Chapter 3

Scanning the Marketing

Environment, Forecasting
Demand , and Conducting
Market Research

Chapter Questions

What are the components of a modern

marketing information system?
What are useful internal records?
What makes up a marketing intelligence
system?
What are some influential macro
environment developments?
How can companies accurately measure
and forecast demand?

Chapter Questions

What constitutes good marketing research?

What are the best metrics for measuring
marketing productivity?
How can marketers assess their return on
investment of marketing expenditures?

What Is a
Marketing Information System?
A marketing information system
consists of people, equipment, and
procedures to gather, sort, analyze,
evaluate, and distribute needed, timely,
and accurate information to
marketing decision makers.

Information Needs Probes

What decisions do you regularly make?

What information do you need to make these
decisions?
What information do you regularly get?
What studies do you periodically request?
What information would you want that you are
not getting now?
What are the four most helpful improvements
that could be made in the present marketing
information system?

Internal Records and

Marketing Intelligence

Order-to-payment cycle
Sales information system
Databases, warehousing, data mining
Marketing intelligence system

What Is a
Marketing Intelligence System?
A marketing intelligence system is
a set of procedures and sources that
managers use to obtain everyday
information about developments in
the marketing environment.

Steps to Quality Marketing Intelligence

Train sales force to scan for new developments

Motivate channel members to share intelligence
Hire external experts to collect intelligence
Network externally
Utilize a customer advisory panel
Utilize government data sources
Purchase information

Important Sources of Secondary Data

in South Asia

Statistical Outline of India

Centre for Monitoring Indian Economy
(CMIE)
The Marketing Whitebook
Readership Surveys
National Council of Applied Economic
Research (NCAER)
Indian Trade Statistics

Important Sources of Secondary Data

in South Asia

Web sites such as magindia.com and

agencyfaqs.com
Euromonitor International
Statistics Division of the Government of
Pakistan (http://www.statpak.gov.pk)
The Bangladesh Bureau of Statistics
(http://www.bbs.gov.bd)
The Department of Census and Statistics, Sri
Lanka (http://www.statistics.gov.lk)

Sources of Competitive Information

Independent customer goods and service

review forums
Distributor or sales agent feedback sites
Combination sites offering customer reviews
and expert opinions
Customer complaint sites
Public blogs

Needs and Trends

Fad
Trend
Megatrend

Major Forces in the Environment

Demographic
Political-legal

Economic

Technological

Socio-cultural
Natural

Population and Demographics

Population growth
Population age mix
Ethnic and other markets
Educational groups
Household patterns

Economic Environment

Consumer Psychology
Income Distribution
Income, Savings, Debt, Credit

Income Distribution

Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies

Income Distribution in India

Sociocultural Environment

Views of themselves
Views of others
Views of organizations
Views of society
Views of nature
Views of the universe

Other Cultural Factors in Marketing

Core beliefs: hard to change

Secondary beliefs: easier to change
Existence of subcultures

Natural Environment

Initiatives taken by the Government

Initiatives taken by citizens

Technological Environment

Accelerating Pace of change

Opportunities for innovation
Varying R&D budgets
Increased regulation of change

The Political-Legal Environment

Business Legislation
Growth of Special Interest
Groups

Forecasting and
Demand Measurement

How can we measure market demand?

Potential market-Interest exists but no
income and access to the product
Available market- who have interest, income
and access to the product
Target market-Part of the qualified available
market.
Penetrated market- Those who buy the
companys product

A Vocabulary for
Demand Measurement
Market Demand
Market Forecast
Market Potential
Company Demand
Company Sales Forecast
Company Sales Potential

Market Demand Functions

Estimating Current Demand:

Total Market Potential

Calculations

Multiply potential number of buyers by

average quantity each purchases times
price
Chain-ratio method

Estimating Future Demand

Survey of Buyers Intentions

Composite of Sales Force Opinions
Expert Opinion
Past-Sales Analysis
Market-Test Method

What Is Marketing Research?

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

Market Research process

Step 1: Define the Problem

Define the problem

Specify decision alternatives
State research objectives

Step 2: Develop the Research Plan

Data sources
Research approach
Research instruments
Sampling plan
Contact methods

Research Approaches

Observational and ethnographic

Focus group
Survey
Behavioral data
Experimental research

Research Instruments

Questionnaires
Qualitative Measures
Technological Devices

Sampling Plan

Sampling unit: Who is to be surveyed?

Sample size: How many people should be
surveyed?
Sampling procedure: How should the
respondents be chosen?

Contact Methods

Mail contacts
Telephone contacts
Personal contacts
Online contacts

What Is a
Marketing Decision Support System
(MDSS)?

A marketing decision support system is a

coordinated collection of data, systems,
tools, and techniques with supporting
hardware and software by which an
organization gathers and interprets relevant
information from business and environment
and turns it into a basis for marketing action.

Characteristics of good Marketing

Research

What Are Marketing Metrics?

Marketing metrics are the set of measures
that helps marketers quantify, compare, and
interpret marketing performance.

Marketing-Mix Modeling
Marketing-mix models analyze data from
a variety of sources, such as retailer
scanner data, company shipment data,
pricing, media, and promotion spending
data, to understand more precisely the
effects of specific marketing activities.

For Review

What are the components of a modern

marketing information system?
What are useful internal records?
What makes up a marketing intelligence
system?
What are some influential macroenvironment
developments?
How can companies accurately measure and
forecast demand?

For Review

What constitutes good marketing research?

What are the best metrics for measuring
marketing productivity?
How can marketers assess their return on
investment of marketing expenditures?