MG 220 Marketing Management Part-II (Kotler)

PART 2

:

CAPTURIN

G

MARKETING IN

SIGHTS

C O M P O N E N T S O F A M O D E R N M I SI N T E R N A L R E C O R D S

M A R K E T I N G I N T E L L I G E N C EA N A LY Z I N G T H E M A C R O E N V I R O N M E N T

F O R E C A S T I N G & D E M A N D M E A S U R E M E N T

COMPONENTS OF A MODERN MIS (MARKETING INFORMATION SYSTEM)

Everyone needs to observe the environment but MARKETERS have two advantages:Disciplined methods for collecting informationMore time for interacting with customers & observe

competition

Marketers understand and have extensive information on consumption patterns

Companies with superior information enjoy a competitive advantage

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COMPONENTS OF A MODERN MIS (MARKETING INFORMATION SYSTEM)

Marketing Information System consists of:People, Equipment and Procedures to Gather, Sort, Analyze and Distribute needed, timely and accurate information

to marketing decision-makers

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COMPONENTS OF A MODERN MIS (MARKETING INFORMATION SYSTEM)

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Marketing Information System

is developed from:Company’s internal records

(CHAP 3)

Marketing Intelligenc

e Activities(CHAP 3)

Marketing Research(CHAP 4)

What managers think they

need

What managers really need

What is economically

feasible

MIS should be a cross

between:

INTERNAL RECORDS

Order-to-payment cycle• Review of sales process & its complete transaction flow• Doing it accurately and timely is the key

Sales Information Systems• Timely & accurate reports on current sales• Need to correctly interpret sales data (red or yellow Mustang?)

Database, Data Warehousing and Data Mining• Databases of Customer & product, salespersons’ databases• Use them to interact correctly with customers

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MARKETING INTELLIGENCE

Marketing Intelligence SystemA set of procedures and sources managers use to obtain everyday information about developments in marketing environment

Developed through:1. Train and motivate salesforce to gather & report information2. Motivate channel distributors, retailers etc. to pass information3. Network externally (purchase competitors’ prod, attend events etc. )4. Customer advisory panels (interact with selected customers)5. Government data resources (census reports etc.)6. Purchase information from research houses etc.7. Online customer feedback for competitive intelligence8. IMP: Collecting Marketing Intelligence on internet

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ANALYZING THE MACROENVIRONMENT

Successful companies recognize and respond profitably to unmet needs and trends

Fad – an “unpredictable”, short-lived and without social, economic, political significance. (a new style of clothing)

Trend – a direction of sequence of events that has some momentum and more predictable and durable than fads. (eating out trends in Pakistan)

Megatrends – large social, economic, political and technological changes that are slow to form and [once in place], they influence us for sometime. (access to cellular services all over Pakistan)

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ANALYZING THE MACROENVIRONMENT

Maj

or

forc

es

1. Demographic2. Economic

3. Social-cultural4. Natural

5. Technological6. Political-legal

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ANALYZING THE MACROENVIRONMENT

1. DemographicMain demographic is populationTrends related to:• Population growth• Population Age mix• Ethnicity• Educational• Household patterns

o Family structureso collective lifestyles

• Geographical shifts in population

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ANALYZING THE MACROENVIRONMENT

2. EconomicMarkets require purchasing power [and people!]

Few important trends• Income distribution – a key development indicator• Savings, Debt & credit availability• Outsourcing & Free trade

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ANALYZING THE MACROENVIRONMENT

3. Social-Cultural EnvironmentSociety’s impact on individuals and groupsSome interesting ‘views’• How people view themselves• How people view others• How people view companies, organizations• How people view their society and values• How people view nature• How people view life, universe, religion

Core beliefs and secondary beliefsSub-culturesShift of cultural values through time

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ANALYZING THE MACROENVIRONMENT

4. NaturalDegradation of natural environment – serious issue

Important O&Ts• Shortage of Raw materials

o Infiniteo finite renewableo finite non-renewable

• Increased energy costs• Anti-pollution pressures• Changing role of governments

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ANALYZING THE MACROENVIRONMENT

5. TechnologicalChanging the way we live and that too rapidly!

Innovation and new concepts

Cutting-edge research

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ANALYZING THE MACROENVIRONMENT

6. Political-Legal EnvironmentBusinesses are being regulated and more controlled

SIGs• How companies can tackle with lobbying Special

Interest Groups

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FORECASTING AND DEMAND MEASUREMENT

One of the major objectives of Marketing research

Marketing’s tasks to identify opportunities and also give measured

forecasts

(selected topics are included under this heading)

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FORECASTING AND DEMAND MEASUREMENTTHE MEASURES OF MARKET DEMAND

The 90 types of Demand

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FORECASTING AND DEMAND MEASUREMENTTHE MEASURES OF MARKET DEMAND

Different ways of looking at “market”Potential Market: Set of consumers who profess a sufficient level of interest in a market offer (able to buy?)

Available Market: Set of consumers who have interest, income and access to a particular offer. (Qualified Available Market => Eligible or allowed)

Target Market: Part of Qualified Available market, the company decides to pursue (most attractive segment)

Penetrated Market: Set of consumers who are buying the company’s products M G 2 2 0 M A R K E T I N G M A N A G E M E N T | PA RT 2 17

FORECASTING AND DEMAND MEASUREMENTVOCABULARY FOR DEMAND MEASUREMENT

Market Demand:For a product is 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

Marketing Demand is NOT a number But a function (correlation) of stated conditions

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FORECASTING AND DEMAND MEASUREMENTVOCABULARY FOR DEMAND MEASUREMENT

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FORECASTING AND DEMAND MEASUREMENTVOCABULARY FOR DEMAND MEASUREMENT

Market Demand:Market Minimum

Market Potential

Marketing Sensitivity of Demand (Demand’s reaction to marketing effort)• Expansible market (demand reacts highly to marketing)• Non-expansible market (demand reacts less to marketing)

Market Penetration IndexCurrent level of market demand to potential demand

Share Penetration IndexCurrent level of market to its potential market share

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FORECASTING AND DEMAND MEASUREMENTVOCABULARY FOR DEMAND MEASUREMENT

Company Sales Forecast:After understanding company demand, choose a level of

marketing effort => Company sales forecast is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

Based on this:Sales Quota is the sales goal set for a product line, company

division. Assigned to: stimulate sales efforts (SQ>SF)

Sales Budget is conservative estimate of expected volume of sales and is used for internal decisions like purchasing, cash flow etc. (SB<SF)

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MG 220 Marketing Management Part-II (Kotler)

PART 2

:

CAPTURING

MARKETIN

G INSIGHTS

M A R K E T I N G R E S E A R C H S Y S T E MM A R K E T I N G R E S E A R C H P R O C E S S

THE MARKETING RESEARCH SYSTEMCONCEPT

Marketing ResearchThe systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company

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Marketing Research firms

Syndicated-service research

firmsGather information/data and

sell it as research reports

Custom marketing

research firmsCarry-out specific projects

(Designing the study & reporting)

Specialty-line marketing

research firmsSpecialized services within

Marketing research (e.g. Online survey

execution/management, field interviews etc.)

THE MARKETING RESEARCH PROCESSSCHEMATIC

Step 1Define the problem

and research objectives

Step 2Develop the Research

plan

Step 3Collect the information

Step 4Analyze the information

Step 5Present the findings

Step 6Make the decision

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THE MARKETING RESEARCH PROCESSSTEP 1: DEFINE THE PROBLEM & RESEARCH OBJECTIVES

Marketing Management defines the problemNot too broadWhat features should be in our new mobile phone modelNot too narrowShould the internet connectivity be through 3G if we increase plan price by 45%

Balanced, well-thought and result-orientedWhat should be enhancements in camera and internet services compared to existing models

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THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

Most efficient plan for gathering information

Decisions for:Data sourcesResearch ApproachesResearch InstrumentsSampling PlanContact Methods

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THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

Secondary data – collected for another purposeReadily available | Good starting point | Low costResearch from past models | competitor analysis

Primary data – specifically for this projectFocus of Main research | critical informationNeeds to be designed completely based on given problem

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Decisions for Data Sources

THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

Observational ResearchUnobtrusive observing of customers(video/voice recorder at service desk selling mobile phones)

Focus Group ResearchGathering of consumers for discussing the problem Carefully selected and observed (selected mobile phone customers can be invited)

Survey ResearchLearning more about consumers. Mass activity(A survey among existing mobile phone customers)

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Decisions for Research Approaches

THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

Behavioral dataPurchasing behavior data or usage data or preference data(Data from datacenters showing what is usage of different functions)

Experimental ResearchA small activity emulating real product/service and getting feedback(Few prototypes given to selected consumers and their behavior/feedback is observed)

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Decisions for Research Approaches

THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

QuestionnairesA set of questions | carefully developed and pre-testedClosed-end questions: MCQs | Open-ended questions: descriptive(A questionnaire developed for users)

Qualitative measuresQualitative analysis of consumers’ behaviors and interpretation May involve psychological tests | Possible only for small group (observe consumers using phones)

Mechanical devicesDevices (galvanometers, eye cameras) to observe user’s reaction on exposed to product(view user’s experience on seeing a prototype)

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Decisions for Research Instruments

THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

Sampling Unit - Who is to be surveyedBased on product, problem etc. (High-end users, corporate clients, access to data networks)

Sample size - How many people to be surveyedAgain based on requirements, budget etc. General rule: Larger sample => better results(Total potential user base in Pakistan: 10Mn => e.g. sample: 1K)

Sampling Procedure - How respondents shall be chosenProbability & Non-probability sampling techniques(Convenience and judgment sampling for mobile phone users)

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Decisions for Sampling Plan

THE MARKETING RESEARCH PROCESSSTEP 2: DEVELOP THE RESEARCH PLAN

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Mail QuestionnaireAccess to people who cannot or do not want to be interviewedUse Simple questionnaireVery low response rate(send a questionnaire to existing user with monthly invoice)

Telephonic interviewQuick and convenient. Questions might be clarified easilyResponse rate is good | but cannot be too long or personalized(Make a call to 500 of existing users for a quick interview)

Personal interviewMost versatile and elaborate methodMost expensive and requires lot of administrative workArranged (meeting) | Intercept (in malls etc.)(Interviewing customers visiting service centers)

Online interviewEfficient and highly usedInexpensive | faster | More ‘honesty’ | Versatile using technologySmall and skewed sample | technological problems(Use online advertising or even website to request a survey)

Decisions for Contact Methods

THE MARKETING RESEARCH PROCESSSTEP 3: COLLECT THE INFORMATION

This is the execution of Step 2Most expensive and most prone to errorErrors can be:Respondents not available. Need to re-engage

(typical for high-end clients)Respondents refuse to cooperate

(typical for high-end clients)Give dishonest or biased answers

(biased because of very recent experience)Interviewers can be biased or dishonest

(just filling false information)

Still: Getting the right respondents is critical

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THE MARKETING RESEARCH PROCESSSTEP 4: ANALYZE THE INFORMATION

Data tabulationFrequency distributionsStatistical analysis

Discover!

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THE MARKETING RESEARCH PROCESSSTEP 5: PRESENT THE FINDINGS

Researchers’ findingsRelated to management’s defined problemIrrelevant information not required(Give a finding of what features are wanted by what kind of customers - users, new users, age-wise etc.)

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THE MARKETING RESEARCH PROCESSSTEP 6: MAKE THE DECISION

Management’s taskBased on what researcher has provided

(Marketing and Product Development team takes the final decision based on available results and information)

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THE MARKETING RESEARCH PROCESSOVERCOMING BARRIERS TO USE OF MARKETING RESEARCH

• Narrow conception of research• Uneven (or even low) caliber of researchers• Poor framing of the problem• Late and occasionally erroneous findings• Personality and presentational differences

Remaining topics in Chap 4 are NOT included

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