MM Module2

7/30/2019 MM Module2

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The Marketing Environment


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Includes: Microenvironment: actors close to the

company that affect its ability to serve itscustomers.

Macroenvironment: larger societal forces thataffect the microenvironment.

Considered to be beyond the control of theorganization.

Marketing Environment


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Actors in the Microenvironment


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Suppliers: Provide resources

needed to producegoods and services.

Important link in thevalue deliverysystem.

Most marketers treatsuppliers like partners.

The Companys Microenvironment


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The Companys Microenvironment

Marketing Intermediaries: Help the company to promote, sell, and distribute

its goods to final buyers Resellers Physical distribution firms

Marketing services agencies Financial intermediaries


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5 Types of Customers

Consumer markets Business markets (B to B)

Reseller markets Government markets International markets


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Competitors

Must understand competitors strengths Must differentiate firms products and

offerings from those of competitors Competitive strategies should emphasize

firms distinctive competitive advantage in

marketplace


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The Macro environment

The company and all of the other actorsoperate in a larger macro environment of

forces that shape opportunities and posethreats to the company.


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The Companys Macroenvironment


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Economic Environment

Consists of factors that affect consumerpurchasing power and spending patterns.


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Natural Environment

Involves the natural resourcesthat are needed as inputs bymarketers or that are affectedby marketing activities.

Green marketing initiatives,environmental friendlyproducts, pollution controlmeasures, biodegradability ofproducts like soaps


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Technological Environment

Mostdramaticforce nowshaping our

destiny.


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Cultural Environment

The institutionsand other forces

that affect asocietys basicvalues,

perceptions,preference, andbehaviors.


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Political Environment

Includes Laws,GovernmentAgencies, and

Pressure Groupsthat Influence orLimit VariousOrganizations andIndividuals In aGiven Society.

Increasing Legislation

Changing GovernmentAgency Enforcement

Increased Emphasis on Ethics& Socially Responsible Actions


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Marketing Information SystemMarketers must be trend trackers

and opportunity seekers.


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MIS consists of people, eqipment,andprocedures to gather, sort, analyze, evaluateand distribute needed,timely,and accurate

information to marketing decision makers. MIS developed from internal company records,

marketing intelligence activities and marketingresearch.

It should be a cross between what managersthink they need, what managers really need andwhat is economically feasible.


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Speed , accuracy and efficiency ofthe order to payment cycle.

Customers fax or e-mail their orders.

Computerized warehouses fill orders. Billing Dept. sends out invoices as quickly

as possible


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Database

Customer database Product database

Salesperson database Combination of data from all database


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E.g. Customer database will contain-customers name, address past

transaction, demographics andpsychographics (activities, interests,

opinions)


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Data Warehousing and Data Mining

Warehouse data and make them easilyaccessible to decision makers.

Analysts mine the data and garner freshinsights into neglected customersegments, recent customer trends and

other useful information.


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Data Mining

Data mining is the process of discoveringactionable information from large sets of

data. Data mining uses mathematicalanalysis to derive patterns and trends thatexist in data.

These patterns and trends can becollected and defined as a data miningmodel.


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Data Mining

Mining models can be applied to specificbusiness scenarios, such as:

Forecasting sales

Targeting mailings toward specific

customers

Determining which products are likely to

be sold together


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Finding sequences in the order thatcustomers add products to a shopping cart


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This process can be defined by using thefollowing six basic steps:

Defining Problem

Preparing Data Exploring Data Building Models Exploring and validating models Deploying and updating models


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Marketing Intelligence System

A set of procedures and sourcesmanagers use to obtain everyday

information about developments in themarketing environment.


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Steps to improve the quality of its marketingintelligence

A company can train and motivate thesales force to spot and report new

development.A company can motivate distributors,

retailers and other intermediaries to pass

along important intelligence .


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A company can network externally bypurchasing competitors product, attend trade

show etc. Company can set up a customer advisory panel. A company can take advantage of government

data resources.

A company can purchase information fromoutside suppliers like market research firms.

A company can use online customer feedback

system to collect competitive intelligence.


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Market Research&

Sales Forecasting


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Market Research System

Market research is research into a specificmarket.


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Marketing Research System

Systematic design ,collection, analysis andreporting of data and findings relevant to

a specific marketing situation .


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The Marketing Research Process

Step 1: Define the problem and theresearch objective.

Step 2: Develop research plan Step 3:Collect the information Step 4: Analyze the information

Step 5: Present the findings Step 6: Make a decision


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What to find out?

What does the customer need? Who is the target audience and how much

can you find out about them? What is the competition?Are there any gaps in the market?

Would the product be acceptable in themarket?


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Do I need Market Research?

Yes. Provided I know what I want.


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The MR Process

What is the Marketing Problem? What is the Research Problem?

Developing the Research Plan Research Approach Research Instruments

Collecting the Information Analysing the information Presentation of findings


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Data sources

Reference Library Directories of Products/Companies

Industry/Trade Journals Trade fairs and Exhibitions Company Annual Reports Internet


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Forecasting and DemandMeasurement


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Sales Forecasting - Why is itnecessary?

To raise the necessary cash for investmentand operations

to establish capacity and output levels to acquire and stock the right amount of

supplies

to hire the required number of people


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The Measures of MarketDemand

Demand can be measured for

i. Six different product levels,

ii. Five different space levels,iii. Three different time levelsCompanies can prepare as many as 90

different types of demand estimates


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Space level

Product

level

All sales

Industry sales

Company sales

Product line sales

Product formsales

Product item sales

Short run Medium

run

Long

run


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Forecast depend upon type ofmarket

Market

A set of all actual and potential buyers ofa product or service


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Potential Market

A set of consumers who profess asufficient level of interest in a product or

service


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Available Market

A set of consumers who have interest ,income and access to a particular product

or service


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Qualified Available Market

A set of consumers who have interest,income, access and qualifications for the

particular product or service.


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Target Market

Part of the qualified available market thecompany decides to pursue


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Penetrated Market

A set of consumers who are buying thecompanys product or service


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The major concepts in DemandMeasurement are

1. Market Demand2. Company Demand


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Market Demand

Total volume that would be bought by adefined-----

customer group geographical area

time period marketing environment marketing program


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Market Potential

An upper limit of market demand as aresult of marketing expenditure in a given

marketing environment. E.g. In the period of recession and in the

period of prosperity.


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Market Forecast

Market demand corresponding to theindustry marketing expenditure

This would be lower than the marketpotential


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Company Demand

Estimated share of market demand atalternative levels of company marketing

effort in a given time period


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Company Sales Forecast

Expected level of company sales based ona chosen marketing plan and an assumed

marketing environment.


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Total Market Potential

TMP =Potential No. of buyers *Average quantitypurchased by buyer *price

It is a maximum amount of sales that might be available toall the firms in an industry during a given period, undera given level if industry marketing effort andenvironmental conditions.


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Area Market Potential

Market potential of different districts,towns,cities,states and nations.


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Sales forecasting Methods

Survey of buyers intention Composite of sales force opinions

Expert opinion Past sales analysis Market test method

Documents

MM Module2