Factors Affecting Consumer Behaviour

SCANNING THE MARKETING
ENVIROMENT, FORECASTING
DEMAND, AND CONDUCTING
MARKETING RESEARCH
PRESENTED BY
MUHAMMAD REHAN
KIRAN AZAM
SHAFAQ GULL
SADIA GUL
AMIR ASGHAR
ASMA IQBAL
OBJECTIVE
In this chapter, we consider how firms can
develop processes to identify and track
important macro-environment trends

develop good sales forecasts
conduct more customized research
develop effective metrics for measuring
marketing performance
WHAT IS
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.
COMPONENTS OF A MODERN
MARKETING INFORMATION SYSTEM
Marketers have the major responsibility for
identifying significant marketplace changes.
They have two advantages for the task:
disciplined methods for collecting information,
and time spent interacting with customers and
observing competitors and other outside groups.
COMPONENTS OF A MODERN
MARKETING INFORMATION SYSTEM
Internal records
Marketing intelligence activities
Marketing research
Information Needs Probes

1. What Decision do you regularly make?
2. What information do you need to make these decisions?
3. What information do you regularly get?
4. What special studies do you periodically request?
5. What information d would you want that you are not getting now?
6. What information would you want daily? Weekly? Monthly? Yearly?
7. What topic would you like to be kept informed of?
8. What data analysis and reporting programs would you want?
9. What are the most helpful improvements that could be made in the present
marketing information system?
INTERNAL RECORDS
To spot important opportunities and potential problems,
marketing managers rely on internal reports of orders, sales,
prices, cost, inventory levels, receivables, and payables.
Order-to-Payment
Cycle
Databases,
Warehousing,
Data Mining
Sales
Information
System
THE ORDER-TO- PAYMENT CYCLE

Customer favors firms that can promise timely
delivery, companies need to performs these steps
quickly and accurately.
Many firms use the Internet and extranets to improve
the speed, accuracy, and efficiency of the order-topayment cycle
SALES INFORMATION SYSTEMS

Marketing managers need timely and accurate reports
on current sales. Wal-Mart operates a sales and
inventory data warehouse that captures data on every
items for every customer, every store, every day and
refresher it every hour.
DATABASES, DATA WAREHOUSING, AND

DATA MINING
Companies organizer their information in to customer,
product, and salesperson databases-and then combine their
data.
The customer databases will contain every customers name,
address, past transactions, and sometimes even demographics
and psychographics (activities, interest, and opinions).
MARKETING INTELLIGENCE
The 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.
The internal records system supplies results data, but the
marketing intelligence system supplies happenings data.
Marketing managers collect marketing intelligence in
a variety of different ways, such as by
reading books, newspapers, and trade publications
talking to customers, suppliers, and distributors
monitoring social media on the internet
and meeting with other company managers.
Train And Motivate The Sales Force To Spot And Report New
Developments
Motivate Distributors, Retailers, And Other Intermediaries To
Pass Along Important Intelligence
Hire External Experts To Collect Intelligence
Network Internally And Externally
Set up a customer advisory panel
Take advantage of government data resources
Purchase information from outside suppliers
ANALYZING THE
MACROENVIRONMENT
IMPORTANT DEFINITIONS
6 MAJOR FORCES IN THE ENVIRONMENT:
Demographic
Economic
Sociocultural
Natural
Technological
Political-legal
Needs and Trends

Fad
Trend
Megatrend
Fad: A product, service, or idea that is

extremely popular for a very brief period of time
and then becomes unpopular just as quickly.
Examples:
Atkins diet plan
Pokemon cartoons
Trend: A pattern or direction in the way

something is changing; a movement toward a
style or idea
Examples: Organic food products, shift towards
a healthier lifestyle
Mc Donalds has started to post calorie data in
menus, adding several healthier options to menu
Megatrend: A large social, economic, political

or technological change that is slow to form, and
once in place, influences us for ten years or
longer.
Examples include:
Urbanization
Shrinking families
Increasing life expectancy
MAJOR FORCES OF THE ENVIRONMENT

Companies need to identify and monitor these
forces to be successful
Each force, and their interaction with other
forces, can lead to new opportunities and threats
for the company
MAJOR FORCES IN THE ENVIRONMENT

Demographic
Political-Legal
Economic
Technological
Socio-Cultural
Natural
THE DEMOGRAPHIC ENVIRONMENT

Population growth:
Developing regions: 84% of worlds population,
growing at 1-2% /year
Developed countries: Population growing at
0.3% / year
A growing population doesnt necessarily mean
growing markets unless there is sufficient
purchasing power.

Population age mix:
Marketers divide the population into 6 age
groups: pre-school, school age, teens, young
adults 20-40, middle aged 40-65, and elderly 65
onwards.
Ethnic and racial groups

Educational groups:
Illiterates, high school dropouts, high school
diplomas, college degrees and professional
degrees.
Household patterns: Nuclear family, jointfamily, singles and couples.
THE ECONOMIC ENVIRONMENT

The available purchasing power in an
economy depends on:
Income levels
Savings
Debt
Credit availability
Prices
THE ECONOMIC ENVIRONMENT

Marketers distinguish countries using 5
income-distribution patterns:
1) very low incomes
2) mostly low incomes
3) very low, very high incomes
4) low, medium, high incomes
5) mostly medium incomes
SOCIO CULTURAL ENVIRONMENT

A set of beliefs, customs, practices and behavior that
exists with a population is called Culture.
The social dimension or environment of a nation
determines the value system of the society which, in
turn affects the functioning of the business.
If we are doing business than we need to focus on
culture, cultural environment consist of religious,
family, educational and social system.
Before the company decided to move overseas to

decrease their overhead they researched the sociocultural environment.
International companies often include
an examination of the socio-cultural
environment prior to entering their target markets.
NATURAL ENVIRONMENT
Natural Environment involves all the natural
resources.
Many business operations depend on the
environment, as it can be the primary source of raw
materials and can affect business processes
Companies in the industrial or manufacturing
industry often work with different kinds of
equipment, machinery and chemical-producing
agents.
In effect, a business' day-to-day operations can pose an

ongoing threat to the natural environment.
The natural environment can influence the business in a way
of variety.
companies must comply with environmental regulations in
all stages of a business' development
Technological Environment
Changes in technology affect how a company will
do business
Technological change is improvement in the 'art' of
making products or developing processes.
A technological process is a means to make and
improve products and services
Business technology has revolutionized the way
companies conduct business.
Small businesses use computers, servers, websites

and personal digital products to develop
competitive advantages in the economic
marketplace
Small business owners can use technology to
reduce business costs.
POLITICAL LEGAL
ENVIRONMENT
The Environment can be simply described as the laws and
regulations that business has to follow in order to make sure
the business owners do not get arrested.
Laws are made by politicians
The political environment in a country affects business
organizations and could introduce a risk factor that could
cause them to suffer a loss.
Businesses need to be prepared to deal with the

fallouts of government politics.
The political environment in a country affects its
economic environment
FORECASTING AND
DEMAND MEASUREMENT
Marketing
How can we measure market demand?

Potential market
Available market
Target market
Penetrated market
The potential market is the set of consumers with a

sufficient level of interest in a market offer.
The available market is the set of consumers who
have interest, income, to buy a particular offer.
The target market is the part of the qualified
available market the company decides to pursue.
The penetrated market is the set of consumers who
are buying the companys product.
DEMAND MEASUREMENT
MARKET DEMAND
COMPANY DEMAND
A defined marketing
program by a defined
customer group in a
defined geographical
area in a defined time
period in a defined
marketing environment.
It is the companys
estimated share of
market demand at
alternative levels of
company marketing
effort at a given time
period.
ESTIMATING CURRENT DEMAND:

Total Market Potential
Calculations
Potential number of buyers Average quantity each purchases Price
Chain-ratio method
Market
potential
for ice
cream
among
urban
adults
urban
population
=
above 18
years
Personal
discretionary
X
income per
capita
Average
percentage of
X discretionary
income spent on
food
Average
percentage of
amount spent
on food that is
spent on dairy
products
Expected
percentage of
Amount spent
on dairy
X
products that
will be spent
on ice cream
ESTIMATING CURRENT DEMAND:

Area Market Potential
MARKET-BUILDUP (Business Goods Firms)
The market-buildup method calls for

identifying all the potential buyers in each
market and estimating their potential
purchases.
Market Factor Index Method (Consumer Goods

Firms)
A forecasting method that identifies market factors

that correlate with market potential and combines
them into a weighted index.
Income , sales, Population, Buying Power
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.
Need For Marketing Research
To undertake marketing effectively

Changes in technology
Changes in consumer tastes / demand
Changes in the product ranges of competitors
THE MARKETING RESEARCH PROCESS

Define the problem
Develop research plan
Collect information
Analyze information
Present findings
Make
decision
1.Define The Problem And
Research Objectives
A well-defined problem provides direction and
maintains uniformity in research work. It also
helps in developing alternatives and setting
priorities.
A problem well-defined is half solved
2. Develop A Research Plan

A research plan helps in estimating the time, cost and
human resources required for a research work. A
research plan determines five vital aspects.
Data sources
Research approaches
Research instruments
Sampling plan
Contact method
3. Collect The Information

This is the most expensive stage of research.
Collecting primary data by interviewing, observing,
and/or experimenting can be done by people or
machines
4. Analyze The Information

The value of research is determined by its results.
Thus, data collected have to be analyzed and
interpreted. The researcher tabulates the data.
Averages and measures of dispersion are calculated
for major variables.
5. Present The Findings

The researcher should present findings that are
relevant to research objective. It has to help
management in taking decisions. A research
report is an effective tool used to present
research findings.
6. Make the Decision

Manager decision to decide whether to use,
discard or carry out more research.
MEASURING MAKETING
PRODUCTIVITY
RATIONALE FOR MARKETING

MEASUREMENT
Marketers are facing substantiative pressures in
order to deliver quantifiable evidence to senior
management
The marketing strategy corresponds to the
increase in the efficiency and effectiveness in
marketing activities
The investment of firms are based on
quantiafiable terms like Broad Band Awareness,
customer staisfaction, and future prospects for the
company
GUCCI
COMPLEMENTARY APPROACHES TO
MEASURING MARKETING PRODUCTIVITY
2.
Marketin
g Mix
Modeling
MARKETING
DASHBOAR
DS
WHAT IS MARKETING MATRICS?

Marketing metrics is the set of measures that
helps marketers quantify, compare, and
interpret marketing performance.
External
Awareness
Market share
Relative price
Number of complaints
Customer satisfaction
Distribution
Total number of customers
Loyalty
Internal
Awareness of goals
Commitment to goals
Active support
Resource adequacy
Staffing levels
Desire to learn
Willingness to change
Freedom to fail
Autonomy
WHAT IS 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.
However, Marketing Mix Modeling fails to
incorporate metrics associated to competitors
advertising, and trade promotions.
WHAT IS MARKETING DASHBOARDS?

The management can indulge an assembly of summary set of
related to internal and external measures by using Marketing
Dashboards for synthesis and interpretation.
A customer-performance scorecard records how well the
company is doing year after year on customer-based measures.
A stakeholder-performance scorecard tracks the satisfaction of
various constituencies who have a critical interest in and
impact on the companys performance including employees,
suppliers, banks, distributors, retailers, and stockholders.
Table for Sample CustomerPerformance Scorecard Measures

% of new customers to average #
% of lost customers to average #
% of win-back customers to average #
% of customers in various levels of satisfaction
% of customers who would repurchase
% of target market members with brand recall
% of customers who say brand is most preferred
MARKETING DASHBOARDS TO IMPROVE

EFFECTIVENESS AND EFFICIENCY

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SCANNING THE MARKETING

important macro-environment trends

Information Needs Probes

THE ORDER-TO- PAYMENT CYCLE

SALES INFORMATION SYSTEMS

DATABASES, DATA WAREHOUSING, AND

A marketing intelligence system is a set of procedures and

Needs and Trends

Fad: A product, service, or idea that is

Trend: A pattern or direction in the way

Megatrend: A large social, economic, political

MAJOR FORCES OF THE ENVIRONMENT

MAJOR FORCES IN THE ENVIRONMENT

THE DEMOGRAPHIC ENVIRONMENT

THE DEMOGRAPHIC ENVIRONMENT

THE DEMOGRAPHIC ENVIRONMENT

THE ECONOMIC ENVIRONMENT

THE ECONOMIC ENVIRONMENT

SOCIO CULTURAL ENVIRONMENT

Before the company decided to move overseas to

In effect, a business' day-to-day operations can pose an

Small businesses use computers, servers, websites

Businesses need to be prepared to deal with the

How can we measure market demand?

The potential market is the set of consumers with a

ESTIMATING CURRENT DEMAND:

ESTIMATING CURRENT DEMAND:

The market-buildup method calls for

Market Factor Index Method (Consumer Goods

A forecasting method that identifies market factors

ESTIMATING FUTURE DEMAND

Survey of Buyers Intentions

WHAT IS MARKETING RESEARCH?

To undertake marketing effectively

THE MARKETING RESEARCH PROCESS

1.Define The Problem And

2. Develop A Research Plan

3. Collect The Information

4. Analyze The Information

5. Present The Findings

6. Make the Decision

RATIONALE FOR MARKETING

WHAT IS MARKETING MATRICS?

WHAT IS MARKETING MIX

WHAT IS MARKETING DASHBOARDS?

Table for Sample CustomerPerformance Scorecard Measures

MARKETING DASHBOARDS TO IMPROVE

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