Consumer Behaviors

Gathering Information and Scanning the EnvironmentConducting marketing research and forecasting demand

What is a Marketing Information System (MIS)?A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Components of the Marketing-Information SystemsMarketing-Information SystemMarketingIntelligenceMarketingScienceMarketingResearchMarketing-InternalDataAccountingRecords

Sales Costs Inventories Cash flows Accounts receivable and payableObservation

Sales Force Dealers and distributors Suppliers Executive awareness

Outside Data

Census Trade association data Trade press Syndicated awarenessAnalyticalSystems

Statistical analysis Model building

Quantitative

Survey research Telephone Mail Personal observation ExperimentQualitative

Projective tests Focus groups

Marketing MISSupports managerial activities in product development, distribution, pricing decisions, and promotional effectiveness

Inputs to Marketing MISStrategic plan and corporate policiesThe Transaction Processing SystemsExternal sources: The competitionThe market

Marketing MIS Subsystems and OutputsMarketing researchProduct developmentPromotion and advertisingProduct pricing

Internal Records & Marketing Intelligence

Marketing Managers rely on internal reports of orders ,sales ,prices, cost etc

By analyzing this information they can spot important opportunities and problems

The order Payment CycleHeart of Internal Record System

Internal Records and Marketing IntelligenceOrder-to-payment cyclesend orders, prepares invoices, transmit copies to various departments, and back-orders out-of-stock itemsSales information systemtimely and accurate reports on current salesDatabases, warehousing, data mining--customer, product, and salesperson and combine data from the different databases.Marketing intelligence systema set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.

NowNow (days) improved order payment cycle is required Customers favor firms that can promise timely delivery.Order-Pay can also be done online. This process is called as EDI-Electronic Data Interface.E.G., Cisco, Dell, Ebay

Data MiningIt is the process of analyzing data from different perspectives and summarizing it into useful information - information that can be used to increase revenue, cuts costs, or both.

It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified.

Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.

Marketing Intelligence SystemIt is a process of acquiring and analyzing information in order to: understand the market; determine the current and future needs and preferences, attitudes and behavior of the market; assess changes in the business environment that may affect the size and nature of the market in the future. A set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment

Steps to Improve Marketing IntelligenceTrain sales force to scan for new developments (make intelligence gathering important to salespeople)

Motivate channel members to share intelligence (hire specialists to gather marketing intelligencemystery shoppers)

Network externally (purchase competitors products; attend open houses and trade shows; read competitors published reports; etc.)

Utilize a customer advisory panel (representative customers or companys largest customers)

Utilize government data sources (Pakistan Census data, etc.)Collect customer feedback online (online customer review boards, discussion forums, chat rooms, and blogs)Purchase information (A.C. Nielsen Company and other information sources)

Secondary Commercial Data SourcesNielsentracks sales of consumer package goods and brands, gathered at the point of sale in retail stores of all types (e.g., supermarkets through scanner data, television audiences).

MRCA (Medium Resolution Coverage Area)data on weekly family purchases of consumer products, and home food consumption.

Information Resourcessupermarket scanner data and data on the impact of supermarket promotions.

SAMI/Burkereports on warehouse withdrawals to food store in selected market areas and supermarket scan data.

Simmonsannual reports covering television markets, television markets, sporting goods, and proprietary drugs with demographic data by sex, income, age, and brand preferences.

Arbitronselling data to subscribers.

Sources of Competitive InformationIndependent customer goods and service review forums

Distributor or sales agent feedback sites

Combination sites offering customer reviews and expert opinions

Customer complaint sites

Public blogs

Needs and TrendsFadsshort-lived and without social, economic, and political significance.

Trendsdirection or sequence of events that has some momentum and durability.

Megatrendslarge social, economic, political, and technological changes

Trends Shaping the Business LandscapeProfound shifts in centers of economic activity (Asia (excluding Japan)13% of World GDP; Western Europe > 30%)Increases in public-sector activity (aging of population new levels of efficiency and creativity from public sector)Change in consumer landscape (billion new consumers to enter global marketplace in next decade and U.S. Latinos 2015 spending power equivalent to 60% of Chinese consumers.Technological connectivity (change way people live)Scarcity of well-trained talent university-educated young professionals in developing countries is more than double the number in developed onesIncrease in demand for natural resources (Oil demand projected to grow by 50% in next two decades and water shortages may constraint growth in many countries)Emergence of new global industry structures (barbell-like structurefew large, narrow middle, lot of smaller companies)Access to information (open source approach)Management shifts from art to science (algorithmic decision-making techniques and sophisticated software)Increase in scrutiny of big business practices (be able to argue and demonstrate intellectual, social, and economic case for business)

Environmental ForcesDemographicEconomicSocio-culturalNaturalTechnologicalPolitical-legal

What is Demographic environment?The demographic environment includes the study of human populations in terms of: size,density, location, age,sex, race,occupation,other statistical information.

Population and DemographicsPopulation growthPopulation age mixEthnic marketsEducational groupsHousehold patternsGeographical shifts

World Population Growth

World population shows explosive growth, in 2000 it was 6.1 billon and it is projected to exceed 7.9 billon by 2025Explosive population growth has major implication for business.For Example--GOLDMAN SCAHS report has projected that India in next 30 year might grow up to 3rd largest economy in world

Population Age MixIn population age mix marketers are increasingly recognizing the potential of youth segment (marketers are focused on youth )For example--Titan the well-known watch marketer

Introduced a range of Sunglasses which is call Eye Gear under the brand Fast Track

Literacy Of Population

Literacy of Population is mainly divided into: A) LiterateB) illiterateC)EducatedD)Uneducated

3-*Household Patterns

ECONOMIC ENVIRONMENTMarket requires purchasing power as well as people.Purchasing power depends upon current income, prices, debt, credit, saving etc.Marketers must pay careful attention to trends affecting purchasing power.

INDIAN SOFTWARE GIANTS WARY OF ECONOMIC SLOWDOWN 20 JAN 2008 (Economic times)

INCOME DISTRIBUTIONMacroeconomic indicators provides overall health of economy as well as direction of economic growth.Marketers needs to understand the distribution of income to make more meaningful conclusions.

Types of Industrial StructuresIndustrialeconomiesSubsistenceeconomiesRaw-material-exportingeconomiesIndustrializingeconomies

India An Industrializing Economy

Saudi Arabia A Raw-Material Exporting Economy

SOCIAL CULTURAL ENVIRONMENTPurchasing power is directed towards certain goods &services.

People absorb, unconsciously a worldview that defines relationship to organization, to themselves, to society, to nature, and to universe.

Microsoft steps up on search R&D IN EUROPEThis is because maximum usage is in European countries.

Social-Cultural EnvironmentViews of themselves (pleasure seeker, self-realization, etc.)Views of others (concern about homeless, crime, victims, social surrogatestelevision, home video games, etc.)Views of organizations (company downsizing and corporate accounting scandals, etc.)Views of society (defend societypreservers; run itmakers; can get fromtakers; change itchangers; looking for something deeperseekers; leave it--escapersViews of nature (natures fragility and finiteness)Views of the universe (religious, etc.)

Most Popular Pakistani and American Leisure ActivitiesReadingTV WatchingSpending time with familyGoing to moviesFishingComputer activitiesGardeningRenting moviesWalkingExerciseListening to music

Natural EnvironmentShortage of raw materialsIncreasedenergy costsAnti-pollutionpressuresGovernmentalprotections

NATURAL ENVIRONMENTDeterioration of natural environment is major concern.Cities like Mumbai, Bangalore etc. reached dangerous levels.Some regulation hit industries very hard--Steel industry

Microsofts environmental contributionMicrosoft announces a new green wireless mouse.This is environment friendly because it uses six month long battery.

TECHNOLOGICAL ENVIRONMENTTechnology has released such wonders like open heart surgeryIt has also released hazards like hydrogen bomb, nuclear bomb etc.

Technological EnvironmentPace of changeUnlimited Opportunitiesfor innovationVarying R&D budgetsIncreased regulationof change

POLITICAL- LEGAL ENVIRONMENTMarketing decisions are strongly affected by development in political and legal environment. Increase in business legislationProtecting the welfare of consumers

Political-Legal EnvironmentIncrease in business legislation(e.g., unfair competition, protect society) Growth of specialinterest groups (e.g., consumerist movement)

Unit Pricing on Store Shelves

Study Question 1________ consists of people, equipment, andprocedures to gather, sort, analyze, evaluate, anddistribute needed, timely, and accurate information toMarketing decision makers.

A. A marketing information system B. A marketing research system C. A marketing intelligence system D. A promotional campaign E. A marketing database

Study Question 2All of the following would be considered to be steps toimprove the quality of marketing intelligence in acompany EXCEPT ________.

A. training and motivating the sales force to spot and report new developments B. using guerrilla tactics such as going through a competitors trash C. motivating intermediaries to pass along important information D. networking externally E. purchasing information from outside suppliers

Study Question 3A ________ is unpredictable, short-lived, and withoutsocial, economic, and political significance.

A. fad B. fashion C. trend D. megatrend E. style

Study Question 4________ have been described as large social,economic, political and technological changes [that] areslow to form, and once in place, they influence us forsome timebetween seven and ten years, or longer.

A. Fads B. Fashions C. Trends D. Megatrends E. Styles

Study Question 5In which of the following economies would we expect tofind the fewest opportunities for marketers?

A. Industrializing economies B. Land-locked economies C. Raw-material-exporting economies D. Industrial economies E. Subsistence economies

Marketing DiscussionWhat brands do you feel successfullyspeak to you? Effectively target yourage group? Why? Which ones do not?

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