Chapter 5

1. Chapter 5 Understanding Markets, Market Demand, and the Marketing Environment PowerPoint by Karen E. James Louisiana State University - Shreveport To accompany A Framework for Marketing Management, 2nd Edition

2. Objectives • Identify the major components of a marketing system. • Understand how marketers can improve marketing decisions through intelligence systems, marketing research, and marketing decision support systems. To accompany A Framework for Marketing Management, 2nd Edition

3. Objectives • Learn how demand can be more accurately measured and forecasted. • Understand key demographic, economic, natural, technological, political-legal, and socio-cultural developments. To accompany A Framework for Marketing Management, 2nd Edition

4. Supporting Marketing Decisions • A Marketing Information System is defined as . . . “people, equipment, and procedures that gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.” To accompany A Framework for Marketing Management, 2nd Edition

5. Supporting Marketing Decisions • Marketing Information Systems compile information from: • Internal records systems • Marketing intelligence systems • Marketing research • Marketing decision support analysis To accompany A Framework for Marketing Management, 2nd Edition

6. Supporting Marketing Decisions • Internal Records Systems • Order-to-payment cycle is key • Timely sales reports help to better manage inventory • Customer, product, salesperson and other databases can be mined for fresh insights To accompany A Framework for Marketing Management, 2nd Edition

7. Supporting Marketing Decisions • Improving the Quality of Marketing Intelligence System Data Requires: • Training and motivating sales force to report developments • Motivating channel members to share important intelligence • Collecting competitive intelligence To accompany A Framework for Marketing Management, 2nd Edition

8. Supporting Marketing Decisions • Improving the Quality of Marketing Intelligence System Data Requires: • Developing a customer advisory panel • Purchasing information from commercial data sources • Establishing a marketing information center within the company To accompany A Framework for Marketing Management, 2nd Edition

9. Supporting Marketing Decisions • The Marketing Research Process: • Defining the problem and research objectives • Developing the research plan • Collecting the information • Analyzing the information • Presenting the findings • Making the decision To accompany A Framework for Marketing Management, 2nd Edition

10. Supporting Marketing Decisions • Developing the Research Plan Involves: • Gathering secondary and primary data • Selecting one or more research approaches for primary data collection • Using the appropriate research instrument • Developing a sampling plan • Determining subject contact methods To accompany A Framework for Marketing Management, 2nd Edition

11. Supporting Marketing Decisions • Approaches for primary data collection include: • Observational research • Focus-group research • Survey research • Behavioral data • Experimental research To accompany A Framework for Marketing Management, 2nd Edition

12. Supporting Marketing Decisions • A Marketing Decision Support System is defined as a . . . “coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets information from business and the environment and turns it into a basis for marketing action.” To accompany A Framework for Marketing Management, 2nd Edition

13. Essential Aspects The market Market demand Company demand and sales forecasts Current demand Future demand Market Potential market Available market Target market (served market) Qualified available market Penetrated market Forecasting and Demand Measurement To accompany A Framework for Marketing Management, 2nd Edition

14. Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Market demand Market minimum Market forecast Market potential Nonexpansible vs. expansible markets Primary vs. secondary demand Market forecast Market potential Forecasting and Demand Measurement To accompany A Framework for Marketing Management, 2nd Edition

15. Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Company demand Company sales forecast Sales quota Sales budget Company sales potential Forecasting and Demand Measurement To accompany A Framework for Marketing Management, 2nd Edition

16. Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Total market potential Area market potential Market-buildup method Forecasting and Demand Measurement To accompany A Framework for Marketing Management, 2nd Edition

17. Essential Aspects The market Measuring demand Company demand and sales forecasts Current demand Future demand Many Forecasting Methods: Buyer intentions survey Composite of sales force opinions Expert opinion Past-sales analysis Market-test method Forecasting and Demand Measurement To accompany A Framework for Marketing Management, 2nd Edition

18. Macroenvironmental Trends and Forces • Demographic Environment • Worldwide population growth • Population age mix • Ethnic markets • Educational groups • Household patterns • Geographic population shifts • Rise of micromarkets To accompany A Framework for Marketing Management, 2nd Edition

19. Macroenvironmental Trends and Forces • Economic Environment • Income distribution • Savings, debt, and credit availability To accompany A Framework for Marketing Management, 2nd Edition

20. Macroenvironmental Trends and Forces • Natural Environment • Shortage of raw materials • Increased energy costs • Anti-pollution pressures • Changing role of governments To accompany A Framework for Marketing Management, 2nd Edition

21. Macroenvironmental Trends and Forces • Technological Environment • Accelerating pace of technological change • Unlimited opportunities for innovation • Varying R&D budgets • Increased regulation of technological change To accompany A Framework for Marketing Management, 2nd Edition

22. Macroenvironmental Trends and Forces • Political-Legal Environment • Legislation regulating business • Growth of special interest groups To accompany A Framework for Marketing Management, 2nd Edition

23. Macroenvironmental Trends and Forces • Socio-Cultural Environment • World views that consumers hold of themselves, others, society, organizations, nature, and the universe • High persistence of core values • Existence of subcultures To accompany A Framework for Marketing Management, 2nd Edition