Marketing: Capturing Marketing Insights

PART 2 | CAPTURING
MARKETING INSIGHTS

CHAPTER 3 | GATHERING
INFORMATIONANDSCANNINGTHE
ENVIRONMENT

CHAPTER 3 | OBJECTIVES
 What are the components of a modern marketing
information system?
 What are useful internal records?
 What is involved in a marketing intelligence system?
 What are the key methods for tracking and identifying
opportunities in the macroenvironment?
 What are some important macroenvironment
developments?

COMPONENTSOFA
MODERNMARKETING
INFORMATIONSYSTEM

1. THEY HAVE A DISCIPLINED METHODS
FOR COLLECTING INFORMATION.
2. THEY SPEND MORE TIME INTERACTING
WITH THE CUSTOMERS AND OBSERVING
COMPETITION.
MARKETERSHAVETWO
ADVANTAGES:

PROCEDURE
AMARKETINGINFORMATION
SYSTEM(MIS)CONSISTOF:
PEOPLE
EQUIPMENT

IN(MIS)THEPROCEDURESAIMIS
TO:
1.GATHER THE DATA
2.SORT THE DATA
3.ANALYZE THE DATA
4.EVALUATE THE DATA
5.DISTRIBUTE ACCURATE DATA

INTERNALRECORDS
AND MARKETING
INTELLIGENCE

MARKETING MANAGERS RELY ON
INTERNAL REPORTS:
• SALES
• PRICES
• COSTS
• INVENTORY LEVELS
• RECEIVABLES
• PAYABLES

THE ORDER-TO-PAYMENT CYCLE
• THE HEART OF THE INTERNAL RECORDS
SYSTEM.
• SALES REPRESENTATIVES, DEALERS
AND CUTOMER SEND ORDERS TO THE
FIRM.

• TODAY’S COMPANIES NEED TO
PERFORM THESE STEPS QUICKLY
AND ACCURATELY.
• AN INCREASING NUMBER OF
COMPANIES ARE USING THE
INTERNET TO IMPROVE THE SPEED,
ACCURACY AND EFFICIENCY OF THE
ORDER TO PAYMET CYCLE.

SALES INFORMATION SYSTEMS
• MARKETING MANAGERS NEED
TIMELY AND ACCURATE REPORTS
ON CURRENT SALES.

DATABASES, DATA WAREHOUSING AND
DATA MINING
• TODAY’S COMPANIES ORGANIZE THEIR
INFORMATION IN DATABASES:
1. CUSTOMER DATABASES
2. PRODUCT DATABASES
3. SALESPERSON DATABASES

It is a set of procedures and
sources managers use to obtain
everyday information about
developments in the marketing
environment.
MARKETING INTELLIGENCE
SYSTEM

• THE INTERNAL RECORDS SYSTEM
SUPPLIES RESULTS DATA
• BUT, THE MARKETING INTELLIGENCE
SYSTEM SUPPLIES HAPPENING DATA
MARKETING INTELLIGENCE
SYSTEM

ACOMPANYCANTAKESEVERALSTEPSTO
IMPROVETHEQUALITYOFITSMARKETING
INTELLIGENCE:
• A COMPANY CAN TRAIN AND MOTIVATE THE
SALES FORCE TO SPOT AND REPORT NEW
DEVELOPMENTS.
• A COMPANY CAN MOTIVATE DISTRIBUTORS,
RETAILERS AND OTHER INTERMEDIARIES TO
PASS ALONG IMPORTANT INTELLIGENCE.
• A COMPANY CAN NETWORK EXTERNALLY.

• COMPANY CAN SET UP A CUSTOMER
ADVISORY PANEL.
• A COMPANY CAN TAKE ADVANTAGE OF
GOVERNMENT DATA RESOURCES.
• A COMPANY CAN PURCHASE INFORMATION
FROM OUTSIDE SUPPLIERS.
• A COMPANY CAN USE ONLINE CUSTOMER
FEELINGS SYSTEMS TO COLLECT
COMPETITIVE INTELLIGENCE.

Analyzing the
MACROENVIRONMENT

MACROENVIRONMENT
The conditions that exist in the economy as a
whole, rather than in a particular sector or
region.
In general, the macro environment will include
trends in gross domestic product (GDP),
inflation, employment, spending, and monetary
and fiscal policy.

4 Main Ways Marketers can Find Relevant Online
Information on Competitor’s Product:
I. Independent customer Goods and
Service Review Forums
II. Distributor or Sales Agent Feedback Sites
III.Combo-sites Offering Customer Reviews
and Expert opinions
IV.Customer Complaint Sites

Independent Customer Goods
and Service Review Forums
Include well-known website such as
Epinions.com, Bizrate.com, these sites
havve the advantage of being independent
from the goods and service providers, which
may reduce bias

Distributor or Sales Agent
Feedback Sites
These sites offer both positive and
negative product or service reviews
but the stores or distributors have
built the sites themselves.

This type of site is concentrated in financial
services and high-tech products that require
professional knowledge, the advantage of this
type of review site lies in the fact that a product
supplier can compare opinions from the experts
with those of the consumers.
Combo-sites Offering Customer
Reviews and Expert opinions

These forums are designed mainly for
dissatisfied customers. Some websites offer a
complaining forum with a moderator.
 Planetfeedback.com allows customers to
voice unfavorable experiences with specific
companies.
Customer Complaint Sites

FAD
Unpredictable, short-lived, and
without social, economic and
political significance.
TREND
Unpredictable, short-lived, and
without social, economic and
political significance.

Described as “large social,
economic, political and
technological changes that are slow
to form, and once in place, they
influence us for some time ---
between seven and ten years, or
longer
MEGATRENDS

10 Megatrends Shaping the
Consumer Landscape
Aging Boomers
Delayed Retirement
The Changing Nature of Work
Greater Educational
Attainment
Labor Shortages

Increased Immigration
Rising Hispanic Influence
Shifting Birth Trends
Widening Geographic Differences
Changing Age Culture

Identifying the Major Forces
 The substantial speedup of
international transportation,
communication, and financial
transactions
 The movement of manufacturing
ccapacity and skill to lower-cost
countries

The rise of trade blocs such as the
European Union and the NAFTA
signatories
The severe debt problems of a number
of countries, along with the incresing
fragility of the international financial
system
The increasing use of barter and
countertrade to support international
transactions

The move toward market
economies in formerly socialist
countries along with rapid
privatization of publicly owned
companies
The rapid diddemination of
global lifestyles

The development of emerging markets
(China, India, Eatern Europe, the Arab
countries, and Latin America)
The increasing tendency of
multinationals to transcend locational
and national characteristics and
become transnational firms

• The main demographic force that marketers
monitor is population, because people make
up markets.
• Marketers are keenly interested in the size
and growth rate of population in cities,
regions, and nations; age distribution and
ethnic mix; educational levels; household
patterns; and regional characteristics and
movements.

WORLDIDE POPULATION
GROWTH
• The world population is showing explosive
growth: It totaled 6.1 billion in 2000 and will
exceed 7.9 billion by the year 2025.
• The population explosion has been a source of
major concern. Unchecked population growth
and consumption could eventually result in
insufficient food supply, depletion of key
minerals, overcrowding, pollution, and an overall
deterioration in the quality of life.

• Explosive population growth has major
implications for business. A growing
population does not mean growing markets
unless these markets have sufficient
purchasing power. Nonetheless, companies
that carefully analyze their markets can find
major opportunities.

POPULATION AGE MIX
• A population can be subdivided into six age
groups: preschool, school-age children,
teens, young adults age 25 to 40, middle-
aged adults age 40 to 65, and older adults
age 65 and up. For marketers, the most
populous age groups shape the marketing
environment.

ETHNIC AND OTHER MARKETS
• According to the 2000 census, the U.S. population of
276.2 million was 72% white. African Americans
constituted 13%, and Latinos 11 percent. The Latino
population had been growing fast, with the largest
subgroups of Mexican (5.4%), Puerto Rican (1.1%),
and Cuban (0.4%)descent. Asian Americans
constituted 3.8% of the U.S. population, with the
Chinese as the largest group, followed by the
Filipinos, Japanese, Asian Indians, and Koreans, in
that order.

• Latino and Asian American consumers are
concentrated in the far western and southern
parts of the country, although some dispersal
is taking place. Moreover, there were nearly
25 million people living in the United States—
more than 9 percent of the population—who
were born in another country.

• Procter & Gamble.
In 2000 the company set up a 65-person
bilingual team to better target Latino
consumers. Now the company tailors its
products to appeal to Latino tastes. For
example, it added a third scent to its Gain
detergent called "White Water Fresh" after
finding that 57% of Latinos like to smell their
purchases.

• Kroger.
The nation's number-one grocery chain spent
$1.8 million to convert its 59,000 square-foot
Houston store into a Supennercado with
Spanish-language signage and products such
as plantain leaves and Mexican cocoa. The
company has also expanded its private-label
Buena Comida line to 105 different items.

• PacifiCare Health Systems.
When this Cypress, California-based insurance
company found that 20 percent of its 3 million
policyholders are Hispanic, it set up a new unit,
Latino Health Solutions. The unit markets
PacifiCare health insurance products in
Spanish, directs Hispanics to Spanish-speaking
doctors, and translates documents into Spanish
for Hispanic workers.

• Ethnic groups have certain specific wants and
buying habits. Several food, clothing, and
furniture companies have directed their
products and promotions to one or more of
these groups.27 Charles Schwab is one of the
leading financial services firms serving Asian
Americans with a carefully targeted marketing
program.28

• Yet marketers must be careful not to overgeneralize
about ethnic groups. Within each ethnic group are
consumers who are quite different from each other.
"There is really no such thing as an Asian market,"
says Greg Macabenta, whose ethnic advertising
agency specializes in the Filipino market.
Macabenta emphasizes that the five major Asian
American groups have their own very specific
market characteristics, speak different languages,
consume different cuisines, practice different
religions, and represent very distinct national
cultures.

EDUCATIONAL GROUPS
• The population in any society falls into five
educational groups: illiterates, high school
dropouts, high school diplomas, college
degrees, and professional degrees.

HOUSEHOLD PATTERNS
• Married couple households—the dominant
cohort since the formation of the United
States—have slipped from nearly 80 percent
in the 1950s to around 50 percent today.
Americans are delaying marriage longer than
ever, cohabiting in greater numbers, forming
more same-sex partnerships, living far longer,
and remarrying less after splitting up.

• By 2010, nearly 30 percent of homes will be
inhabited by someone who lives alone. A record
number of children—33 percent—are now born to
single parents, many of them underem- ployed
mothers. But singles can also have much buying
power and spend more on themselves than those
who live in larger households. Products such as the
George Foreman grill that target people who live
alone and value convenience can be successful.

Geographical Shifts in Population
• This is a period of great migratory movements
between and within countries. Forward-looking
companies and entrepreneurs are taking advantage
of the growth in immigrant populations and
marketing their wares specifically to these new
members of the population.

OTHER MAJOR
MACROENVIRONMENTS
• Other macroenvironment forces profoundly
affect the fortunes of marketers. Mere we
review developments in the economic,
social-cultural, natural, technological, and
political-legal environments.

ECONOMIC ENVIRONMENT
• Markets require purchasing power as well as
people. The available purchasing power in an
economy depends on current income, prices,
savings, debt, and credit availability.

• Marketers must pay careful 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.

• INCOME DISTRIBUTION
• SAVINGS, DEBT AND CREDIT
AVAILABILITY
• OUTSOURCING AND FREE TRADE

INCOME DISTRIBUTION
• Nations vary greatly in level and distribution of income
and industrial structure. There are four types of industrial
structures: subsistence economies (few opportunities
for marketers); raw-material-exporting economies like
Zaire (copper) and Saudi Arabia (oil), with good markets
for equipment, tools, supplies, and luxury goods for the
rich; industrializing economies, like India, Egypt, and the
Philippines, where a new rich class and a growing middle
class demand new types of goods; and industrial
economies, which are rich markets for all sorts of goods.

• 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; and (5) mostly medium
incomes.

SAVINGS, DEBT, AND CREDIT
AVAILABILITY
OUTSOURCING AND
FREE TRADE

Social-Cultural Environment
Purchasing power is directed toward certain goods and
services and away from others according to people's
tastes and preferences. Society shapes the beliefs,
values, and norms that largely define these tastes and
preferences. People absorb, almost unconsciously, a
worldview that defines their relationships to themselves,
to others, to organizations, to society, to nature, and to
the universe.

• Views of themselves
People vary in the relative emphasis they place
on self-gratification. In the United States during
the 1960s and 1970s, "pleasure seekers"
sought fun, change, and escape. Others sought
"self-realization." People bought dream cars and
dream vacations and spent more time in health
activities (jogging, tennis), in introspection, and
in arts and crafts.

• Views of others
People are concerned about the homeless,
crime and victims, and other social problems.
They would like to live in a more humane
society. At the same time, people are seeking
out their "own kind" and avoiding strangers.
They hunger for serious and long- lasting
relationships with a few others.

• Views of organizations.
People vary in their attitudes toward
corporations, government agencies, trade
unions, and other organizations. Most
people are willing to work for these
organizations, but there has been an
overall decline in organizational loyalty.

• Views of society.
• People vary in their attitudes toward their society. Some
defend it (preservers), some run it (makers), some take
what they can from it (takers), some want to change it
(changers), some are looking for something deeper
(seekers), and some want to leave it (escapers).
• Consumption patterns often reflect social attitude.
Makers tend to be high achievers who eat, dress, and
live well. Changers usually live more frugally, drive
smaller cars, and wear simpler clothes. Escapers and
seekers are a major market for movies, music, surfing,
and camping.

• Views of nature.
People vary in their attitudes toward nature. Some feel
subjugated by it, others feel in harmony with it, and
still others seek mastery over it. A long-term trend has
been humankind's growing mastery of nature through
technology. More recently, however, people have
awakened to nature's fragility and finite resources.
They recognize that nature can be destroyed by
human activities.

• Views of the universe.
People vary in their beliefs about the origin of the
universe and their place in it.

Here are some other cultural
characteristics of interest to marketers: the
persistence of core cultural values, the
existence of subcultures, and shifts of
values through time.

• Marketers need to be aware of the threats and
opportunities associated with four trends in
the natural environment: the shortage of raw
materials, especially water; the increased
cost of energy; increased pollution levels;
and the changing role of governments.

1. Infinite resources, such as air and
water, are becoming a problem.
Water shortages are already a
political issue, and the danger is no
longer long term.
SHORTAGE OF RAW MATERIALS

2. Finite renewable resources, such as
forests and food, must be used wisely.
Forestry companies are required to
reforest timberlands in order to protect
the soil and to ensure sufficient wood to
meet future demand.

3. Finite non-renewable resources—
oil, coal, platinum, zinc, silver—will
pose a serious problem as the point
of depletion approaches.

• Some industrial activity will inevitably damage
the natural environment. Consider the
dangerous mercury levels in the ocean, the
quantity of DDT and other chemical pollutants
in the soil and food supply, and the littering of
the environment with bottles, plastics, and
other packaging materials.
ANTI-POLLUTION
PRESSURES

• The marketers should monitor the
following trends in technology: the
pace of change, the opportunities
for innovation, varying R&D
budgets, and increased regulation.

ACCELERATING PACE OF
CHANGE
UNLIMITED OPPORTUNITIES
FOR INNOVATION
VARYING R&D BUDGETS
INCREASED REGULATION OF
TECHNOLOGICAL CHANGE

• Marketing decisions are strongly affected by
developments in the political and legal
environment. This environment is composed
of laws, government agencies, and pressure
groups that influence and limit various
organizations and individuals. Sometimes
these laws also create new opportunities for
business.

• Two major trends deal with
the increase in business
legislation and the growth of
special interest groups.

Marketing: Capturing Marketing Insights

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