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Marketing Management
LECTURE3
Dr. Mohamed Hesham Mansour
MARKETING MANAGEMENT12th edition
3 Gathering
Information and Scanning the Environment
Kotler Keller
3-3
Chapter Questions_1
• What are the components of a modern marketing information system?
• What are useful internal records?
• What is involved in a marketing intelligence system?
3-4
Chapter Questions_2
• What are the key methods for tracking and identifying opportunities in the macroenvironment?
• What are some important macroenvironment developments?
3-5
MARKETERS’ RESPONSIBILTY
• Trend Trackers
• Opportunity seekers
• Disciplined methods for collecting information
• Spend more time interacting with customers and observing competitors
3-6
Consumption Patterns IN Europe
• Chocolate
• Cheese
• Tea
• Cigarettes
3-7
MIS Probes for Information
• What decisions do you regularly make?• What information do you need to make these
decisions?• What information do you regularly get?• What special 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?
3-8
Internal Records
Order-to-PaymentCycle
Databases,Warehousing,
Data Mining
MarketingIntelligence
System
Sales Information
System
3-9
Steps to Improve Marketing Intelligence
Train sales force to scan for new developmentsTrain sales force to scan for new developments
Motivate channel members to share intelligenceMotivate channel members to share intelligence
Network externallyNetwork externally
Utilize a customer advisory panelUtilize a customer advisory panel
Utilize government data resourcesUtilize government data resources
Purchase informationPurchase information
Collect customer feedback onlineCollect customer feedback online
3-10
3-11
Secondary Commercial Data Sources
Nielsen
Information Resources, Inc.
MRCA
Arbitron
Simmons
SAMI/Burke
3-12
Analyzing the Macroenvironment
3-13
Needs and Trends
FadUnpredictable& short-lived
TrendPredictable& durable
MegatrendSlow to form& stay longer
3-14
10 Megatrends Shaping the Consumer Landscape
• Aging boomers• Delayed retirement• Changing nature of
work• Greater educational
attainment• Labor shortages
• Increased immigration• Rising Hispanic
influence• Shifting birth trends• Widening geographic
differences• Changing age
structure
ExerciseWhat are Egypt Megatrends?
3-16
Organizational Environment
• All elements existing outside the boundary of the organization that have the potential to affect the organization
3-17
External Environment● General environment/Societal – affects
indirectly
● Task environment- Affects directly- Influences operations and performances
● Internal environment – elements within the organization’s boundaries
3-18
Organizational Environments
ManagementEmpl
oyee
s Culture
Internal Environment
Suppliers
Co
mp
etitors
CustomersL
abo
r M
arke
t
Legal/Political Economic
Socio-C
ulturalIn
tern
atio
nal
General Environment
Task Environment
Technological
Suppliers
3-19
Environmental Forces
Demographic
EconomicPolitical-Legal
Socio-CulturalTechnological
Natural
3-20
Technological Dimension
• Scientific and technological advances
– Specific industries
– Society at large
• Impact
– Competition
– Relationship with Customers
– Medical advances ( Genome – Cloning)
– Nanotechnology advances
3-21
Technological Environment
Pace of change
Opportunitiesfor innovation
Varying R&D budgets
Increased regulationof change
3-22
3-23
Socio-Cultural Dimension
• Dimension of the general environment– Demographic characteristics– Norms– Customs– Values
3-24
Social-Cultural Environment
Views of themselvesViews of themselves
Views of othersViews of others
Views of natureViews of nature
Views of organizationsViews of organizations
Views of societyViews of society
Views of the universeViews of the universe
3-25
Most Popular American Leisure Activities
• Walking• Gardening• Swimming• Photography• Bicycling• Fishing
• Bowling• Camping• Jogging• Free weights• Golf• Continuing
education
3-26
Population and Demographics
• Size
• Growth rate
• Age distribution
• Ethnic mix
• Educational levels
• Household patterns
• Regional characteristics
• Geographical shifts
3-27
3- Egypt Country Profile3.4 population
Population: 77,505,756 (July 2005 est.)
Age structure: 0-14 years: 33% (male 13,106,043 / female 12,483,899) 15-64 years: 62.6% (male 24,531,266 / female 23,972,216) 65 years and over: 4.4% (male 1,457,097 / female 1,955,235) (2005 est.)
Median age: total: 23.68 years male: 23.31 years female: 24.05 years (2005 est.)
Population growth rate: 1.78% (2005 est.)
Birth rate: 23.32 births/1,000 population (2005 est.)
Death rate: 5.26 deaths/1,000 population (2005 est.)
Population: 77,505,756 (July 2005 est.)
Age structure: 0-14 years: 33% (male 13,106,043 / female 12,483,899) 15-64 years: 62.6% (male 24,531,266 / female 23,972,216) 65 years and over: 4.4% (male 1,457,097 / female 1,955,235) (2005 est.)
Median age: total: 23.68 years male: 23.31 years female: 24.05 years (2005 est.)
Population growth rate: 1.78% (2005 est.)
Birth rate: 23.32 births/1,000 population (2005 est.)
Death rate: 5.26 deaths/1,000 population (2005 est.)
3-28
Mattel Markets in ChinaLittle emperors& six pocket syndrome
3-29
Population Age Groups
Preschool
School-age
Teens
25-40
40-65
65+
3-30
3-31
Household Patterns
3-32
Schwab’s Chinese-language Web site
3-33
Key Demographic Trends in U.S.
● By 2050 non-Hispanic whites will make up only about half of the population, down from 74% in 1995; and 69% in 2004
● Baby boomer generation is aging and losing interest in high-cost goods. Generation Y, rival them in size, will soon rival them in buying power.
● The single father household is the fastest growing living arrangement, which rose 62% in 10 years. Two-parent and single-mother households are still much more numerous
● Unprecedented demographic shift = married couple households slipped from 80% in 1950s to just over 50% in 2003. Couples with kids= 25%, with projection 20% by 2010 and 30% of homes inhabited by someone who lives alone.
ExerciseWhat are the consequences?
3-35
Economic Dimension● General economic health
●Consumer purchasing power
●Unemployment rate
● Interest rates
● Recent Trends
●Frequency of mergers and acquisitions
●Small business sector vitality
3-36
Economic Environment
$ Purchasing Power$ Income Distribution$ Savings Rate$ Debt$ Credit Availability
3-37
Types of Industrial Structures
Industrialeconomies
Subsistenceeconomies
Raw-material-exporting
economies
Industrializingeconomies
3-38
3-39
India – An Industrializing Economy
3-40
Saudi Arabia – A Raw-Material Exporting Economy
3-41
Banana Republic The Gap “look” is recognizable everywhereOld Navy
4.1 External EnvironmentA) Societal Environment
c- Economic
2002(a) 2003(a) 2004(a) 2005(a) 2006(a)
GDP at market prices (E£bn)
378.9 417.5 485.3 538.5 617.7
GDP (US$ bn)(b) 84.2 71.5 78.3 93.2 107.9
Real GDP growth (%)
3.0(c) 3.2 4.1 4.5 6.8
Consumer price inflation (av; %)
2.7 4.5 11.3 4.9 7.7
Population (m) 69.9 71.3 72.6 74.0 75.4(c)
Exports of goods fob (US$ m)
7,250 8,987 12,274 16,073 20,546
Imports of goods fob (US$ m)
-14,709 -15,156 -21,586 -27,200 -33,104
Current-account balance (US$ m)
849 3,723 3,237 2,207 2,731
Foreign-exchange reserves excl gold (US$ m)
13,242 13,589 14,273 20,609 24,462
Total external debt (US$ bn)
30.0 31.4 30.3 34.1 31.3(c)
Debt-service ratio, paid (%)
10.3 11.7 7.8 6.8 9.3(c)
Exchange rate (av) E£:US$
4.50 5.84 6.20 5.78 5.73
(a) Actual. (b) Data for fiscal year, which ends on June 30th. (c) Economist Intelligence Unit estimates.
4.1 External EnvironmentA) Societal Environment
c- Economic
Key indicators
2006 2007 2008 2009 2010 2011
Real GDP growth (%)
6.8 7.0 7.2 6.3 5.3 5.5
Consumer price inflation (av; %)
7.7 8.4 5.7 3.3 3.5 4.2
Budget balance (% of GDP)
-7.9 -5.5 -7.3 -6.5 -5.9 -5.3
Current-account balance (% of GDP)
2.3 1.2 1.2 1.7 2.1 2.7
Commercial banks' lending rate (av; %)
12.6 12.9 13.3 13.0 12.6 12.0
Exchange rate E£:US$ (av)
5.73 5.69 5.72 5.75 5.76 5.78
3-44
Political-legal Dimension
● Government Regulations
●Local
●State
●Federal
● Political Activities
● Pressure Groups
3-45
Political-Legal Environment
Increase in business legislation
Growth of specialinterest groups
3-46
Natural Environment
Shortage of raw materials
Increasedenergy costs
Anti-pollutionpressures
Governmentalprotections
3-47
Unit Pricing on Store Shelves
3-48
Variables in the Societal Environment
Economic Technological Political-Legal Socio cultural
GDP Trends
Interest Rates
Money supply
Inflation rates
Unemployment
Wage
Devaluation
Energy availability
& cost
Disposable & discretionary income
Total Gov. spending for R&D
Industry spending
Focus of tech. efforts
Patent protection
New products
New technology
Productivity improvement through automation
Antitrust regulations
Env. protection law
Tax laws
Special incentives
Foreign trade reg.
Attitude towards foreign companies
Laws on hiring & promotion
Stability of government
Lifestyle changes
Career expectations
Rate of family formation
Growth rate of population
Age distribution
Regional shifts
Life expectancies
Birth rate
3-49
Task Environment
Sectors that have a direct working relationship with the organization
●Customers
●Competitors
●Suppliers
●Labor Market
3-50
Labor Market Forces
Labor Market Forces Affecting Organizations today
● Growing need for computer literate information technology workers
● Necessity for ongoing investment in human resources – recruitment, education, training
● Effects of international trading blocks, automation, outsourcing, shifting facility locations upon labor dislocations
3-51
External Environment and Uncertainty
Number of Factors in Organization Environment
Adapt toEnvironmentHigh
Uncertainty
LowUncertainty
HighLowLow
High
Rate ofChange inFactors in
Environment
3-52
3-53
Adapting to the Environment
Boundary-spanning Inter-organizational
partnerships Mergers or joint ventures
3-54
Boundary Spanning & Competitive Intelligence - CI
• What - Activities to get as much information as possible about one’s rivals
• Where - Web sites, commercial databases, financial reports, market activities, news clippings, trade publications, personal contacts
• Why – Spot potential threats or opportunities
3-55
Interorganizational Partnerships
• Adversarial Orientation
● Suspicion, competition, arm’s length
● Price, efficiency, own profits
● Lawsuits to resolve conflicts
● Close coordination; virtual teams and people on site
● Minimal involvement and up-front investment
● Short-term contracts● Contracts limit the
relationship
• Partnership Orientation
● Trust, value added to both sides
● Equity, fair dealing, everyone profits
● E-business links to share information and conduct digital transactions
● Close coordination; virtual teams and people on site
● Involvement in partner’s product design and production
● Long-term contracts● Business assistance goes
beyond the contract
3-56
Mergers& Joint Ventures
• Mergers
The combining of two or more organizations into one
• Joint Venture
A strategic alliance or program by two or more organizations
3-57
Marketing Debate
Take a position:
1. Age differences are fundamentally
more important than cohort effects.
2. Cohort effects can dominate age
differences.
3-58
Marketing Discussion
What brands do you feel successfully
speak to you? Effectively target your
age group? Why? Which ones do not?
3-59
Assignment # 2 (individuals) (16/11/2008)
• You are about to start up a hospital and in order to start your marketing plan you decided first to go for scanning both the general and task environments that might influence the health care industry.
3-60
THANK YOU
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