MARKETING MANAGEMENT
Understanding Market
Demand and the
Environment
3-1
Chapter Questions
• What is important to know?
• What data can be employed?
• How can demand be forecasted and
measured?
• What are some important macroenvironmental forces?
3-2
Background on Industry
• What are the trends in the industry?
– Sales amounts
– Growth rate
– Profit margins
– Industry trends
– Types of products
2-3
Background on Industry
BASED ON THAT INFORMATION
• THEN…
– Is this an area we should enter?
– Where are the opportunities?
– What should we be doing to stand out?
• (What is our competitive advantage?)
– Is that position profitable or sustainable?
2-4
The Marketing Research Process
Define the problem
Develop research plan
Collect information
Analyze information
Make
decision
Present findings
4-5
Research Flowchart
Understanding
of problem
Poor
EXPLORATORY or
SECONDARY
RESEARCH
No
OBSERVATIONAL
RESEARCH
No
FOCUS GROUPS
Good
Objective
answers by
asking?
Yes
Need estimates
of prevalence?
Yes
SURVEY
Environmental Forces
Demographic
Economic
Social-Cultural
Technological
Natural
Political-Legal
3-7
Estimating Future Demand
• Survey of Buyers’ Intentions
• Composite of Sales Force Opinions
• Expert Opinion
• Past-Sales Analysis
• Market-Test Method
4-8
Market Demand Functions
4-9
Market Demand Functions
4-10
Age versus Cohort effects
1. Age differences –
chronological
2. Cohort effects –
when you were born
3-11
Age versus Cohort effects
• “Population pyramid 1956-2006”
• “Population pyramid projection,1956-2006”
3-12
Use Data in Marketing Plan
What can these data sources tell you?
•Demand estimates
•Trends
MARKETING PLAN:
•What can we learn about demand for the
product or service?
•Explain it!
3-13
GROUP DISCUSSION: Toy business
1. What have been the key success factors for Toyland?
2. Where is Toyland vulnerable?
3. What should they watch out for?
4. What recommendation would you make to the owner
going forward?
5. What should they be sure to do with their marketing?
1-14
GROUP DISCUSSION: Sirius/XM
1. What have been the key factors for satellite radio?
2. What should they watch out for?
3. What should they be sure to do with their
marketing?
1-15