intelligence and marketing research-for collecting information about marketing
environment. They also normally spend more time in the customer and competitor
environment. By conducting systematic environmental scanning, marketers can
revise and adapt marketing strategies to meet new challenges and opportunities
in the marketplace.
- Microenvironment: The forces close to the company that affects its ability
to serve its customers-the company, suppliers, marketing channel firm, customer
market, competitors, and publics.
- Microenvironment: The larger societal forces that affect the whole
microenvironment ?demographic, economic, natural, technological, political,
and cultural forces.
Suppliers
- They provide the resources needed by the company to produce its goods and
services. Marketing managers must be aware of supply availability ?supply
shortage or delays, labour strikes, and other events that can cost sales in the
short run and damage customer satisfaction in the long run.
Marketing Intermediaries
- Marketing Intermediaries: Firms that help the company to promote, sell, and
distribute its goods to final buyers, they include resellers, physical
distribution firms, marketing services agencies, and financial intermediaries.
- Reseller ? are distribution channel forms that help the company find
customers or make sales to them.
- Physical Distribution Firms? help the company to stock and move goods from
their points or origin to their destination. Working with warehouse and
transportation firms, a company must determine the best way to store and ship
goods, balancing such factors as cost, delivery, speed and safety.
- Marketing Services agencies? are marketing research firms, advertising
agencies, media firms, and marketing consulting firms that help the company
target and promote its products to the right market.
- Financial Intermediaries ? include banks, credit companies, insurance
companies, and other businesses that help finance transactions or insure against
the risks associated with the buying and selling of goods.
Customer
- The company needs to study its customer market closely.
- 5 Types of customer market:
1. Consumer Market: consist of individuals and households that buy goods and
services for personal consumption.
2. Business Market: buy goods and services for further processing or for use
in their production process
3. Reseller Market: buys goods and services and resells it to make a profit.
4. Government Market: are composed of government agencies that buy goods and
services in order to produce public services or transfer the goods and services
to others who need them.
5. International Market: Consists of buyers in other countries, including
consumers, producers, resellers and governments.
Competitors
Publics
- Publics: Any group that has an actual or potential interest in or impact on
an organization?s ability to achieve its objectivities.
- Seven types of publics (see page 79 & 80):
1. Financial publics
2. Media publics
3. Government publics
4. Citizen-action publics
5. Local publics
6. General publics
7. Internal publics
The Company?s Microenvironment
Demographic Environment
- Demography: The study of human population in terms of size, density,
location, age, sex, race, occupation, and other statistics.
Changing Age Structure of the Canadian Population
- Baby Boom: The major increase in the annual birth rate following WWII and
lasting until the early 1960s. The ?baby boomers,? now moving into middle
age, are a prime target for marketer.
The Changing family (87)
Geographic Shifts in population (87)
A better educated and more white-collar population (89)
Increasing Diversity (89)
Economics Environment
- Economic Environment: Factors that affect consumer buying power and
spending patterns.
- Subsistence economies- they consume most of their own agricultural and
industrial output.
- Industrial economies ? which constitute rich markets for many different
kinds of goods.
Chang in Income
- Marketers pay attention to income distribution as well as average income.
Changing Consumer Spending Patterns
- Engel?s Law: Difference noted over a century ago by Earnst Engel in how
people shift their spending across food, housing, transportation, health care,
and other goods and services categories as family income rises.
Natural Environment
- Natural Environment: Natural resources that are needed as inputs by
marketers or that are affected by marketing activities.
Technological Environment
- Technological Environment: Forces that create new technological, creating
new product and market opportunities.
Political Environment
- Political Environment: Consists of laws, government agencies, and pressure
groups that influence and limit various organizations and individuals in a given
society.
Legislation Regulation Business
- Canada has many laws covering issues such as competition, fair trade
practices, environment protection, product safety, truth in advertising
packaging and labelling, price, and other important areas.
- North American Free Trade agreement (NAFTA) replaced the Free Trade
Agreement (FTA) in August 1992. It governs free trade among Canada, United
States, and Mexico. NAFTA is a historic document since it is the first trade
agreement between two developed nation and a developing country.
- Business legislation has been enacted for various reasons. The first is to
protect companies from each other. The second purpose of the government
regulation is to protect consumers from unfair business practices. The third
purpose of the government regulation is to protect the interests of society
against unrestrained business behaviour.
Cultural Environment
- Cultural Environment: Institutions and other forces that affect society?s
basic value, perception, preference, and behaviour.
- The following cultural characteristics can affect marketing
decision-making:
Persistence of cultural Values
- Core beliefs and values? are passed by parents to children and are
reinforced by schools, churches, business and government.
- Secondary Beliefs and value ? are more open to change. Believing in
marriage is a core belief; believing that people should get married early in
life is a secondary belief.
Shifts in Secondary Cultural Values
- The major cultural values of a society are expressed in people?s views of
themselves and others, as well as in their views of organizations, society,
nature and the universe.
People?s Views of themselves
- People use products, brands, and services as a means of self-expression,
and they buy products and service that match their views of themselves.
People?s View of others
- This suggests a bright future for the products and services that serve
basic needs rather that those relaying on glitz and hype. It also suggests a
greater demand for ?social support? products and services that improve
direct communication between people, such as health clubs and family vacations.
People?s View of Organizations
- They need to review their advertising communications to ensure that their
messages are honest. They also need to review their various activities to make
sure that they are perceived to be ?good corporate citizens?.
People?s View of society
- Patriots ? nationalist, pro country
- Reformers ? who want to change it
- Malcontent ? who want to leave it
People?s View of Nature
People?s View of the universe
- People vary in their beliefs about the origin of the universe and their
place in it.
- 1980?s people measured success in terms of career achievements, wealth,
and worldly possessions.
- 1990?s success was measured with achievements such as a happy family life
and service to one?s community replacing money as the measure if worth.
Responding to the Marketing environment
- Many companies view the marketing environment as an ?uncontrollable?
element to which they must adapt. They accept the market place and do not change
it. They analyse the environmental forces and design strategies that will help
the company avoids the threats and take advantage of the opportunities the
environment.
- Environmental management perspective: A management perspective in which the
firm takes aggressive actions to affect the publics and forces in its marketing
environment rather than simply watching and reacting to it.
Chapter 4- Marketing Research and Information System
The Marketing Information System
- Marketing Information System (MIS): People, equipment, and procedure to
gather, sort, analyse, evaluate, and distribute needed, timely, and accurate
information to marketing decision-makers.
- First, it interact with these managers to assess information needs. Next,
it develops needed information from internal company records, marketing
intelligence activities, and marketing research. Information analysis processes
the information to make it more useful. Finally the MIS distributes information
to managers in the right form at the right time to help them make better
marketing decision.
Assessing Information Needs
- Managers do not always need all the information they ask for, they may not
ask for all they really need. The MIS cannot always supply all the information
managers request.
Developing Information
Internal Data
- Internal database: Information gathered from sources within the company
that can be evaluate marketing performance and to detect marketing problems and
opportunities.
- Information in the database can come from many sources. The accounting
department prepares financial statements and keeps detailed records of sales,
costs, and cash flow. Manufacturing reports on production schedules, shipments,
and inventories. The sales force reports on reseller reactions and competitor
activities. The marketing department maintains a database of customer
demographics, psychographics, and buying behaviour. The customer service
department provides information on customer satisfaction or service problems.
Marketing Intelligence
- Marketing Intelligence: The systematic collection and analysis of publicity
available information about competitors and development in the marketing
department.
- Marketing Intelligence can be gathered from many source; can be collected
from the company?s own personnel-executives, engineer and scientists,
purchasing agents, and the sales force.
- For a fee companies can subscribe to online database or information search
services.
Marketing Research
- Marketing Research: The systematic design, collection, analysis, and
reporting of data and finding relevant to a specific marketing situation facing
an organization.
Information Analysis
- Information gathered by the company?s marketing intelligence and
marketing research systems often require more analysis, and sometimes managers
may need help applying the information to their marketing problems and
decisions. This may include advanced statistical analysis to learn more about
both the relationships within a set of data and their statistical reliability.
Distribution Information
- The information gathered through marketing intelligence and marketing
research must be distributed to the right marketing managers at the right time.
- With recent advances in computers, software, and telecommunication, most
companies are decentralizing their marketing information systems. In many
companies, marketing managers have direct access to the information network
through personal computers and other means.
- Such systems offer exciting prospects. They allow the managers to get the
information they need directly and quickly and to tailor it to their unique
needs.
The Marketing Research Process
*Defining the problems and research objectives ? Developing the research
plan and collecting information ? Implementing the research plan-collecting and
analysing the data ? Interpretation and reporting the findings
- Marketing managers and researcher must work closely to define the problem
carefully and they must agree on the research objectives.
- Managers must know enough about marketing research to help in planning and
interpreting research results. If they know little about marketing research they
may obtain wrong information.
- Experience marketing researchers who understand the manager?s problem
also should be involved at this stage. The researcher must be able to help the
manager define the problem and suggest ways that research can help the manager
make better decisions.
- Defining the problem and research objectives is often the hardest step in
the research process.
- After the problem has been defined carefully, the manager and researcher
must set research objectives. Can 1-3 types of objectives. Exploratory research,
descriptive research and casual research.
- Exploratory Research: Marketing research to gather preliminary information
that will help to better define problems and suggest hypotheses.
- Descriptive Research: Marketing research to better describe marketing
problems, situations, or markets, such as the market potential for a product or
the demographics and attitudes of customers.
- Casual Research: Marketing research to test hypothesis about cause-and
effect relationship.
Developing the research plan
- Determining the information needed, developing a plan for gathering it
efficiently, and presenting the plan to marketing management.
Gathering Secondary Information
- To meet the manager?s information needs, the researcher can gather
secondary data, primary data, or both.
- Secondary data: Information that already exists somewhere, having been
collected for another purpose before.
- Primary data: Information collected for the specific purpose at hand.
- Researchers usually start be gathering secondary data.
- Commercial data source ? companies can buy reports from outside suppliers.
- Table 4-2 (page 125) Sources of Secondary data
- Online database and Internet data sources ? Marketing research can conduct
their own search of secondary data sources. A resent survey of marketing
researchers found that 81 percent uses such online services for conducting
research.
- Online database: A compilation of marketing information that can be
accessed online.
Advantages and Disadvantages of Secondary Data
- Secondary data can usually be obtained more quickly and at a lower cost
than primary data.
- A study to collect primary information might take weeks or months to
complete and cost thousands of dollars. Secondary sources sometimes provide data
that an individual company cannot collect on its own-information that either is
not directly available or would be too expensive to collect.
- Secondary data can also present problems. The needed information may not
exist-researcher can rarely obtain all the data they need for secondary sources.
- The researcher must evaluate secondary information carefully to ensure that
it is relevant (fits research project needs), accurate (reliably collected and
reported), current (up-to-date enough for current decisions), and impartial
(objectively collected and reported)
Planning Primary Data Collection
- Primary data to assure that it will be relevant, accurate, current, and
unbiased.
Research Approaches
- Observational research: The gathering of primary data by observing relevant
people, actions, and situation.
- Observational research can be used to obtain information that people
unwilling or unable to provide. Some things can not be observed such as
feelings, attitudes, and motives, or private behaviour.
- Table 4-3 Planning Primary Data Collections (127)
- Checkout scanners in retail stores record consumer purchases in detail.
Consumer products companies and retailers use scanner information to assess and
improve product sales and store performances.
- Single Source data systems: Electronic monitoring systems that link
consumers? exposure to television advertising and promotion (measured using
television meters) with what they buy in stores (measured using store checkout
scanners)
- Survey Research: The gathering of primary data by asking people questions
about their knowledge attitudes, preference, and buying behaviour.