PART- TWO

CAPTURING MARKETING INSIGHTS

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The Importance of Information

Marketing
Environment

Customer
Needs

Why
Information
Is
Needed

Competition

Strategic
Planning

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What is Marketing
Information System (MkIS)?
Every firm must organize and distribute a continuous
flow of information to its marketing managers.
A
marketing
information
system
(MKIS)
consists of People, equipment, and procedures to
gather, sort, analyze, evaluate and distribute
needed, timely, and accurate information to
marketing decision makers.
It relies on internal company records, marketing
intelligence activities, and marketing research
Function: Assess, Develop and Distribute Information.

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Contd...
The
companys
marketing
information system should be a
mixture of what managers think they
need, what they really need, and
what is economically feasible.

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Marketing
Marketing Environment
Environment
Marketing Decisions and Communications

Marketing
Research

Marketing
Intelligence

Internal
Data

Information
Analysis
Developing Information

Assessing Information
Needs

Distributing
Information

Marketing Information System

Marketing Managers

The Marketing Information

System

Functions of a MkIS:
Assessing Information
Needs
Conduct Interviews and Determine
What Information is
Desired, Needed, and Feasible to Obtain.

Monitors
Monitors Environment
Environment for
for
Information
Information Managers
Managers
Should
Should Have
Have
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Examine
Examine Cost/
Cost/ Benefit
Benefit of
of
Desired
Desired
Information
Information

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Functions of MkIS: Developing Information

Obtains
ObtainsNeeded
NeededInformation
Informationfor
forMarketing
MarketingManagers
Managers
From
Fromthe
theFollowing
Following Sources
Sources

A.
A. Internal
InternalData
Data

Collection
Collectionof
ofInformation
Informationfrom
fromData
DataSources
SourcesWithin
Withinthe
theCompany
Company
From:
From:Accounting,
Accounting,Sales
SalesForce,
Force,Marketing,
Marketing,Manufacturing,
Manufacturing,Sales
Sales
B.
B.Marketing
MarketingIntelligence
Intelligence

Collection
Collectionand
andAnalysis
Analysisof
ofPublicly
PubliclyAvailable
AvailableInformation
Informationabout
about
Competitors
Competitorsand
andthe
theMarketing
MarketingEnvironment
Environment
From:
From:Employees,
Employees,Suppliers,
Suppliers,Customers,
Customers,
Competitors,
Competitors,Marketing
MarketingResearch
ResearchCompanies
Companies
C.
C.Marketing
MarketingResearch
Research

Design,
Design,Collection,
Collection,Analysis,
Analysis,and
andReporting
Reportingof
ofData
Dataabout
aboutaa Situation
Situation
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Functions of MkIS: Distributing

Information
Information Must be Distributed
to the Right Managers at the Right Time.

Distributes
Distributes Routine
Routine
Information
Information for
for
Decision
Decision Making
Making
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Distributes
Distributes Nonroutine
Nonroutine
Information
Information for
for Special
Special
Situations
Situations

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A. Internal Records:
To spot important opportunities and
potential
problems,
marketing
managers rely on internal reports of
orders, sales, prices, costs, inventory
levels, receivables, and payables.

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B. Marketing Intelligence
A marketing intelligence system is a set of
procedures and sources that managers use to
obtain everyday information about developments
in the marketing environment. The internal records
system supplies results data, but the marketing
intelligence system supplies happenings data.
Marketing managers collect marketing intelligence
in a variety of different ways, such as by reading
books, newspapers, and trade publications; talking
to
customers,
suppliers,
and
distributors;
monitoring social media on the Internet; and
meeting with other company managers.
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Contd...
A company can take eight possible actions to improve the
quantity and quality of its marketing intelligence.
1. Train and motivate the sales force to spot and report
new developments. The company must sell its sales
force on their importance as intelligence gatherers.
2. Motivate
distributors,
retailers,
and
other
intermediaries to pass along important intelligence.
Marketing intermediaries are often closer to the customer
and competition and can offer helpful insights.
3. Hire external experts to collect intelligence. Many
companies hire specialists to gather marketing
intelligence. Service providers and retailers send mystery
shoppers to their stores to assess cleanliness of facilities,
product quality, and the way employees treat customers.

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11

Contd...
4. Network internally and externally. The firm can
purchase competitors products, attend open houses and
trade shows, read competitors published reports, attend
stockholders meetings, talk to employees, collect competitors
ads, consult with suppliers, and look up news stories about
competitors.
5. Set up a customer advisory panel. Members of
advisory panels might include the companys largest,
most outspoken, most sophisticated, or most representative
customers.
6. Take advantage of government-related data resources.
7. Purchase information from outside research firms and
vendors.
8. Collecting marketing intelligence through the Internet.

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12

C. What is Market Research?

When we do not have answers
through own Market Information
and Intelligence System
It is the systematic gathering,
recording and analyzing of data
about problems related to the
marketing of goods and services.

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What to find out?

What does the customer need?

Who is the target audience?
What is the competition?
Are there any gaps in the market?
Would the product be acceptable in
the market?

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The Marketing Research

Marketing research

Is a process
Use data available from different
sources
Is conducted to aid decision making
Findings should be communicated to the
appropriate decision maker

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16

Interpreting
Interpreting and
and Reporting
Reporting the
the Findings
Findings
Implementing
Implementing the
the Research
Research Plan
Plan
Developing
Developing the
the Research
Research Plan
Plan
Defining
Defining the
the Problem
Problem and
and the
the Research
Research Objectives
Objectives

The Marketing Research Process

Marketing Research Process

Step 1. Defining the Problem & Research
Objectives
Gathers preliminary information
Exploratory
Research

Gathers preliminary information

that
thatwill
willhelp
helpdefine
definethe
theproblem
problem
and
andsuggest
suggesthypotheses.
hypotheses.
it
it is
is conducted
conducted into
into an
an issue
issue
or
or problem
problem where
where there
there are
are few
few
or
or no
no earlier
earlier studies
studies to
to refer
refer to
to

Descriptive
Research

Describes
Describesthings
thingsas
asconsumers
consumers
attitudes
attitudesand
anddemographics
demographics
or
ormarket
marketpotential
potentialfor
foraaproduct.
product.
Descriptive
Descriptiveresearch
researchdescribes
describes
Phenomena
as
they
Phenomena as theyexist.
exist.
Data
is
often
quantitative
and
Data is often quantitative andstatistics
statistic
applied
applied

Causal
Research
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Test
Testhypotheses
hypothesesabout
aboutcausecauseand-effect
and-effectrelationships.
relationships.
/relationship
/relationship between
betweenadvertizing
advertizing
and
profit
/
andB.(PhD)
profit /
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17

Marketing Research Process

Step 2. Develop the Research Plan
Determine
Determine the
the Specific
Specific Information
Information Needed
Needed
Secondary

Primary
Information
Informationcollected
collected
for
the
specific
for the specificpurpose
purpose
at
hand.
at hand.

Information
Informationthat
thathas
has
been
previously
been previously
collected.
collected.

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Both
BothMust
MustBe:
Be:
Relevant
Relevant
Accurate
Accurate
Current
Current
Impartial
Impartial

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Primary Data Collection Process

Step 1. Research Approaches
Observational
ObservationalResearch
Research
Gathering
Gatheringdata
databy
byobserving
observingpeople,
people,
actions
and
situations
actions and situations
(Exploratory)
(Exploratory)

Survey
SurveyResearch
Research

Asking
Askingindividuals
individualsabout
about
attitudes,
preferences
attitudes, preferencesor
or
buying
buyingbehaviors
behaviors
(Descriptive)
(Descriptive)
Experimental
ExperimentalResearch
Research

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Using
Usinggroups
groupsof
ofpeople
peopleto
to
determine
cause-and-effect
determine cause-and-effect
relationships
relationships
(Causal)
(Causal)

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Primary Data Collection Process

Step 2. Contact Methods
Contact Methods

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Primary Data Collection

Process

Step 3. Developing a Sampling

Plan
Who
Whois
isto
tobe
be
surveyed?
surveyed?

Probability
Probabilityor
or
Non-probability
Non-probability
sampling?
sampling?
Sample representative
segment of the
population
How
Howshould
shouldthe
the
sample
samplebe
be
chosen?
chosen?

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How
Howmany
many
should
shouldbe
be
surveyed?
surveyed?
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Primary Data Collection

Process

Step 4. Research Instruments

Research
Research Instruments
Instruments
Questionnaire
Questionnaire
What
What to
to ask?
ask?
Form
Form of
of each
each
question?
question?
Wording?
Wording?
Ordering?
Ordering?

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Mechanical
Mechanical Devices
Devices
People Meters
People Meters

Grocery
Grocery Scanners
Scanners
measuring
measuring devices
devices
Balances,
Balances,

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Analyzing
Analyzing
the
the
Data
Data

Research
Research
Plan
Plan

Processing
Processing
of
of
Data
Data
Collection
Collection
of
of
Data
Data

Marketing Research Process

Step 3. Implementing the Research
Plan

Data sources

Reference Library
Directories of Products/Companies
The commodity exchange
Industry/Trade Journals
Trade fairs and Exhibitions
Company Annual Reports
Internet

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Report
Report to
to Management
Management
Draw
Draw Conclusions
Conclusions
Interpret
Interpret the
the Findings
Findings
Marketing Research Process
Step 4. Interpreting and Reporting
Findings

The Marketing
Environment

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Introduction
The forces that directly or indirectly
influence an organizations capability
to undertake its business.
The trading forces operating in a
market place over which a business
has no direct control, but which
shape the manner in which the
business functions and is able to
satisfy its customers.
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Components of marketing environment

The external environment consists of
Macro environment that are broad forces which shape
the character of opportunities and threats
Micro environment consist of the actors in the
immediate environment

Internal environment consist of forces and actors

in side the firm that affect the marketing
operation; composed of internal stakeholders and
the other functional areas with the business
organization.

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Marketing Environment

Political/legal

S
o
c
i
a
l

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supplier
c
o
m
p
e
t
i
t
o
r

Company (HR,
Production, Marketing,
Finance

Intermediary

Economic

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c
u
s
t
o
m
e
r

t
e
c
h
n
o
l
o
g
i
c
a
l
29

Marketing system and

the environment
Company

Suppliers

Intermediaries

Consumers

Competitors

MACRO ENVIRONMENTAL
FORCES
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The Integrating Function

Production

HRM

Marketing

Finance

R&D
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Controllability
The organization has no control over the macro
environment, it can only respond to changes
taking place
The organization has some degree of influence
over the microenvironment but by no means
complete control.
The organization controls its own internal
environment although this does not mean the
marketing department or marketing manager has
control

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Why is it important?
It is essential for planning
It helps a business to compete more
effectively against its rivals
Assists in the identification of
opportunities and threats
Enables an organization to take
advantage of emerging strategic
opportunities
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The internal or organizational

environment
This refers to the other internal functions that
impinge on the marketing functions
It comprises of

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The human resources dept.

The operations dept.
The accounting and finance dept.
The research and development dept.
The information systems dept.
Others functional and support units in the organization

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Continued
Marketing is affected by
Allocation of responsibilities within the
organization
Resource availability
The extent to which major functional
areas work together supporting the
marketing function to be customer
oriented
The attitude of internal stakeholder
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The Micro environment

Refers to the environment most closely linked to
the organization
It comprises all those organizations and
individuals who directly affect the activities of the
company
All factors which impact directly on a firm and its
activities in relation to a particular market
The actors in the immediate environment that
affect the firms capability to operate effectively
in its chosen market

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Elements in the micro environment

Customers
Suppliers
Intermediaries
Competitors
Local community
Local government
Cooperators (partner firms in
alliance)

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The Macro-environment
Comprises general forces and trends
rather than specific organizations-the
big issues that affect all businesses
active in the market
The macro-environment refers to the
general environmental factors that
influence the organization
Factors outside the area of marketing
which impact on but which cannot be
influenced by the marketing effort
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Elements
Macro-economic environment
Political and Legal environment
Socio-cultural and demographic
environment
Technological environment

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Political/legal

Environmental protection laws

Taxation policy
Employment laws
Government policy (the extent to
which the government is business
friendly)

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Economic Factors

Inflation
Employment
Disposable income
Energy availability and cost
Level of economic development

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Socio-cultural factors
Demographics (population size and
growth)
The culture, beliefs and values of the
community
Lifestyle changes
Consumerism
Levels of education

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Technological

New discoveries and innovations

Speed of technology transfer
Rates of obsolescence
Internet (Information technology)
(to have better understanding of
impact of environmental factors
please read the article Constraints and

limitations to the application of Bio-fuel Production:

Argentina as a major fuel supplier in the near
future?)
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Analysis approaches to the

Marketing Environment

SWOT analysis
PEST/STEP analysis
Five forces analysis

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SWOT analysis

Strengths (internal)
Weaknesses (internal)
Opportunities (external)
Threats (external)

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Internal
Environment

External
Environment

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PEST analysis

Political factors
Economic factors
Socio-cultural factors
Technological factors

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SWOT and PEST

48

Positive

Negative

Internal factorsthe internal

environment

Strengthorganizational
strengths

Weaknessesorganizational
weaknesses

External factorsthe PEST

Opportunities resulting
from changes in the
political, economic,
social and
technological
environment

Threats from
political,
economic, social
and technological
environment

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Competitive Analysis
The competitive environment (industry
environment) comprises those factors with which
the organization comes into closest contact,
factors that have a rather obvious and immediate
impact on its success.
The competitive environment is usually
subdivided in to five forces (M. E. Porter, 1980):

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Direct competitive rivals

Buyers
Suppliers
Substitutes
New entry competition

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Porters five forces

Helps firms to analyze the strength of competitive
forces.
The forces are:
Direct competitive rivalry (Intensity of existing
competition)
The threat from new entry competition
The threat of substitute products
The power of buyers
The power of suppliers

Profitability and the achievement of objectives

will be affected by the combination of five forces.

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Five forces analysis

Potential
entrants
Threat of
entrants

Suppliers
Bargaining
power

COMPETITIVE
RIVALRY

Buyers
Bargaining
power

Threat of
substitutes

Substitutes

Source: Adapted from M. E. Porter, Competitive Strategy, Free Press,

1980,
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Responding to the Marketing

Environment
Reactive: Passive Acceptance and
Adaptation
Companies design strategies that avoid
threats and capitalize upon
opportunities.

Proactive: Environmental
Management
Use of lobbyists, PR, lawsuits,
complaints, and contractual agreements
to influence environmental forces.
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