beer to have it available for the
upcoming weekend.
•The grocery chain could use this newly discovered information in various
ways to increase revenue. For example, they could move the beer display
closer to the diaper display. And, they could make sure beer and diapers
were sold at full price on Thursdays
Marketing Intelligence System
• It is a process of acquiring and analyzing information in
order to:
• understand the market;
• determine the current and future needs and preferences,
attitudes and behavior of the market;
• assess changes in the business environment that may affect
the size and nature of the market in the future.
• A set of procedures and sources used by managers to
obtain everyday information about developments in
the marketing environment
Steps to Improve Marketing
Intelligence
• Train sales force to scan for new developments
(make intelligence gathering important to salespeople)
• Motivate channel members to share intelligence
(hire specialists to gather marketing intelligence—
mystery shoppers)
• Network externally (purchase competitors’ products;
attend open houses and trade shows; read
competitors’ published reports; etc.)
• Utilize a customer advisory panel (representative
customers or company’s largest customers)
• Utilize government data sources (U.S. Census data,
etc.)
• Collect customer feedback online (online customer
review boards, discussion forums, chat rooms, and
blogs)
• Purchase information (A.C. Nielsen Company and
other information
sources)
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Secondary Commercial Data Sources
• Nielsen—tracks sales of consumer package goods and
brands, gathered at the point of sale in retail stores of all types
(e.g., supermarkets through scanner data, television
audiences).
• MRCA (Medium Resolution Coverage Area)—data on weekly
family purchases of consumer products, and home food
consumption.
• Information Resources—supermarket scanner data and
data on the impact of supermarket promotions.
• SAMI/Burke—reports on warehouse withdrawals to food store
in selected market areas and supermarket scan data.
• Simmons—annual reports covering television markets,
television markets, sporting goods, and proprietary drugs with
demographic data by sex, income, age, and brand
preferences.
• Arbitron—selling data to subscribers.
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Sources of Competitive Information
• Independent customer goods and service
review forums
• Distributor or sales agent feedback sites
• Combination sites offering customer reviews
and expert opinions
• Customer complaint sites
• Public blogs
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Needs and Trends
• Fads—short-lived and without social,
economic, and political significance.
• Trends—direction or sequence of
events that has some momentum and
durability.
• Megatrends—large social, economic,
political, and technological changes
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Trends Shaping the
Business Landscape
•
•
•
•
•
Profound shifts in centers of
economic activity (Asia
(excluding Japan)—13% of
World GDP; Western Europe >
30%)
Increases in public-sector
activity (aging of population
new levels of efficiency and
creativity from public sector)
Change in consumer
landscape (billion new
consumers to enter global
marketplace in next decade and
U.S. Latinos 2015 spending
power equivalent to 60% of
Chinese consumers.
Technological connectivity
(change way people live)
Scarcity of well-trained talent
(33 mm university-educated
young professionals in
developing countries is more
than double the number in
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developed ones
•
•
•
•
•
Increase in demand for
natural resources (Oil demand
projected to grow by 50% in
next two decades and water
shortages may constraint
growth in many countries)
Emergence of new global
industry structures (barbelllike structure—few large,
narrow middle, lot of smaller
companies)
Ubiquitous access to
information (open source
approach)
Management shifts from art
to science (algorithmic
decision-making techniques
and sophisticated software)
Increase in scrutiny of big
business practices (be able to
argue and demonstrate
intellectual, social, and
economic case for business)
Environmental Forces
•
•
•
•
•
•
Demographic
Economic
Socio-cultural
Natural
Technological
Political-legal
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What is Demographic environment?
• The demographic environment includes the
study of human populations in terms of:
• size,
• density,
• location,
• age,
• sex,
• race,
• occupation,
• other statistical information.
Population and Demographics
• Population growth
• Population age mix
• Ethnic markets
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• Educational groups
• Household patterns
• Geographical shifts
World Population Growth
• World population shows explosive
growth, in 2000 it was 6.1 billon and it
is projected to exceed 7.9 billon by
2025
• Explosive population growth has major
implication for business.
• For Example--GOLDMAN SCAHS
report has projected that India in next
30 year might grow up to 3rd largest
economy in world
Population Age Mix
• In population age mix marketers are
increasingly recognizing the potential of
youth segment (marketers are focused
on youth )
• For example--Titan the well-known watch
marketer
• Introduced a range of Sunglasses which
is call “Eye Gear” under the brand Fast
Track
Literacy Of Population
• Literacy of Population is mainly
divided into:
• A) Literate
• B) illiterate
• C)Educated
• D)Uneducated
Household Patterns
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ECONOMIC ENVIRONMENT
• Market requires purchasing power as
well as people.
• Purchasing power depends upon
current income, prices, debt, credit,
saving etc.
• Marketers must pay careful attention to
trends affecting purchasing power.
INDIAN SOFTWARE GIANTS
WARY OF ECONOMIC
SLOWDOWN
20 JAN 2008 (Economic times)
INCOME DISTRIBUTION
• Macroeconomic indicators provides
overall health of economy as well as
direction of economic growth.
• Marketers needs to understand the
distribution of income to make more
meaningful conclusions.
Types of Industrial Structures
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Industrial
economies
Industrializing
economies
Raw-materialexporting
economies
Subsistence
economies
India – An Industrializing
Economy
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Saudi Arabia –
A Raw-Material Exporting Economy
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SOCIAL –CULTURAL
ENVIRONMENT
• Purchasing power is directed
towards certain goods &services.
• People absorb, unconsciously a
worldview that defines relationship
to organization, to themselves, to
society, to nature, and to universe.
Microsoft steps up on search
R&D IN EUROPE
This is because maximum usage
is in European countries.
Social-Cultural Environment
• Views of themselves (pleasure seeker, selfrealization, etc.)
• Views of others (concern about homeless, crime,
victims, social surrogates—television, home video
games, etc.)
• Views of organizations (company downsizing and
corporate accounting scandals, etc.)
• Views of society (defend society—preservers; run
it—makers; can get from—takers; change it—
changers; looking for something deeper—seekers;
leave it--escapers
• Views of nature (nature’s fragility and finiteness)
• Views of the universe (religious, etc.)
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Most Popular
American Leisure Activities
• Reading
• TV Watching
• Spending time with
family
• Going to movies
• Fishing
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•
•
•
•
•
•
Computer activities
Gardening
Renting movies
Walking
Exercise
Listening to music
Natural Environment
Shortage of
raw materials
Increased
energy costs
Anti-pollution
pressures
Governmental
protections
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NATURAL ENVIRONMENT
• Deterioration of natural environment is
major concern.
• Cities like Mumbai, Bangalore etc.
reached dangerous levels.
• Some regulation hit industries very
hard--Steel industry
Microsoft’s environmental
contribution
• Microsoft announces a new green wireless
mouse.
• This is environment friendly because it
uses six month long battery.
Keys to Avoiding
Green Marketing Myopia
• Consumer Value Positioning (design
environmental products to perform as well as
alternatives; products that have health
benefits; fixed price for renewable energy
products)
• Calibration of Consumer Knowledge
(connect environmental products attributes
with desired consumer value—pesticide-free;
solar powered); use of internet.
• Credibility of Product Claims
(environmental product and consumer
benefit claims)
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TECHNOLOGICAL
ENVIRONMENT
• Technology has released such
wonders like open heart
surgery
• It has also released hazards
like hydrogen bomb, nuclear
bomb etc.
Technological Environment
Pace of change
Unlimited Opportunities
for innovation
Varying R&D
budgets
Increased regulation
of change
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POLITICAL- LEGAL
ENVIRONMENT
• Marketing decisions are strongly
affected by development in political
and legal environment.
• Increase in business legislation
• Protecting the welfare of consumers
Political-Legal Environment
Increase in
business legislation
(e.g., unfair competition,
protect society)
Growth of special
interest groups
(e.g., consumerist movement)
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Unit Pricing on Store Shelves
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Study Question 1
________ consists of people, equipment, and
procedures to gather, sort, analyze, evaluate, and
distribute needed, timely, and accurate information to
Marketing decision makers.
A.
B.
C.
D.
E.
A marketing information system
A marketing research system
A marketing intelligence system
A promotional campaign
A marketing database
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Study Question 2
All of the following would be considered to be steps to
improve the quality of marketing intelligence in a
company EXCEPT ________.
A. training and motivating the sales force to spot and
report new developments
B. using guerrilla tactics such as going through a
competitor’s trash
C. motivating intermediaries to pass along important
information
D. networking externally
E. purchasing information from outside suppliers
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Study Question 3
A ________ is “unpredictable, short-lived, and without
social, economic, and political significance.”
A.
B.
C.
D.
E.
fad
fashion
trend
megatrend
style
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Study Question 4
________ have been described as “large social,
economic, political and technological changes [that] are
slow to form, and once in place, they influence us for
some time—between seven and ten years, or longer.
A.
B.
C.
D.
E.
Fads
Fashions
Trends
Megatrends
Styles
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Study Question 5
In which of the following economies would we expect to
find the fewest opportunities for marketers?
A.
B.
C.
D.
E.
Industrializing economies
Land-locked economies
Raw-material-exporting economies
Industrial economies
Subsistence economies
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