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The changing marketingenvironment andinformation managementSession 3

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Session QuestionsWhat are the components of a modernmarketing information system?What are useful internal records?What is involved in a marketing intelligencesystem?

What are the key methods for tracking andidentifying opportunities in the macroenvironment?What are some important macro environmentdevelopments?

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Information Needs ProbesWhat decisions do you regularly make?What information do you need to make thesedecisions?What information do you regularly get?What special studies do you periodically

request?What information would you want that youare not getting now?What are the four most helpful improvementsthat could be made in the present marketinginformation system?

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Marketing Information System

Consists of people, equipment, and procedures to gather,sort, analyze, evaluate, and distribute needed, timely,and accurate information to marketing decisionmakers.

1.Assessing information needs: a good MIS systembalances information that we would like to haveagainst that which is really needed and feasible toobtain.

2. Developing information: four main sources/types.

1.Internal Records Information2.Marketing Intelligence3.Marketing Research4.Information Analysis

3. Distributing information to decision makers.

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kotler+f04-01The Marketing Information System

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Assessing Information NeedsPizza Hut wants to launch a new pizza but needsfeedback from the customers.Treasure Island wants to evaluate its market position.Burger King develops two TV commercials andwonder which one would be more effective.

You are going to start your own business in aparticular city and you have to make concept andlocation decisions.

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Developing Information

Main Sources and Types

1. Internal records information

2. Marketing intelligence

3. Marketing research

Information analysis

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Internal databaseData warehousesGuest history information

Internal Records

Information gathered from sources within the company toevaluate marketing performance and to identifymarketing problems and opportunities

Internal database (Financial and nonfinancial datafrom a specific company)Data warehouses (Customer data in the corporateoffice Ex. Unilever) data miningGuest history information (information gathered

from guest records)


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Guest information trendsGuest information managementCorporate

customer and marketing intermediaryinformationInternal Records

Guest information trends (booking patterns,cancellations, occupancy patterns)Guest information management (e.g., guestcomment cards, listening to and speaking withguests, mystery shoppers, P.O.S. informationCorporate customer and marketing intermediaryinformation (e.g., customer and prospective customerdatabases)


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Internal sources of marketing intelligenceExternal sources of marketing intelligenceSources of competitive information

Commercial sources of marketing informationMarketing Intelligence

Everyday information from internal and external sources aboutdevelopments in the marketing environment that helps managers toprepare and adjust marketing plans and short-run tactics.

Internal sources of marketing intelligence

- Gathered by company executives, and other employees

External sources of marketing intelligence

- Macromarket information, competitive, new innovation and trends

Sources of competitive information

- Annual reports, trade magazines, press releases, andadvertisements

Commercial sources of marketing information

- On-line databases of information services, electronic yellow pages


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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-11Table 3.2Secondary Commercial Data Sources

wwwcircNielsen

InformationResources, Inc.MRCAArbitron

Simmons

SAMI/Burke

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-12 bez tytuu.bmpGSO (GUS) databases

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GSO (GUS) databases bez tytuu1.bmp

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Marketing Research

A process used to identify and define marketing opportunitiesand problems, to monitor and evaluate marketing actionsand performance, and to communicate research findings tomanagement.

Example: When McDonalds decided to add salads to its menu, its plannersneeded to research customers preferences for types of vegetablesand dressings.

Most common activities: market share analysis, market potentials

sales analysis, business trends, short-range forecasting, competitive

Product studies, long-range forecasting, testing of existing products.

1.Own researchers2.Outside researchers


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Interpretingand reportingthe findingsImplementing

the research

plan -- collecting

and analyzing

the data

Developing the

research plan

for collecting

information

Defining theproblem andresearchobjectivesMarketing Research ProcessSteps in the Marketing Research Process:

Objectives:ExploratoryDescriptive

Causal

Secondary data vs.primary dataSample vs.populationResearchApproachesPut the plan intoaction collect andanalyze the dataInterpret thefindings-drawconclusionsand report tomanagement

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Exploratory Research Descriptive Research Causal Research(Unaware of Problem) (Aware of Problem) (Problem Clearly Defined)Our sales are declining and What kind of people are buying Will buyers purchase more ofwe dont know why. our product? Who buys our our products in a new package?competitors product?

Would people be interested Which of two advertisingin our new product idea?What features do buyers prefer campaigns is more effective?in our product?possible situation

Defining the Problem and Research ObjectivesMarketing Research Process

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Steps to Improve Marketing Intelligence

ph0301Train sales force to scan for new developments

Motivate channel members to share intelligence

Network externallyUtilize a customer advisory panel

Utilize government data resourcesPurchase informationCollect customer feedback online

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Analysis of Business Environment

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The company environmentIncreasing global competitionFaster flows of information andcommunicationIncreasing business complexityRapidly changing customer needs and wants

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Forces in the company environment Deterministic forces Moderating forces Asymmetric forces Indeterministic forces

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The Business Environment(Johnson et al. 2008: 54)2-21

TheOrganisation

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3-22Needs and TrendsFad

Trend

MegatrendFashion

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Analysing the macroenvironment

A fad is unpredictable, short-lived and withoutsocial and, economic and political significance.A fashion a medium-term cycle with distinctivephases of development

A trend is a direction or sequence of events thathas some momentum and durability.Megatrends are large social, economic, politicaland technological changes that are slow to form,and once in place, they influence us for sometime.

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Fad-shaped PLCFigure 14.3 (a) Style, (b) fashion and (c) fad life cycles (continued)

M14NF003C

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Fashion-shaped PLC

Figure 14.3 (a) Style, (b) fashion and (c) fad life cycles (continued) M14NF003B

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Trend-shaped PLC

Figure 14.3 (a) Style, (b) fashion and (c) fad life cycles M14NF003A

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-27

Trends Shaping theBusiness LandscapeProfound shifts incenters of economic

activityIncreases in public-sector activityChange in consumerlandscapeTechnologicalconnectivityScarcity of well-trainedtalent

Increase in demand for

natural resourcesEmergence of newglobal industrystructuresUbiquitous access toinformationManagement shiftsfrom art to scienceIncrease in scrutiny ofbig business practices

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External analysis stagesExternal analysis stages

.Macro-environment these are broad trends shaping the nationaland international environment in terms of political, economic, socialand technological trends (i.e. PESTEL factors, key drivers )..Micro-environment this is the operating environment or industrysector in which the firm competes. It addresses a range of issues suchas suppliers, customers, competitive intensity, threat of new entry andof substitute products arising (i.e. the five-forces analysis)..Competitor analysis seeks to understand the rival offers from otherfirms seeking to serve the same customers and to out manoeuvre theirmanagers with our innovation and competitive moves..Market analysis seeks to evaluate the current needs of todayscustomers and the emerging needs of tomorrows customers so new

products can be anticipated. These will be different in different marketsegments.

Analysing the external environment involves breaking a complex inter-relatedreality into sets of issues to make the analysis manageable. The main sets ofissues are usually:

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The Macro-EnvironmentDifficult for the firm to influence

Changes can be far-reaching

The media: rich source of both information andspeculation

Tools for analysing the macro-environmentThe PESTEL (Variants PEST/DEEPLIST)frameworkKey driversScenarios

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The PESTEL FrameworkThe PESTEL framework categorises environmentalinfluences into six main types:Political -EconomicSocio-cultural

TechnologicalEnvironmentalLegal

PESTEL analysis evaluates the broad societaltrends that affect many industries. It identifiescurrent and future developments that will shape the

micro-environments of each industry sector.

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-31Environmental Forces - PESTED

DemographicEconomic

Political-LegalSocio-Cultural TechnologicalEnvironmental

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-32

Political-Legal EnvironmentIncrease in

business legislation

Growth of specialinterest groups

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The political-legal environment

LawsGovernmentAgenciesPressure

GroupsThe increase in business legislationThe growth of special interest groups

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-34Population and Demographics

Population growthPopulation age mixEthnic markets

Educational groupsHousehold patternsGeographical shifts

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Social-Cultural Environment busy shopping streetViews of themselvesViews of othersViews of natureViews of organizations

Views of societyViews of the universe

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Most PopularAmerican Leisure ActivitiesReadingTV watchingSpending time withfamily

Going to moviesFishing

Computer activitiesGardeningRenting moviesWalkingExerciseListening to music

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Household patternssizedivorce

marriagetraditional

dependentssingleseparatedwidowmultiplegenerationsmarrying

later

marrying withno children

non-traditionalhouseholdsmetrosexualThe socio-cultural anddemographic environment

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Geographical shifts in populationThe socio-cultural anddemographic environment M05NF001Components of EU (25) population changeSource: Eurostat (2006) EU Integration Seen Through Statistics. Key Facts of 18Policy Areas, 2006 Edition, Luxembourg: Office for Official Publications of the

EuropeanCommunities, p. 40. Copyright 2006 European Communities. Reproduced with permission

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The economic environment

IncomePrices SavingsDebt andcredit

availability

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Income distributionSubsistenceeconomiesRaw materialexportingeconomies

Industrialising

economies

IndustrialeconomiesIndustrial structure

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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall 3-41Natural EnvironmentShortage ofraw materialsIncreasedenergy costs

Anti-pollutionpressuresGovernmental

protections

550

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Consumer Environmental SegmentsTrue Blue Greens (30%)Greenback Greens (10%)Sprouts (26%)Apathetics (18%)Grousers (15%)

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GreenwashingIt is the responsibility of both individuals andcorporations to be environmentally friendly

Greenwashing describes a situation in whicha company deliberately mislead itscustomers about the companysenvironmental practices

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Technological EnvironmentPace of changeOpportunitiesfor innovationVarying R&Dbudgets

Increased regulationof change

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The technological environmentSource: Consumer Electronics Associations Eighth Annual Household & Teen CE Ownership Study as reported in Special Report: Digital Media, Advertising Age, 5 June, 2006,S-2. Copyright Crain Communications. Reproduced with permission M05NT001

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Good PESTEL AnalysisFocuses on society wide.Based on sound research of actual issues.Provides evidence from the research tovalidate points made.Future oriented.

Interpretive and not descriptive

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Major RiskLike the old-fashioned SWOT technique, PESTELhelps us make listsLists can help us think, butA list should be the beginning, not the end of thinkingHarrison (2003: Ch 2) integrates this with industry and

company analysisJohnson et al. (2008:55-59) look at the way PESTELfactors combinethen at key drivers and trends of business change

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Key Drivers and Scenarios PlanningKey drivers for change are environmentalfactors that are likely to have a high impacton the success or failure of strategy.

Scenarios are detailed and plausible viewsof how the business environment of anorganisation might develop in the futurebased on key drivers for change about whichthere is a high level of uncertainty.

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Industries and Sectors AnalysisAn industry is a group of firms producing thesame principal product or service.

The industry analysis involves identifyingCompetitive forcesIndustry life cyclesCompetitive cycles

Porters five forces framework has two main

aims:To understand the drivers of competitive behaviour inthe sector and;To evaluate the long-run profit potential of the sector

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ThePortersFive Forces FrameworkThe Porters Five Forces Framework

Competitive

rivalryPotentialentrantsBuyersSubstitutesSuppliers

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5Five forces model Details

Power ofSuppliersPower of

CustomersSubstituteThreats ofPotential entrantsCompetitive rivalry Capital requirements Differentiation Switching costs Access tosupply/distributionchannels Intellectual propertyExpected retaliation Legislation/Government

action Economies of scale

Degree of differentiation Technological innovation Price performance relationships

Size of purchases Undifferentiated product Per cent of cost Low margins (buyer) Threat of forwardintegration Impact on quality Price performance ishigh

Size of purchases Differentiation in product Few substitutes A few big suppliers Threat of backward integration

Competitor balance Industry growth rate High fixed costs High exit barriers Low differentiation

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mm 2011 session 3

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