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fundamentals of marketing chap3

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imed ben nasr

on 16 January 2013

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Transcript of fundamentals of marketing chap3

Chapter 3 Understanding the Marketing Environment Chapter Objectives: Marketing environment :
The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. Microenvironment :
The actors close to the company that affect its ability to serve its customers – the company, suppliers, marketing intermediaries, customer markets, competitors, and public. Macroenvironment:
The larger societal forces that affect the microenvironment – demographic, economic, natural, technological, political, and cultural forces. Suppliers :
Are those providing the resources needed by the company to produce its goods and services.
They play a key role in the success of the firm’s marketing. They are, at some way, a clients of the company that must be treated as partners in creating and delivering customer value. Competitors :
Represent companies that propose competing products and services for the company.
We can define two types of competitors :
Direct competitors : Those offering the same products as those of the company.
Example: Apple, Nokia, Samsung.
Indirect competitors : Those offering products that replace the company’s products.
Example: Tomtom, Mappy, Eklaireur. Marketing intermediaries :
Firms that help the company to promote, sell, and distribute its goods to final buyers. They include :
Resellers : Are distribution channel firms that help the company find customers or make sales to them.
Physical distribution firms: help the company stock and move goods form their points of origin to their destinations.
Marketing services agencies: Are the marketing research firms, advertising agencies, media firms consulting firms that help the company target the right markets.
Financial intermediaries: include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure products. Publics :
Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives :
- Financial public: banks, analysts, stakeholders….
- Media public: includes newspapers, magazines, television stations, blogs, social media…
- Citizen-action public : consumer organizations, environmental groups, minority groups….
- Local and General public.
- Internal public : company managers, workers, volunteers… Customers :
The aim of the entire value delivery network is to serve target customers and create strong relationships with them.
- 5 types of customer markets may be targeted :
- Consumer markets : Represent individuals and households that buy goods and services for personal consumption.
- Business markets : are those buying goods and services for further processing or use in their production processes.
- Reseller markets : represent companies that buy goods and services to resell at a profit.
- Government markets : are government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.
- International markets : consist of those buyers in other countries. Exercise :
You are the marketing manager of a well-known company (you have to choose it).
→ Defines your competitors, suppliers, customers, public and Marketing intermediaries.
You can use internet to get information to respond to the question.
→ 20 minutes to respond to the question
→ You can use PowerPoint to present your results. The demographic environment :
It represents the population characteristics (size, density, location, age, gender, race, education, occupation, origins, diversity….).
The analyze of these data determines the demographic trends of the population and their short-term and long-term consequences in the company’s activity (offer, marketing)
In France, the INSEE Institute delivers such information concerning the French population. The economic environment:
It consists of economic factors that affect consumer purchasing power and spending patterns.
The economic factors concerns the characteristics of the local and/or national economy (industrial, subsistence or developing economy), the main actors and contributors of the economy, its standard of living, the income distribution, the consumers global spending... The natural environment :
It represents the resources needed as inputs in product’s or service’s elaboration or that are affected by marketing activities.
They include:
The natural resources
The impacts of the company activity on the nature.
The global demand and offer of some natural resources…. The technological environment:
It’s the forces that create new technologies, creating new product and market opportunities.
Generally, we distinguish between two types of innovations:
Incremental innovation :
Disruptive innovation:
→ The company must be aware of the main technological innovations and their impacts on their activities and offers. The Political and Social Environment:
It consists in Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society.
Legislation is always changing. It could represent a threat or an opportunity to the company’s Marketing helping it creating new markets or leaving them.
Example :
The legislation related to Breathalyzer.
→ Could you give an example of a recent law that had an impact on a specific company activities. The cultural environment :
It represents Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. Section 1
Environment Analysis Steps in the Marketing Research Process Define the research problem :
This step aims to define what information managers need. It has three components :
Specify the research objectives:
→ What questions will the research attempt to answer?
Identify the consumer population of interest:
→ What are the characteristics of the consumer group(s) of interest?
Place the problem in an environment context:
→ What factors in the firm’s internal and external business environment might influence the situation? Exploratory Research:
A technique that marketers use to study, analyze and explore a new, not well-known phenomenon.

For example :
What say my customers about my brand on Facebook? Descriptive Research:
A tool that probes more systematically into the problem and bases its conclusions on large numbers of observations.
Results are generally expressed in quantitative terms- averages, percentages, or other studies that result from a large set of measurements.
For example :
What are the demographic and psychographic characteristics of our customers? Choose the method to collect the primary data :
At this stage, the marketer determines which survey methods are most appropriate depending on the characteristics of the research problem.

Different methods are available:
Mail questionnaires
Telephone interviews
Face-to-face interviews
Online questionnaires
Personal observation
Unobtrusive measures
Mechanical observation
Because of the high cost of data collection, marketers collect most of their data from a small proportion or sample of the population of interest. Based on the answers from this sample, marketers generalize to the larger population.
Two main methods of sampling exist: Probability and non probability sampling. Analyze and interpret the data Prepare the research report , Can obtain information that people are unwilling or unable to provide
Cannot be used to observe feelings, attitudes, and motives, and long-term or infrequent behaviors Observational Research Kraft Canada sent out high-level executives to observe actual family life in diverse Canadian homes. Videos of their experiences helped marketers and others across the company to understand the role Kraft’s brands play in people’s lives Ethnographic Research To better understand the challenges faced by elderly shoppers, this Kimberly-Clark executive tries to shop while wearing vision-impairment glasses and bulky gloves that simulate arthritis By entering the customer’s world, ethnographers can scrutinize how customers think and feel as it relates to their products Ethnographic Research , Pros
Large amounts of information at a relatively low cost per respondent
Enables more honest responses than interviews
Absence of interviewer bias
Inflexible, low response rate
Researcher has little control over sample Contact Methods – Mail Questionnaires , Pros
Gathers information fast, high response rate
Allows greater flexibility than mail surveys
Strong sample control
Higher costs than mail questionnaires
Interviewer may bias results
Limited quantity of data can be collected Contact Methods - Telephone Interviewing , , Pros
Highly flexible method that can gather a great deal of data from a respondent
Good control of sample, speed of data collection, and response rate
High cost per respondent
Subject to interviewer bias Contact Methods – Personal Interviewing Lexus general manager Mark Templin hosts “An Evening with Lexus” dinners with luxury car buyers to figure out why they did or didn’t become Lexus owners Involve inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization Focus Groups , Pros
Speed and low costs
Lowest cost per respondent of all contact methods; offers excellent sample control
Good flexibility and response rate due to interactivity
Difficulty in controlling sample Contact Methods – Online Marketing Research Thanks to survey services such as Zoomerang, almost any business, large or small, can create, publish, and distribute its own custom surveys in minutes , The Internet is well suited to quantitative research
Its low cost puts online research well within the reach of almost any business, large or small Contact Methods – Online Marketing Research Channel M2 “puts the human touch back into online research” by assembling focus group participants in people-friendly “virtual interview rooms” Gathering a small group of people online with a trained moderator to chat about a product, service, or organization and gain qualitative insights about consumer attitudes and behavior Online Focus Groups Mechanical devices
People meters, checkout scanners, neuromarketing Mechanical Devices Mechanical instruments , To find out what ads work and why, Disney researchers use an array of devices to track eye movement, monitor heart rates, and measure other physical responses Traditional Survey Methods Online Survey Methods Observational Methods Micro-environment component Macro-environment component Method of Marketing Analysis Method of Marketing Analysis Section 2
Tools of Environment and Market Analysis Section 3
Doing Marketing Research Marketing research provides accurate, up-to-date, and relevant information
Marketing research should be conducted in an ethical manner
Marketing information systems:
Determine what information marketing managers need, then gathers, sorts, analyzes, stores, and distributes information to system users Knowledge Is Power Marketing information systems (MIS) include multiple components:
Internal company data
Marketing intelligence
Marketing research
Acquired database
Computer hardware and software
Information for marketing decisions Marketing Information Systems Internal data:
Information from within the company
Used to produce reports on the results of sales and marketing activities
Commonly accessed via Intranets
Internal corporate communications network that links company departments, employees, and databases Internal Company Data Marketing intelligence systems
Method that marketers use to gather information about everyday happenings in the marketing environment
Gathered via monitoring everyday sources, observation, and discussions with salespeople or others. Marketing Intelligence Market research:
Collecting, analyzing, and interpreting data about customers, competitors, and the business environment to improve marketing effectiveness
Syndicated research
Custom research Marketing Research The Marketing Information System A good MIS balances the information users would like against what they really need
Collecting and storing information using a MIS is expensive
Firms must decide whether the value of the insights gained from more information is worth the cost Assessing Information Needs External databases can be used to collect a variety of information from different sources:
Non-competing businesses
Government databases
Misuse of databases can be problematic and has led to do-not-call lists and anti-spam laws Acquired Databases Sources of MIS A process that first determines what information marketing managers need and then gathers, sorts, analyzes, stores, and distributes relevant and timely marketing information to system users.

A firm’s marketing information system (MIS) stores and analyzes data from a variety of sources and turns the data into information for useful marketing decision making. Causal Research :
A technique that attempts to understand cause-and-effect relationships. This technique is used to know if a change in something (for example, our packaging or product formula) will have an impact on something else (for example, the recognition of our product in the supermarket or the consumer satisfaction related to the product) - Explain the importance of information in gaining insights about the marketplace and customers
- Define the marketing information system and discuss its parts
- Outline the steps in the marketing research process
- Explain how companies analyze and use marketing information Conclusions are only as good as the quality of data collected
Challenges associated with gathering data in foreign countries include:
Differences in sophistication of research operations
Infrastructure/transportation challenges
Lack of phones and/or low literacy rates
Local customs and cultural differences
Language translation difficulties Collect the Data Data must be analyzed and interpreted to be meaningful
Arranging data in a table or other summary form to get a broad picture of overall responses
Examining the data by subgroups to see how results vary between categories Design the sample: Research reports typically contain the following sections:
Executive summary
Description of research methods
Discussion of study results
Limitations of study
Conclusions and recommendations Marketing Information Systems
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