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