Copyright 2009, Prentice-Hall, Inc.3-1 A Framework for Marketing Management Chapter 3 Understanding Markets, Market Demand, and the Marketing Environment.

Copyright 2009, Prentice-Hall, Inc. 3-1

A Framework forMarketing Management

Chapter 3Chapter 3Understanding Markets, Market Demand, and the Marketing Environment

Copyright 2009, Prentice-Hall, Inc. 3-2

Chapter Questions

What are the components of a modern marketing information system?

How can marketers use intelligence systems and marketing research?

How can demand be more accurately measured and forecasted?

What are some important macroenvironmental developments?

Copyright 2009, Prentice-Hall, Inc. 3-3

Marketing Information System (MIS) Consists of people, equipment, and

procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Copyright 2009, Prentice-Hall, Inc. 3-4

MIS Resources

Internal records Marketing intelligence Marketing research

Copyright 2009, Prentice-Hall, Inc. 3-5

Marketing Insights vs. Marketing Research Marketing insights

provide diagnostic information about how and why certain effects are observed in the marketplace, and what that means to marketers.

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

Copyright 2009, Prentice-Hall, Inc. 3-6

Marketing Research Process

Define the problem and research objectives Develop the research plan Collect the information Analyze the information Present the findings Make the decision

Copyright 2009, Prentice-Hall, Inc. 3-7

Step 1: Define the Problem and Research Objectives Define the problem Specify decision alternatives State research objectives

Copyright 2009, Prentice-Hall, Inc. 3-8

Step 2: Develop the Research Plan Identify data sources Design research approach Develop research instruments Design sampling plan Select contact methods

Copyright 2009, Prentice-Hall, Inc. 3-9

Data Sources

Secondary data—collected for another purpose and already exist somewhere.

Primary data—freshly gathered for a specific purpose or a specific research project.

Copyright 2009, Prentice-Hall, Inc. 3-10

Research Approaches

Observational research Focus-group research Survey research Behavioral data Experimental research

Copyright 2009, Prentice-Hall, Inc. 3-11

Research Instruments

Questionnaires Qualitative research techniques Technological devices

Copyright 2009, Prentice-Hall, Inc. 3-12

Sampling Plan

Sampling unit—Who should we survey? Sample size—How many people should we

survey? Sampling procedure—How should we

choose the respondents?

Copyright 2009, Prentice-Hall, Inc. 3-13

Contact Methods

Mail questionnaire Telephone interview Personal interview Online interview

Copyright 2009, Prentice-Hall, Inc. 3-14

Forecasting and Demand Measurement Which market to measure?

Potential market—set of consumers who have sufficient interest in a market offer.

Available market—set of consumers who have interest, income, and access to a particular offer.

Target market—the qualified available market that the company decides to pursue.

Penetrated market—set of consumers who are buying the company’s product.

Copyright 2009, Prentice-Hall, Inc. 3-15

Demand Measurement

Market demand—the total volume for a product that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

Market potential—the limit approached by market demand as industry marketing expenditures approach infinity for a given marketing environment.

Copyright 2009, Prentice-Hall, Inc. 3-16

Company Demand and Sales Forecast Company demand—the company’s

estimated share of market demand at alternative levels of company marketing effort in a given time period.

Company sales forecast—the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.

Copyright 2009, Prentice-Hall, Inc. 3-17

Estimating Current Demand

Total market potential—the maximum number of sales that might be available to all of the industry’s firms during a given period, under a given level of industry marketing effort and environmental conditions.

Area market potential—the market potential of a specific location: Market buildup method Multiple-factor method

Copyright 2009, Prentice-Hall, Inc. 3-18

Estimating Future Demand

Survey of buyers’ intentions Composite of sales force opinions Expert opinion Past-sales analysis Market-test method

Copyright 2009, Prentice-Hall, Inc. 3-19

Macroenvironmental Trends and Forces Demographic Economic Political-legal Natural Social-cultural Technological

Copyright 2009, Prentice-Hall, Inc. 3-20

Demographic Environment

Worldwide population growth

Population age mix Ethnic markets

Educational groups Household patterns Geographical shifts in

population

Copyright 2009, Prentice-Hall, Inc. 3-21

Economic Environment

Income distribution Savings, debt, and credit availability

Copyright 2009, Prentice-Hall, Inc. 3-22

Social-Cultural Environment

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

Copyright 2009, Prentice-Hall, Inc. 3-23

Natural Environment

Shortage of raw materials Increased cost of energy Increased pollution levels Changing role of governments

Copyright 2009, Prentice-Hall, Inc. 3-24

Technological Environment

Accelerating pace of technological change Unlimited opportunities for innovation Varying R & D budgets Increased regulation of technological change

Copyright 2009, Prentice-Hall, Inc. 3-25

Political-Legal Environment

Increase in business legislation Growth of special-interest groups

Copyright 2009, Prentice-Hall, Inc. 3-26

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,

mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2009 Pearson Education, Inc.  Copyright © 2009 Pearson Education, Inc.  Publishing as Prentice HallPublishing as Prentice Hall