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The Marketing Environment
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Includes: Microenvironment: actors close to the
company that affect its ability to serve itscustomers.
Macroenvironment: larger societal forces thataffect the microenvironment.
Considered to be beyond the control of theorganization.
Marketing Environment
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Actors in the Microenvironment
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Suppliers: Provide resources
needed to producegoods and services.
Important link in thevalue deliverysystem.
Most marketers treatsuppliers like partners.
The Companys Microenvironment
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The Companys Microenvironment
Marketing Intermediaries: Help the company to promote, sell, and distribute
its goods to final buyers Resellers Physical distribution firms
Marketing services agencies Financial intermediaries
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5 Types of Customers
Consumer markets Business markets (B to B)
Reseller markets Government markets International markets
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Competitors
Must understand competitors strengths Must differentiate firms products and
offerings from those of competitors Competitive strategies should emphasize
firms distinctive competitive advantage in
marketplace
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The Macro environment
The company and all of the other actorsoperate in a larger macro environment of
forces that shape opportunities and posethreats to the company.
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The Companys Macroenvironment
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Economic Environment
Consists of factors that affect consumerpurchasing power and spending patterns.
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Natural Environment
Involves the natural resourcesthat are needed as inputs bymarketers or that are affectedby marketing activities.
Green marketing initiatives,environmental friendlyproducts, pollution controlmeasures, biodegradability ofproducts like soaps
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Technological Environment
Mostdramaticforce nowshaping our
destiny.
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Cultural Environment
The institutionsand other forces
that affect asocietys basicvalues,
perceptions,preference, andbehaviors.
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Political Environment
Includes Laws,GovernmentAgencies, and
Pressure Groupsthat Influence orLimit VariousOrganizations andIndividuals In aGiven Society.
Increasing Legislation
Changing GovernmentAgency Enforcement
Increased Emphasis on Ethics& Socially Responsible Actions
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Marketing Information SystemMarketers must be trend trackers
and opportunity seekers.
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MIS consists of people, eqipment,andprocedures to gather, sort, analyze, evaluateand distribute needed,timely,and accurate
information to marketing decision makers. MIS developed from internal company records,
marketing intelligence activities and marketingresearch.
It should be a cross between what managersthink they need, what managers really need andwhat is economically feasible.
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Speed , accuracy and efficiency ofthe order to payment cycle.
Customers fax or e-mail their orders.
Computerized warehouses fill orders. Billing Dept. sends out invoices as quickly
as possible
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Database
Customer database Product database
Salesperson database Combination of data from all database
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E.g. Customer database will contain-customers name, address past
transaction, demographics andpsychographics (activities, interests,
opinions)
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Data Warehousing and Data Mining
Warehouse data and make them easilyaccessible to decision makers.
Analysts mine the data and garner freshinsights into neglected customersegments, recent customer trends and
other useful information.
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Data Mining
Data mining is the process of discoveringactionable information from large sets of
data. Data mining uses mathematicalanalysis to derive patterns and trends thatexist in data.
These patterns and trends can becollected and defined as a data miningmodel.
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Data Mining
Mining models can be applied to specificbusiness scenarios, such as:
Forecasting sales
Targeting mailings toward specific
customers
Determining which products are likely to
be sold together
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Finding sequences in the order thatcustomers add products to a shopping cart
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This process can be defined by using thefollowing six basic steps:
Defining Problem
Preparing Data Exploring Data Building Models Exploring and validating models Deploying and updating models
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Marketing Intelligence System
A set of procedures and sourcesmanagers use to obtain everyday
information about developments in themarketing environment.
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Steps to improve the quality of its marketingintelligence
A company can train and motivate thesales force to spot and report new
development.A company can motivate distributors,
retailers and other intermediaries to pass
along important intelligence .
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A company can network externally bypurchasing competitors product, attend trade
show etc. Company can set up a customer advisory panel. A company can take advantage of government
data resources.
A company can purchase information fromoutside suppliers like market research firms.
A company can use online customer feedback
system to collect competitive intelligence.
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Market Research&
Sales Forecasting
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Market Research System
Market research is research into a specificmarket.
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Marketing Research System
Systematic design ,collection, analysis andreporting of data and findings relevant to
a specific marketing situation .
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The Marketing Research Process
Step 1: Define the problem and theresearch objective.
Step 2: Develop research plan Step 3:Collect the information Step 4: Analyze the information
Step 5: Present the findings Step 6: Make a decision
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What to find out?
What does the customer need? Who is the target audience and how much
can you find out about them? What is the competition?Are there any gaps in the market?
Would the product be acceptable in themarket?
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Do I need Market Research?
Yes. Provided I know what I want.
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The MR Process
What is the Marketing Problem? What is the Research Problem?
Developing the Research Plan Research Approach Research Instruments
Collecting the Information Analysing the information Presentation of findings
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Data sources
Reference Library Directories of Products/Companies
Industry/Trade Journals Trade fairs and Exhibitions Company Annual Reports Internet
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Forecasting and DemandMeasurement
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Sales Forecasting - Why is itnecessary?
To raise the necessary cash for investmentand operations
to establish capacity and output levels to acquire and stock the right amount of
supplies
to hire the required number of people
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The Measures of MarketDemand
Demand can be measured for
i. Six different product levels,
ii. Five different space levels,iii. Three different time levelsCompanies can prepare as many as 90
different types of demand estimates
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Space level
Product
level
All sales
Industry sales
Company sales
Product line sales
Product formsales
Product item sales
Short run Medium
run
Long
run
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Forecast depend upon type ofmarket
Market
A set of all actual and potential buyers ofa product or service
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Potential Market
A set of consumers who profess asufficient level of interest in a product or
service
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Available Market
A set of consumers who have interest ,income and access to a particular product
or service
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Qualified Available Market
A set of consumers who have interest,income, access and qualifications for the
particular product or service.
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Target Market
Part of the qualified available market thecompany decides to pursue
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Penetrated Market
A set of consumers who are buying thecompanys product or service
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The major concepts in DemandMeasurement are
1. Market Demand2. Company Demand
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Market Demand
Total volume that would be bought by adefined-----
customer group geographical area
time period marketing environment marketing program
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Market Potential
An upper limit of market demand as aresult of marketing expenditure in a given
marketing environment. E.g. In the period of recession and in the
period of prosperity.
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Market Forecast
Market demand corresponding to theindustry marketing expenditure
This would be lower than the marketpotential
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Company Demand
Estimated share of market demand atalternative levels of company marketing
effort in a given time period
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Company Sales Forecast
Expected level of company sales based ona chosen marketing plan and an assumed
marketing environment.
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Total Market Potential
TMP =Potential No. of buyers *Average quantitypurchased by buyer *price
It is a maximum amount of sales that might be available toall the firms in an industry during a given period, undera given level if industry marketing effort andenvironmental conditions.
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Area Market Potential
Market potential of different districts,towns,cities,states and nations.
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Sales forecasting Methods
Survey of buyers intention Composite of sales force opinions
Expert opinion Past sales analysis Market test method