Chapter 5

Understanding Understanding Markets, Market Markets, Market Demand, and the Demand, and the

Marketing Marketing EnvironmentEnvironment

PowerPoint by Yu Hongyan Business School of Jilin University

What Types of Decisions Do Marketers Make?

Example: Restaurant to be located in the Qianjin Square (location decision) Here are some marketing decisions we

need to make Target options- JLU; shopper OR Tourists Menu – Breakfast; Lunch; Dinner; AND/OR L

ate Night Sit down OR fast food (or takeout/delivery) Prices – Super Cheap, Cheap, Average, High,

OR Super High How to advertise?

Objectives Marketing Information System Demand measurement and forecasting Microenvironmental Trends and Forces

Marketing Information System

It is defined as . . . “people, equipment, and procedures

that gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.”

Marketing Marketing ManagersManagers

Analysis

Planning

Implement-ing

Controlling

Marketing Marketing ManagersManagers

Analysis

Planning

Implement-ing

Controlling

AssessingAssessinginformationinformation

needsneeds

AssessingAssessinginformationinformation

needsneeds

DistributingDistributinginformationinformation

DistributingDistributinginformationinformation

InternalInternalreportsreports

InternalInternalreportsreports

MarketingMarketingdecisiondecisionsupportsupportanalysisanalysis

MarketingMarketingdecisiondecisionsupportsupportanalysisanalysis

MarketingMarketingintelligenceintelligence

MarketingMarketingintelligenceintelligence

MarketingMarketingresearchresearch

MarketingMarketingresearchresearch

Marketing Marketing EnvironmentEnvironment

Targetmarkets

Marketingchannels

Competitors

Publics

Macro-environment

forces

Marketing Marketing EnvironmentEnvironment

Targetmarkets

Marketingchannels

Competitors

Publics

Macro-environment

forces

Marketing Decisions and CommunicationsMarketing Decisions and Communications

Developing InformationDeveloping Information

Marketing Information System

Marketing Information System (cont’d) Internal Records Systems

Order-to-payment cycle is key Timely sales reports help to better manage i

nventory Customer, product, salesperson and other d

atabases can be mined for fresh insights VMI （ vendor-managed inventory)

Marketing Information System (cont’d) Marketing intelligence system

A set of procedures and sources used by Manager??????

Not result data but happenings data Collect information by:

Reading books,newspaper, trade publications; Talking to customers, supplies, and distributors; Checking Internet sources, Meeting with other company managers

Marketing Information System (cont’d)

Establishing a marketing information center

Motivating channel members to share info

Collectingcompetitive intelligence

Buying info from commercial data sources

Developing a customer advisory panel

Improving Improving the quality of the quality of

marketing marketing intelligenceintelligence

Training and motivating the sales force

Marketing Information System (cont’d) Marketing Research

As the systematic design,collection, analysis, and reporting of data and findings that are relevant to a specific marketing situation facing the company

Marketing Information System (cont’d)

Marketing Research is the process of designing, gathering, analyzing and reporting of information that may be used to solve a specific marketing problem.

Burns and Bush, 2000

Marketing Information System (cont’d)

Marketing Research The Structure of The MR Industry

Internal Suppliers Have their own formal departments at least a single individual responsible for

marketing research Have their own formal marketing research

department

Marketing Information System (cont’d)

Marketing Research External Suppliers

Syndicated Services research firm: Infoscan Custom marketing research firms Specially-line marketing research firms

Field Services Market Segment Specialists Data Entry Services Sample Design & Distribution Services Data Analysis Services Specialized Research Technique Services

The Marketing Research Process

Marketing Information System (cont’d)

Marketing Information System (cont’d)

Marketing Research A case of marketing research Taxi mobile

Invitation Marketing proposal Qualitative research:focus group Quantitives research:mall intercept interview Data edit in Spss or excel Written Report and oral report

Marketing Information System (cont’d) Marketing research

Step 1 Define the problem and research objective

Problem:??? Objective:

Brand awareness Usage of mobile New concept of tax driver mobile

The kinds of Marketing research Exploratory research Descriptive research Causal research

Marketing Information System (cont’d)

Marketing research Step 2 Develop the research plan

Decisions on Data Sources Research Approaches Research Instruments Sampling Plan Contact Methods

17

Data Sources Primary data Secondary data, look at the book For taxi case, which is primary

data and which is secondary data?

Research Approaches

BehavioralBehavioral

Focus-groupFocus-group

SurveySurvey

ExperimentalExperimental

ObservationalObservational

Research Instruments

Laddering techniques Laddering techniques involve the creation, reviewi

ng and modification of hierarchical knowledge, often in the form of ladders (i.e. tree diagrams).

Sampling Plan Sampling unit: Sample size: Sampling procedure

Probability sampling Unprobability sampling

Contact Methods In home interview Mall intercept interview Traditional telephone interview Computer assisted telephone interview CATI Mail survey Drop off survey On-line interview

Marketing Information System (cont’d)

Marketing Research Step 3 Collect information Field work Step 4 Analyze the information Tabulate the

data Statistical technique

Frequency Chart Mean, mode, and correlation, regression

Step 5 present the findings Presentation

Marketing Information System (cont’d)

Marketing Decision Support System (MDSS) It is defined as . . .

“A coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets information from businesses and the environment and turns it into a basis for marketing action.”

2. Forecasting and Demand Measurement

Market Measurement Demand Measurement Estimating Current Demand Estimating Future Demand

2. Forecasting and Demand Measurement (cont’d)

Essential Aspects

The market Market demand Company demand

and sales forecasts Current demand Future demand

Market Potential market Available market Target market

(served market) Qualified available

market Penetrated market

Please give EX.

2. Forecasting and Demand Measurement (cont’d)

What will you do when not satisfied Try to attract more buyers from its

target market Lower the qualification of potential

buyers Expand its available market by adding

distribution or lowering price Try to expand the potential market by

advertising to prospect

2. Forecasting and Demand Measurement (cont’d)

Figure 5-2: Market Demand Functions

Demand Measurement

2. Forecasting and Demand Measurement (cont’d)

Essential Aspects

The market Measuring demand Company demand

and sales forecasts Current demand Future demand

Market demand Market minimum Market forecast Market potential

Market forecast Market potential

2. Forecasting and Demand Measurement (cont’d)

Essential Aspects

The market Measuring demand Company demand

and sales forecasts Current demand Future demand

Company demand Company sales

forecast Sales quota Sales budget Company sales

potential

2. Forecasting and Demand Measurement (cont’d)

Essential Aspects

The market Measuring demand Company demand

and sales forecasts Current demand Future demand

Total market potential

Area market potential Market-buildup

method

2. Forecasting and Demand Measurement (cont’d)

Essential Aspects

The market Measuring demand Company demand

and sales forecasts Current demand Future demand

Many Forecasting Methods: Buyer intentions

survey Composite of sales

force opinions Expert opinion Past-sales analysis Market-test method

3. Macroenvironmental Trends And Forces

Demographic Environment

Worldwide Populations GrowthWorldwide Populations Growth

Geographic Population ShiftsGeographic Population Shifts

Rise of MicromarketsRise of Micromarkets

Household PatternsHousehold Patterns

Educational GroupsEducational Groups

Population Age MixPopulation Age Mix

Ethnic MarketsEthnic Markets

3. Macroenvironmental Trends And Forces (cont’d)

Income DistributionIncome Distribution

Savings, debt, Savings, debt, and credit availabilityand credit availability

Economic Environment

3. Macroenvironmental Trends And Forces (cont’d)

Changing role of Changing role of governmentsgovernments

Shortage of raw materialsShortage of raw materials

Anti-pollution pressuresAnti-pollution pressures

Increased energy costsIncreased energy costs

Natural Environment

3. Macroenvironmental Trends And Forces (cont’d)

Accelerating pace of technological change

Increased regulation of technological change

Unlimited opportunities for

innovation

Varying R&D budgets

TechnologicalTechnologicalEnvironmentEnvironment

3. Macroenvironmental Trends And Forces (cont’d)

Legislation Legislation regulating businessregulating business

Growth of Growth of special interest groupsspecial interest groups

Political-Legal Environment

3. Macroenvironmental Trends And Forces (cont’d)

World views held World views held by consumersby consumers

High persistence of High persistence of core valuescore values

Existence of subculturesExistence of subcultures

Socio-Cultural Environment

Thank you very much!