DBM

SLIM•Chapter- 02•Scanning Marketing Environment and the Marketing Research process

Tharaka Dias

• MBA(USA), BBA(USA), Dip in Mgt, ACIM(UK), FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia), MSLIM

“It is useless to tell a river to stop running, the best thing is to learn swimming in the direction it is flowing”

01. Marketing Environment Framework

A company’s marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers.(Philip Kotler- 12t

h

edition)

The Marketing Environment The actors and forces outside

marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.

The marketing environment is made up of micro-environment (The Company, Suppliers,

Marketing Intermediaries, Customers Markets, Competitors, And Publics),and

macro-environment (Demographic, Economic, Natural, Technological, Political, And Culture Forces).

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Micro-environment

The actors close to the company that affect its ability to serve its customer – the company, suppliers, marketing intermediaries, customers markets, competitors, and publics.

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Marketing

The company

suppliers

Marketing intermediaries

customers

competitors

publics

Microenvironment

Marketing must consider other parts of the organization including finance, R&D, purchasing, operations and accounting

Marketing decisions must relate to broader company goals and strategies

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Microenvironment

Marketers must watch supply availability and pricing

Effective partnership relationship management with suppliers is essential

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Microenvironment

Help to promote, sell and distribute goods to final buyers

Include resellers,

physical distribution firms,

marketing services agencies, and

financial intermediaries

Effective partner relationship management is essential

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Microenvironment

The five types of customer marketsConsumerBusinessResellerGovernment International

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Microenvironment

Conducting competitor analysis is critical for success of the firm

A marketer must monitor its competitors’ offerings to create strategic advantage

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Microenvironment

A group that has an actual or potential interest in or impact on an organization

Seven publics include:● Financial● Media● Government● Citizen-action● Local● General● Internal

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Actors

1 •The company

2 •Suppliers

3 •Marketing intermediaries

4 •Customers

5 •Competitors

6 •Publics

Macro-environment

The larger social forces that affect the micro-environment – demographic, economic, natural, technological, political, and culture forces.

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Marketing

Demographic forces

Economic forces

Natural forcesTechnological forces

Political forces

Cultural forces

Macro-environment

Demographic environment“The study of human populations in terms of size, density,

location, age, gender, race, occupation and other statistics”

Age structure of the population Geographic shifts in population

○ people move to the cities in search of employment and a higher standard of living

Education (a better-educated, more whit-collar, more professional population)

Changing in marital states (more single people)

The changing Egyptian family Sub-cultures

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Macro-environment

Economic environment

“Factors that affect consumer buying power and spending patterns”

Value Marketing has become the watchword for many marketers. They are

looking for ways to offer today’s more financially cautious buyers greater value.

Marketers should pay attention to income distribution as well as average income.

○ Upper-class consumers, whose spending patterns are not affected by current economic events.

○ The middle class is somewhat careful about its spending, but can still afford the good life some of the time.

○ The working class must stick close to the basics of food, clothing, and shelter.

○ The underclass must count their pennies when making even the most basic purchases.

● Consumers at different income levels have different spending patterns.14

The Macroenvironment

The Economic Environment

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• Two types of national economies:o subsistenceo industrial

Macro-environment

Natural Environment:“Involves the natural resources that are needed as inputs by

marketers or that are affected by marketing activities”

Trends

Shortages of raw materials

Air and water may seem to be infinite resources, but some groups see

long-run dangers.

Increased pollution

Industry will almost always damage the quality of the natural environment.

Increased government intervention

The governments of different countries vary in their concern and efforts to promote a clean environment. 16

The Macroenvironment

Many companies use recycling to help protect natural resources

“Environmental Sustainable Strategies”17

Macro-environment

Technological environment“Forces that create new technologies, creating new

products and market opportunities”

The most dramatic force shaping our destiny

New technologies create new markets and opportunities. However, every new technology replaces on older technology.

Marketers should watch the technological environment closely.

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Macro-environment

Political environment“Consists of laws, government agencies and

pressure groups that influence or limit various organizations and individuals in a given society”

Legislation affecting businesses worldwide has increased

Laws protect companies, consumers and the interests of society

Increased emphasis on socially responsible actions 19

Macro-environment Cultural Environment

Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors.

Core beliefs

values are passed on from parents to children and are reinforced by schools, religion, business, and government.

Secondary beliefs

are more open to change.(Example: marriage)20

Macro-environment

Cultural Environment Includes people’s views of… Themselves

Identify with brands for self-expression

Others

Recent shift from “me” to “we” society

Organizations

Trend of decline in trust and loyalty to companies

Society

Patriotism on the rise

Nature

“lifestyles of health and sustainability”

Universe

Includes religion and spirituality21

The Marketing Research process

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.

The Marketing Research Process

Define the problem

Develop research plan

Collect information

Analyze information

Present findings

Makedecision

Step 1

Define the problem (e.g., Will offering an in-flight Internet service create enough incremental preference and profit of American Airlines to justify its cost?)

Specify decision alternatives (e.g., Should American offer an Internet connection?)

State research objectives (e.g., types of 1st class passengers are likely to use internet?)

Step 2

Data Sources

ContactMethods

ResearchInstruments

SamplingPlan

Research Approach

Research Approaches

Observation--unobtrusive Ethnographic--link between culture &

behavior &/or how cultural processes develop over time (participant observation) 

Focus group—discuss topics of interest Survey—knowledge, beliefs, preferences,

satisfaction Behavioral data--Data—purchasing data Experimentation—cause and effect

relationships

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Focus Group in Session

Research Instruments

Questionnaires Qualitative Measures Technological Devices

Questionnaire Do’s and Don’ts Ensure questions are free of bias Make questions simple Make questions specific Avoid jargon Avoid sophisticated words Avoid ambiguous words

Avoid negatives Avoid hypotheticals Avoid words that could be misheard Use response bands Use mutually exclusive categories Allow for “other” in fixed response questions

Qualitative Measures

Word association—words are presented, one at a time, and respondents mention the first word that comes to mind.

Projective techniques—give people an incomplete stimulus and ask them to complete it.

Visualization—requires people to create a collage from magazine or drawing to depict their perceptions

Brand personification—ask subjects what kind of person they think of when the brand is mentioned.

Laddering—series of increasingly more specific “why” questions can reveal consumer motivation and consumers’ deeper, more abstract goals.

Qualitative Measures

Shadowing—observing peopleShadowing—observing people

Behavior mapping—photographing people with a space—2 or 3 days

Behavior mapping—photographing people with a space—2 or 3 days

Consumer journey—keeping track of interactions a consumer has with a product, service, or space

Consumer journey—keeping track of interactions a consumer has with a product, service, or space

Camera journals—ask consumers to keep visual diaries of activities and impression

related to a product

Camera journals—ask consumers to keep visual diaries of activities and impression

related to a product

Extreme user interviews—talking to people about a product and evaluating their experience with it

Extreme user interviews—talking to people about a product and evaluating their experience with it

Storytelling—prompting people to tell personal stories about their consumer experiences

Storytelling—prompting people to tell personal stories about their consumer experiences

Unfocused groups—interview a diverse group of people to explore ideas

Unfocused groups—interview a diverse group of people to explore ideas

Technological DevicesGalvanometers (measure

interest or emotions aroused byExposure to a specific ad or picture)

Tachistoscope (flashes an ad to a Subject with an exposure interval and

respondent describes everything he/she recalls)

Eye cameras (study respondents’ eye movement to see where their eyes

land 1st and how long, etc.)

Audiometers (record when TV is on and the channel)

GPS (global positioning system, can Determine how many billboards a person

may walk or drive by during a day)

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?

Types of Samples

Probability Simple random

Every member of population has an equal chance of selection

Stratified random Population is divided into

mutually exclusive groups (age groups) and random samples are drawn from each group

Cluster Population is divided into

mutually exclusive groups (city blocks) and a sample is taken from each group

Non-probability

Convenience Selects the most

accessible population members

Judgment Selects population

members who are good prospects for accurate information

Quota Selects and interviews

a prescribed number of people in each of several categories

Contact Methods

Mail Questionnaire(For people would not give

personal interviews or whose responses might be biased or distorted by interviewer)

Telephone Interview(Gather information quickly, however interview are short and non-personal)

Personal Interview(Most versatile and expensive,

subject to interview bias or distortion)

Online Interview(Inexpensive, faster, honest, versatile, samples small

and skewed, tech problems and inconsistencies)

Pros and Cons of Online Research

Advantages Inexpensive Fast Accuracy of data, even for sensitive

questions Versatility

Disadvantages Small samples Skewed samples Technological problems Inconsistencies

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.

Barriers Limiting the Use of Marketing Research

A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous

findings Personality and presentational

differences

Thank you