MARKETING MANAGEMENT

SESSION 9
INSTRUCTOR: SALMAN TAHIR

Fall 2018
 Chapter 3, 4, 5 and 6
From Principles of Marketing by Kotler &
Armstrong

PART 2:
UNDERSTANDING THE
MARKETPLACE AND CONSUMERS
 Marketing Environment
3

 Marketing Environment consists of the actors and

forces outside marketing that affect marketing
management’s ability to build maintain and grow
successful relationship with target customers.
 Micro Environment consists of actors close to company
that affect its ability to serve its customers e.g. suppliers,
intermediaries, customer markets, competitors and publics
 Macroenvironment consists of larger societal forces that
affect marketing such as economic, natural, technological,
political, and cultural forces.

MG 220 Marketing Management | Part 2

Marketing Environment
 Everyone needs to observe the environment but
marketers have two advantages:
 Disciplined methods for collecting information
 More time for interacting with customers & observe
competition
 Marketers understand and have extensive
information on consumption patterns
 Companies with superior information enjoy a
competitive advantage
The Company’s Microenvironment
 The Company
 Suppliers  affect availability and cost
 Marketing Intermediaries  help in promoting selling and
distributing products to final buyers
 Wholesellers and retailers
 Physical distribution firms
 Marketing service agencies
 Financila intermediaries
 Competitors
 Publics; such as Financial publics, Media publics, Govt
Publics, Citizen action publics, Local publics, General public,
Internal Publics
 Customers
 Analyzing the Macroenvironment
6

 Successful companies recognize and respond profitably to unmet needs

and trends

 Fad – an “unpredictable”, short-lived and without social, economic,

political significance.
 (a new style of clothing)

 Trend – a direction of sequence of events that has some momentum and

more predictable and durable than fads.
(eating out trends in Pakistan)

 Megatrends – large social, economic, political and technological

changes that are slow to form and [once in place], they influence us for
sometime.
(access to cellular services all over Pakistan)
MG 220 Marketing Management | Part 2
 Analyzing the Macroenvironment
7

1. Demographic
2. Economic
Major forces

3. Social-cultural
4. Natural
5. Technological
6. Political-legal
MG 220 Marketing Management | Part 2
 Analyzing the Macroenvironment
8

 1. Demographic
 Main demographic is population (size, density, location, age gender,
race and other statistics)
 Trends related to:
 Population growth (Middle class, Rural Population etc.)
 Population Age mix (e.g. young vs. aging)
 Ethnicity (e.g. India has diverse population)
 Educational (school going, college going etc.)
 Household patterns
 Family structures (joint family vs. nuclear family)
 collective lifestyles
 Changing role of women
 Geographical shifts in population

MG 220 Marketing Management | Part 2

 Analyzing the Macroenvironment
9

 2. Economic
 Markets require purchasing power [and people!]
 Industrial economies, developing economies and subsistence
economies.
 Global Financial Crises.
 Few important trends
 Income distribution – a key development indicator
(See next slide for an interesting example)
 Future aspirations and expectations
 Savings, Debt & credit availability
 Interest Rates
 Outsourcing & Free trade

MG 220 Marketing Management | Part 2

Income Distribution in India
 Analyzing the Macroenvironment
11

 3. Social-Cultural Environment
 Core Beliefs (more persistent) and Secondary Beliefs (more open to
change)
 Some interesting ‘views’
 How people view themselves (DIYs Adventurers)
 How people view others (FOMO, JOMO)
 How people view companies, organizations
 How people view their society and values
 How people view nature (Some feel ruled by it, others want to conquer it)
 How people view life, universe, religion
 Core beliefs and secondary beliefs
 Sub-cultures – e.g. teenage
 Shift of cultural values through time
MG 220 Marketing Management | Part 2
MARKETING MANAGEMENT

SESSION 10
INSTRUCTOR: SALMAN TAHIR

Fall 2018
 Analyzing the Macroenvironment
13

1. Demographic
2. Economic
Major forces

3. Social-cultural
4. Natural
5. Technological
6. Political-legal
MG 220 Marketing Management | Part 2
 Analyzing the Macroenvironment
14

 4. Natural
 Natural environment involves the natural resources that are needed as
inputs by marketers or that are affected by marketing activities.
 Trends
 Shortages of natural raw materials
 Water shortage leading to careful use of forest and food.
 Increased Pollution
 Disposal of chemical and nuclear wastes
 Rising mercury levels in the ocean
 Chemical pollutants in soil and food supply
 Increased Govt Intervention  Strong controls from Govt and Pressure
groups
 Companies are developing strategies and practices that support
environmental sustainability
 Analyzing the Macroenvironment
15

 5. Technological
 Dramatic Change - Changing the way we live and that too
rapidly!
 Innovation and new concepts e.g tiny devices tracking
product’s purchase, use and disposal.
 Cutting-edge research such as “smart ovens” cooking your
turkey perfectly due to guidance from an embedded chip.
The RFID chip!
 New Technology creates new markets and opportunities
 Promising new products Solar energy, Electric Car,
Entertainment Video Display, etc.
MG 220 Marketing Management | Part 2
 Analyzing the Macroenvironment
16

 6. Political-Legal Environment
 Laws, Govt agencies, pressure groups that influence or limit various
organizations and individuals.
 Increasing Legislation e.g. CCP in Pakistan
 To protect businesses from each other
 To protect consumers from unfair business practices
 To protect the interests of society
 Trade barriers
 Issues of ethics and social responsibility e.g. Data of Digital users.
 Cause related marketing or “Cause exploting marketing”
 SIGs
 How companies can tackle with lobbying Special Interest Groups

MG 220 Marketing Management | Part 2

Chapter 4: Managing Marketing Information to gain
Customer Insights

PART 2:
UNDERSTANDING THE
MARKETPLACE AND CONSUMERS
Marketing Information System

People and Procedures for assessing information

needs, developing needed information, helping
decision makers to use the information to generate
and validate actionable customer and market insights.
Marketing Information System
 Components of a modern MIS
(Marketing Information System)
20

 Everyone needs to observe the environment but marketers

have two advantages:
 Disciplined methods for collecting information
 More time for interacting with customers & observe competition
 Marketers understand and have extensive information on
consumption patterns
 Companies with superior information enjoy a competitive
advantage
 The real goal of doing marketing research and gathering
marketing information is to have customer insights that are
actionable for marketers.
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Assessing Marketing Information Needs

 Information that marketeers like to have

vs.
 More and more information is preferred, to
avoid any surprises
What managers
 What they really need think they need
 There are at times limitations in MIS, or
availability of the exact information e.g.
What is
competitor’s media spends. economically
What managers
really need
feasible
 What is feasible to provide.
 The cost of obtaining analyzing storing and
delivering information can mount quickly
 Is the value of insights gained from
additional information worth the cost of
providing it?
Sources of Information
 Internal Data
 Marketing Intelligence
 Marketing Research

 INTERNAL DATA
 Transactions, demographics, psychographics, buying behaviour
 Records of Customer Satisfaction
 Website visits
 Production schedules, shipments and inventories.
 Sales Force Reports on Competitor activities
Source of Information:
Marketing Intelligence

 Systemic collection and analysis of publically available information

about customers, competitors, and developments in marketplace.
Developed through:
1. Trained and motivated salesforce to gather & report information
2. Motivate channel distributors, retailers etc. to pass information
3. Customer advisory panels (interact with selected customers)
4. Government data resources (census reports, PTA report on Telecom
etc.)
5. Purchase information from research houses etc.
6. Online customer feedback for competitive intelligence
7. Social Listening
8. IMP: Collecting Marketing Intelligence on internet
(CLASS DISCUSSION)
 The Marketing Research System
Concept
24

Marketing Research
The systematic design, collection, analysis, and reporting of data and findings
relevant to a specific marketing situation facing the company

Marketing Research firms

Syndicated-service
research firms
Gather information/data and sell it
as research reports
Specialty-line
marketing research
Custom marketing firms
research firms Specialized services within
Carry-out specific projects Marketing research
(Designing the study & reporting) (e.g. Online survey
execution/management, field
interviews etc.)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Schematic
25
MARKETING MANAGEMENT

SESSION 11
INSTRUCTOR: SALMAN TAHIR

Fall 2018
 The Marketing Research Process
Step 1: Define the Problem & Research objectives
27

Marketing Management defines the problem

 Exploratory Research – often Priliminary to help define the problem or
hypothesis
 Descriptive Research to e.g. demographics and attitudes of a typical

customer
 Causal Research to test hypothesis about cause and effect relationship

e.g. Badmouthing is caused by Triage?

 Not too broad - What features should be in our new mobile phone model
 Not too narrow - Should the internet connectivity be through 3G if we

increase price by 45%

 Problem statement should be Balanced, well-thought and result-

oriented MG 220 Marketing Management | Part 2
 The Marketing Research Process
Step 2: Develop the Research Plan

Research Approaches for

gathering Primary Data
• Observation
• Focus groups
• Surveys
Data Sources • Behavioral data
• Secondary data • Experiments
• Primary data

Research instrument
Sampling plan • Questionnaires
Contact method • Qualitative measures
• Technological devices
 The Marketing Research Process
Step 2: Develop the Research plan
29

Decisions for Data Sources

 Secondary data – collected for another purpose

Readily available | Good starting point | Low cost |Company
can’t collect on its own.
Research from past models | competitor analysis

 Primary data – specifically for this project

Focus of Main research | critical information
Needs to be designed completely based on given problem
MG 220 Marketing Management | Part 2
 The Marketing Research Process
Step 2: Develop the Research plan
30

Decisions for Research Approaches

 Observational Research (best suited for exploratory research)
Unobtrusive observing of customers
(Huggies customers wearing “glasses” with gopros so that observers see what they see)
Ethnographic Research - Sending trained observers to study consumers in
“natural habitat” Nokia designed 1200 model on shared usage
 Focus Group Research (Usually in Qualitative Research)
Gathering of consumers for discussing the problem Carefully selected
and observed
(selected mobile phone customers can be invited. Videoconferencing and Internet can be used)
 Survey Research (Usually in Quantitative Research)
Learning more about consumers. Mass activity. Descriptive Research
(A survey among existing mobile phone customers)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Step 2: Develop the Research plan
31

Decisions for Research Approaches

 Behavioral data
Purchasing behavior data or usage data or preference data
(Data from datacenters showing what is usage of different functions)

 Experimental Research
Primary Data, matched groups of subjects, different
treatment checking for responses.
(Selecting matched groups of subjects, giving them different treatments,
controlling unrelated factors, and checking for differences in group responses)
MG 220 Marketing Management | Part 2
 The Marketing Research Process
Step 2: Develop the Research plan
32

Decisions for Research Instruments

 Questionnaires
A set of questions | carefully developed and pre-tested
Closed-end questions: MCQs | Open-ended questions: descriptive
(A questionnaire developed for users)

 Qualitative measures
Qualitative analysis of consumers’ behaviors and interpretation
May involve psychological tests | Possible only for small group
(observe consumers using phones)

 Mechanical devices
Devices (galvanometers, eye cameras, brain scans) to observe user’s reaction on exposed to
product
(view user’s experience on seeing a prototype)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Step 2: Develop the Research plan
33

Decisions for Sampling Plan

 Sampling Unit - Who is to be surveyed
Based on product, problem etc.
(High-end users, corporate clients, access to data networks)

 Sample size - How many people to be surveyed

Again based on requirements, budget etc.
General rule: Larger sample => better results
(Total potential user base in Pakistan: 10Mn => e.g. sample: 1K)

 Sampling Procedure - How respondents shall be chosen

Probability & Non-probability sampling techniques
(Convenience and judgment sampling for mobile phone users)
MG 220 Marketing Management | Part 2
 The Marketing Research Process
Step 2: Develop the Research plan
34

Contact Methods

Telephonic interview
Mail Questionnaire Quick and convenient. Questions might be clarified
Access to people who cannot or do not want to be easily
interviewed. Use Simple questionnaire. Cost per respondant is high
Low cost per respondant. Response rate is good | but cannot be too long or
Very low response rate, literacy issues, mailing lists personalized
(send a questionnaire to existing user with monthly (Make a call to 500 of existing users for a quick
invoice) interview)

Online interview
Personal interview Efficient and highly used
Most versatile and elaborate method Inexpensive | faster | More ‘honesty’ | Versatile
Most expensive and requires lot of administrative using technology
work Small and skewed sample | technological problems
Arranged (meeting) | Intercept (in malls etc.) (Use online advertising or even website to request a
(Interviewing customers visiting service centers) survey)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Step 3: Collect the information
35

 This is the execution of Step 2

 Most expensive and most prone to error
 Errors can be:
 Respondents not available. Need to re-engage
(typical for high-end clients)
 Respondents refuse to cooperate
(typical for high-end clients)
 Give dishonest or biased answers
(biased because of very recent experience)
 Interviewers can be biased or dishonest/take shortcuts
(just filling false information)

 Still: Getting the right respondents is critical

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Step 4: Analyze the information
36

 Data tabulation
 Frequency distributions
 Statistical analysis using Advanced tools

 Note: Donot try too hard to impress, overwhelming the managers with
numbers and fancy stats.
 Statistically Significant vs. Managerially significant.
 Managers can be biased, they may be more accepting of things that
are closer to their expectation.
 Hence open discussion on the interpretation of results between
Managers and Researchers can lead to a more useful understanding.
MG 220 Marketing Management | Part 2
Former marketing research
executive for General Foods
concluded that Star Wars would
fail at the box office. The film
grossed $4.3 billion in box office
receipts.
7 Characteristics of Good Marketing Research
1. Scientific method
2. Research creativity
3. Multiple methods
4. Interdependence of models and data
5. Value and cost of information
6. Healthy skepticism
7. Ethical marketing
 The Marketing Research Process
Step 5: Present the Findings
39

 Researchers’ findings
 Related to management’s defined problem
 Irrelevant information not required
(Give a finding of what features are wanted by what kind of customers - users, new
users, age-wise etc.)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Step 6: Make the Decision
40

 Management’s task
 Based on what researcher has provided

(Marketing and Product Development team takes the final decision based on available
results and information)

MG 220 Marketing Management | Part 2

 The Marketing Research Process
Overcoming barriers to use of Marketing Research
41

 Narrow conception of research

 Uneven (or even low) caliber of researchers
 Poor framing of the problem
 Late and occasionally erroneous findings
 Personality and presentational differences

 Remaining topics in Chap 4 are NOT included

MG 220 Marketing Management | Part 2

 Cultivating Customer Relationships
Customer Relationship Management (CRM)
42

 CRM: Process of carefully managing detailed information about

individual customers and carefully managing all customer’s “touch-
points” to maximize customer loyalty
 Personalizing Marketing:
Framework for one-to-one marketing
 Identify your prospects and customers
 Differentiate customers in terms of:
(1) their needs and (2) their value to company
 Interact with individual customers to improve knowledge about their needs
 Customize Products, Services and Messages for each customer
 Customer Empowerment – “We need to learn to let go”
 Customer Reviews & Recommendations

42
MG 220 Marketing Management