Marketing Management

Part : 02 Chapter-03
Capturing
Marketing
Insights

Gathering Information
and
Scanning the Environment

Marketing Manageme 1
 Marketing Information System (MIS)
 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.
 A Marketing Information System (MIS) is developed from
a. Internal Company Records
b. Marketing Intelligence
c. Marketing Research (will be discussed in the next chapter)

Marketing Manageme 2
 Marketing Information System (MIS)
a. Internal Company Records
 Internal Company Records include
i. The Order-to-Payment Cycle
ii. Sales Information Systems : Marketing managers need
timely and accurate reports on current sales. Wal-Mart, for
example knows the sales of each product by store and
total each evening.
iii. Databases : Today, companies organize their information
in databases-Customer Databases, Product Databases,
Salesperson Databases-and them combine data from the
different databases.
Datawarehousing : Collecting, Organizing and Storing of
current data in a company’s contact centre)
Datamining : The extracting of useful information from the
mass of data)
Marketing Manageme 3
 Marketing Information System (MIS)
b. The Marketing Intelligence System
 A Marketing Intelligence System is a set of procedures and
sources managers use to obtain everyday information about
developments in the marketing environment.
 Marketing Managers collect marketing intelligence by reading
books, newspapers and trade publications, through internet,
talking to customers, suppliers and distributors, and meeting
with other company managers.

Marketing Manageme 4
 Marketing Environment
 Marketing Environment is made-up of “Micro Environment”
and “Macro Environment”.

i. Micro (Task) Environment : The forces close to the company

that affect its ability to serve its customers, like its
employees, suppliers, distribution firms, customer markets,
competitors and publics.

ii. Macro (Broad) Environment : The larger societal forces that

affect the micro environment; i.e. Demographic, Political,
Economical, Social, Technological and Natural Environments.

Marketing Manageme 5
 Analyzing the Macro-environment
 We can draw distinctions among Fads, Trends and Mega-
Trends.

i. Fad : Unpredictable, short-lived and without social, economic

and political significance.

ii. Trend : A direction or sequence of events that has some

momentum and durability.

iii. Mega-trends : Large social, economic, political and

technological changes that are slow to form and once in
place, they influence us for sometime, between seven to ten
years or longer : See Marketing Insight on Page 74)

Marketing Manageme 6
 Major Macro-Environments

Demographic

Technological Natural

Major
Macro Environments

Social-Cultural Political

Economic

Marketing Manageme 7
 Major Macro-Environments
 The major macro-environments include the followings.

1. Demographic Environment
2. Natural (Physical) Environment
3. Political-Legal Environment
4. Economic Environment
5. Social-Cultural Environment
6. Technological Environment

Marketing Manageme 8
 Major Macro-Environments
1) The Demographic Environment
 “Demography” is the study of population. Marketers are keenly
interested in the following demographic factors.

a. Worldwide Population Growth

b. Population Age Mix (detail on next slide)
c. Ethnic and Other Markets (Countries vary in ethnic and racial
makeup. At one extreme is Japan, where almost everyone is
Japanese; at the other is the United States, where people
come from virtually all nations)
d. Educational Groups (Illiterates, High-School Dropouts, High-
School Diplomas, College Degrees and Professional Degrees)
e. Household Patterns
f. Geographical Shifts in Population
Marketing Manageme 9
 The Demographic Environment
b. Population Age Mix
 A population can be sub-divided into six age groups :
preschool, school- age children, teens, young adults age 25
to 40, middle-aged adults age 40-65, older adults age 65 and
up.
 For marketer, the most populous age groups shape the
marketing environment like the following generations.
 Baby Boomers : A generation of 78 million people born in US
between 1946 and 1964.
 Generation X : A generation of 45 million people born in US
between 1965 and 1976.
 Generation Y : A generation of 72 million people born in US
between 1977 and 1994.

Marketing Manageme 10
 The Demographic Environment
2) Natural Environment
 The deterioration of natural environment is a major global
concern.
 Marketers need to be aware of the threats and opportunities
associated with four trends in the natural/physical
environment.
 Shortage of Raw Materials (Infinite Resources : such as air
and water are becoming a problem, Finite Renewable
Resources : such as forests and food must be used wisely,
Finite Non-renewable Resources : oil, coal, zinc etc. will pose
a serious problem as the point of depletion approaches).
 Increased Energy Costs
 Anti-Pollution Pressures
 Changing Role of Governments : Governments vary in their
concern and efforts to promote a clean environment.
Marketing Manageme 11
 The Demographic Environment
2) Natural Environment

3M runs a Pollution Prevention Pays program that has

led to a substantial reduction in pollution and costs

Marketing Manageme 12
 Major Macro-Environments
2) Natural Environment

 Green Marketing : Marketing activities beneficial to the

physical/natural environment.

Marketing Manageme 13
 Major Macro-Environments
PEST Factors

Marketing Manageme 14
 Major Macro-Environments
3) Political-Legal Environment
 Marketing decisions are strongly affected by developments in
the political and legal environment. This environment is
composed of the followings.
 Increase in Business Legislation : Its purpose is to protect
companies from unfair competition, to protect consumers from
unfair business practices, and to protect the interests of
society from unbridled business behaviour)
 Growth of Special-Interest Groups : The number and power of
special-interest groups have increased over the past three
decades. Many companies have established public affairs
departments to deal with these groups and issues. New laws
and growing numbers of pressure groups have put more
restraints on marketers.
Marketing Manageme 15
 Major Macro-Environments
3) Political-Legal Environment
 Consumerist Movement : An important force affecting
business is the ‘Consumerist Movement’-which is an
organized movement of citizens and government to
strengthen the rights and powers of buyers in relation to
sellers.

Marketing Manageme 16
 Major Macro-Environments
4) Economic Environment
 Markets require purchasing power as well as people. The
available purchasing power is an economy depends on
current income, prices, savings, debt, and credit
availability.
 Marketers must pay full attention to trends affecting
purchasing power because they can have a strong impact
on business, especially for companies whose products are
geared to high income and price-sensitive consumers.

Marketing Manageme 17
 Major Macro-Environments
4) Economic Environment
 Income Distribution (Four types of Industrial
Structures : Subsistence, Raw Material Exporting,
Industrializing and Industrial Economies) (Marketers often
distinguish countries with five different 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)
 Savings, Debt and Credit Availability
 Outsourcing and Free Trade

Marketing Manageme 18
 Major Macro-Environments
4) Economic Environment
 GAP pursues a segmented marketing strategy with three
tiers of retail clothing stores : The upscale ‘Banana
Republic’, the mid market ‘GAP’, and the budget-priced
‘Old Navy’.
 This segmented strategy helped GAP grow from a $7
billion to a $14 billion business between 1996 and 2003.

Marketing Manageme 19
 Major Macro-Environments
4) Economic Environment

GAP pursues a segmented marketing strategy

Marketing Manageme 20
 Major Macro-Environments
5) Social-Cultural Environment
 The society shapes the beliefs, values and norms that largely
define the tastes and preferences of people.
 Here are some cultural characteristics of interest to
marketers.
 High Persistence of Core Cultural Values (Core Beliefs,
Secondary Beliefs) (See Next Slide for detail)
 Existence of Subcultures (Each society contains subcultures.
Members of subcultures share common beliefs, preferences
and behaviours)
 Shifts of Secondary Cultural Values Through Time (The
cultural swings do take place, especially secondary cultural
values, like celebrities has a major impact on young people’s
hairstyles, clothing etc.)

Marketing Manageme 21
 Major Macro-Environments
5) Social-Cultural Environment
 Core Beliefs : Core Beliefs and values tend to persist. They
are passed on from parents to children and are reinforced
by major social institutions-schools, mosques, businesses,
and governments.
 Secondary Beliefs : Secondary Beliefs and values are more
open to change.
 Example : Believing in institution of marriage is a core
belief; believing that people ought to get married early is a
secondary belief.
 Note : Marketers have some chance of changing secondary
values but little chance of changing core values.

Marketing Manageme 22
 Major Macro-Environments
6) Technological Environment
 One of the most dramatic forces shaping people’s lives is
technology. Therefore, the marketers should monitor the
following trends in technology.
 Accelerating Pace of Change
 Unlimited Opportunities for Innovation
 Varying R&D Budgets
 Increased Regulation of Technological Change

Marketing Manageme 23
 Activity

Marketing Manageme 24