Understanding the

Marketplace
Ira Fachira PhD
Marketing Environment
Marketing Environment
• Microenvironment: actors close to the company that affect its ability
to serve its customers.
• Macroenvironment: larger societal forces that affect the
microenvironment.
• Considered to be beyond the control of the organization.
• Shape opportunities & pose threats
The Microenvironment
The Macroenvironment
The Publics
Any group that has an interest in or impact on an organization's ability
to achieve its objectives.
• Financial public
• Media public
• Government public
• Citizen-action public
• Local public
• General public
• Internal public
What macro-environment force the KFC encountered by
selling organic rice?
What macro-environment force that Ma Icih has to consider in
selling their product in USA?
What is the culture of Indonesian that Nescafe encountered
by introducing the Nescafe ice coffee?
INTERNAL
ANALYSES: MACRO (PESTEL):
Operations, Political, Economic,
Human Resource, Social, Technological,
Finance, Environmental, Legal
Marketing

Strength & MICRO (Porter):

Weakness Threat of Substitutes, Threat
Opportunity
of New Entrants, Bargaining
& Threat Power of Suppliers, Bargaining
Power of Buyers, Intensity of
Rivalry
Forces Driving Industry Competition
SUPPLIERS

Bargaining power
of suppliers
Threat of
new entrants MARKET
COMPETITORS
POTENTIAL
SUBSTITUTES
ENTRANTS
Rivalry among Threat of substitute
existing firms products or services
Bargaining power
of customers

BUYERS Source: Porter (1980)

High Threat of Entry
• More likely when • Important issues
– Economies of scale are possible – What barriers exist?
– Capital requirements of entry are – What is our position?
low
– Easy access to distribution channels
– No dominant “player”
– Little expected retaliation
– Little government/legislative
intervention
– Low levels of differentiation
Strong Buyer Power
• More likely when
– High concentration of buyers
– Large number of small suppliers
– Little risk/low cost of switching
– Alternative sources of supply
• Low differentiation
• High levels of competition
– High risk of backward integration
Strong Supplier Power
• More likely when
– High concentration of suppliers
– Cost of switching suppliers is high
– Risk of switching suppliers is high
– Supplier has powerful brand
– Supplier dominates market
– High risk of forward integration
Threat of Substitute
• Product for Product
– Post replaced by fax replaced by email
• Substitution of need
– Better quality castings reduces need for machine tools
• Generic substitution
– Holiday or a new TV?
• Do without!
 Competitive Rivalry (1)
• Rivalry between competing organisations
• Issues:
– What is it based on?
– Increasing or decreasing?
– How is it affecting us?
– What can we do about it?
 Competitive Rivalry (2)
• Balance of rivalry • High cost of extra capacity
– Lots of small, balanced • Level of differentiation
competitors?
• High exit barriers
– Market domination?
• Easy acquisition
• Market growth rates
– Product life cycle?
• Global markets?
• High fixed costs
SWOT Analysis
• A technique developed by Albert Humphrey at a research
project at Stanford University
• A framework for organizing and using data and information
gained from situational analysis of internal and external
environment
• A technique to move from everyday problems or traditional
strategy to a fresh perspective
• Further, see managementstudyguide.com
Marketing Information System
Marketing Information System
Assessing MI Needs
• Good MIS: A Balance of what the information users would
like to have against what they need and what is feasible to
offer
User’s
Needs

MIS
Offerings
MIS Components
• An internal records system
• A marketing intelligence system: A set of procedures and
sources used by managers to obtain everyday information
about pertinent developments in the marketing environment
• A marketing research system that allows for the systematic
design, collection, analysis, and reporting of data and findings
relevant to a specific marketing situation
Developing Marketing Information
Steps in the Marketing Research Process
MIS Components

1.Define the
2. Develop the 3. Collect the
problem and
research plan information
research objectives

4.Analyze the 5. Present the 6. Make the

information findings decision
Developing Marketing Information
Marketing Research
Defining the Problem and Research Objectives

Exploratory research

Descriptive research

Causal research
Developing Marketing Management problem

Information
Research objectives

Written Research Plan

Information needed
Includes These
Components
How the results will help management
decisions

Budget
Data Types

Primary Secondary Data

Data
Collection For the problem at For other problems
purpose hand
Collection process Very involved Rapid and easy
Collection cost High Relatively low
Collection time Long Short
Secondary Data Classification

Pics source: http://researchdesignmethod.com/wp-content/uploads/2013/10/screenshot_00189.png

Marketing Research
Planning Primary Data Collection

Research
approaches

Contact methods

Sampling plan

Research
instruments
 Primary Data

Quantitative Qualitative

Causal Descriptive

Experimental Observational
Survey Data
Data & Other Data
Sources: http://d34wpjv4rf3nwa.cloudfront.net/www1/wp-content/uploads/2010/03/Qual_Vs_Quant.png
 Qualitative
Research
Procedures

Direct Indirect
(Nondisguised) (Disguised)

Depth Projective
Focus Group
Interviews Techniques

Association Completion Construction Expressive

Techniques Techniques Techniques Techniques
Focus Group Discussion
• Focus group discussion/interview: An interview
conducted by a trained moderator among a small
group (6 to 10) of respondents in an unstructured
and natural manner.
• Challenges:
– Difficult to generalize from small group
– Consumers not always open & honest
– Expensive
FGD: Wrong Use

Source: http://www.relevantinsights.com/tag/focus-groups
FGD: Bad Planning

Source: http://www.relevantinsights.com/tag/focus-groups
Contact Methods
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of data Good Fair Excellent Good
collected
Control of interviewer Excellent Fair Poor Fair
effects

Control of sample Fair Excellent Good Excellent

Speed of data Poor Excellent Good Excellent

collection
Response rate Poor Poor Good Good

Cost Good Fair Poor Excellent

Sampling Plan

Sample is a segment of the population selected for marketing

research to represent the population as a whole
– Who is to be studied?
– How many people should be studied?
– How should the people be chosen?
 Sampling Plan
Probability Sample
Simple random sample Every member of the population has a known and equal chance
of selection
Stratified random sample The population is divided into mutually exclusive groups and
random samples are drawn from each group
Cluster (area) sample The population is divided into mutually exclusive groups and the
researcher draws a sample
Nonprobability Sample
Convenience sample The research selects the easiest population members
Judgment sample The researcher uses their judgment to select population
members
Quota sample The researcher finds and interviews a prescribed number of
people in each of several categories
Research Instruments

Checkout
scanners

People meters Neuro-marketing

Mechanical
devices
Implementing the Research Plan
Collecting the information

Processing the information

Analyzing the information

Interpret findings

Draw conclusions

Report to management
Analyzing and Using Marketing Information

Customer Relationship Management Touchpoints

Customer Sales force Service and

Web site visits
purchases contacts support calls

Credit and
Satisfaction Research
payment
surveys studies
interactions
Depth Interviews

• An unstructured, direct, personal interview in which a single

respondent is probed by a highly skilled interviewer to
uncover underlying motivations, beliefs, attitudes, and
feelings on a topic.
Depth Interview: Laddering

Source: http://www.emeraldinsight.com/content_images/fig/0701041003004.png
Qualitative Data Analysis

Pic Source: http://www.rasch.org/rmt/rmt91a.htm

 Qualitative Data
Analysis

Pic Source:
http://www.esourceresearch.org/Portals/0/Uploads/Images/Weitzm
an/Figure_1.gif
Good Marketing Research

1. Scientific method
2. Research creativity
3. Multiple method
4. Interdependence of models and data
5. Value and cost of information
6. Healthy skepticism
7. Ethical marketing
Links

• http://www.marketingdonut.co.uk/marketing/market-researc
h/what-is-qualitative-research-
• http://www.marketingdonut.co.uk/marketing/market-researc
h/qualitative-or-quantitative-which-method-is-for-you-
• http://smallbusiness.chron.com/analysis-interpretation-qualit
ative-data-consumer-research-5060.html