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Principles of Marketing

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Principles of Marketing ­ MGT301
VU
Lesson ­ 11
Lesson overview and learning objectives:
In last Lesson we discussed the marketing environment factors or forces. Today we will study
some strategies that a company designs to meet the requirements of the environment, to analyze
the opportunities available. In order to analyze the environment company needs information that
is acquired through marketing information system. Keeping in view this importance of the
marketing information and research we will be covering the topic of MIS or marketing research
system in this Lesson. Main objective of this Lesson is to eexplain the concept of marketing
information system, emphasising ways of assessing information needs, the sources used for
developing information and ways of distributing information.
So our today's topics are:
A. ANALYZING
MARKETING
OPPORTUNITIES
AND
DEVELOPING
STRATEGIES
B. MIS
Analyzing Marketing opportunities and developing strategies
We discussed in last two Lessons those companies and their marketing departments' success
depends upon the careful analysis of the marketing environment. Opportunities are need to be
analyzed and capture in order to make the profits. Changing market opportunities must be
explored and pursued.
In order to correctly identify opportunities and monitor threats, the company must begin with a
thorough understanding of the marketing environment in which the firm operates. The marketing
environment consists of all the actors and forces outside marketing that affect the marketing
management's ability to develop and maintain successful relationships with its target customers.
Though these factors and forces may vary depending on the specific company and industrial
group, they can generally be divided into broad micro environmental and macro environmental
components.
For
most companies, the
micro environmental
components are: the
∑MarketPotentitall
Market Poten ia
company, suppliers,
((sze,,grrowh rrae))
siize gowtth atte
marketing  channel
Customers
∑Cusomerr
Custtome
firms
Behaviorr((wans
Behavio wantts
(intermediaries),
and needs,,
and needs
ndustrry
IIndusty
customer  markets,
segmentation,,
segmentation
Strrucurre
ucttue
prrce sensitivity))
piice sensitivity
and  St
competitors,
Analysis
publics. The macro  (Antay/sixit
n ly s
Company
e nrrye xit
(e t /e
environmental
barrrerrs,buyerrs,
riies, buyes,
ba
∑Economc
Economiic
components
are  ssellerrs,
el les,
Analysis ((coss,,
Analysis costts
thought
to
be:  ssubsittiutess)
ubst tute )
brreak-even,
beak-even,
demographic,
ompetitor
C om  i
prroitabiliilty))
poffitab ity
economic,  natural,  RCspopetetor
e  ns
Response
∑CompanyFitt
Company Fi
technological,
Prroilies
off les
Competitors
P
((srrenghs,,
sttengtths
political, and cultural  ((capabliiltiitess,
capabi ie ,
weaknesses,,
weaknesses
forces.  The  wise  ccurrentand futurre
urrent and futue
rresources,culturre,
esources, cultue,
marketing  manager  accitonss)
a t ion )
goals))
goals
knows that he or she cannot always affect environmental forces. However, smart managers can
take a proactive, rather than reactive, approach to the marketing environment.
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Principles of Marketing ­ MGT301
VU
As marketing management collects and processes data on these environments, they must be ever
vigilant in their efforts to apply what they learn to developing opportunities and dealing with
threats. Studies have shown that excellent companies not only have a keen sense of customer but
an appreciation of the environmental forces swirling around them. By constantly looking at the
dynamic changes that are occurring in the aforementioned environments, companies are better
prepared to adapt to change, prepare long-range strategy, meet the needs of today's and
tomorrow's customers, and compete with the intense competition present in the global
marketplace.
A. Marketing Information System:
Marketing information is a critical element in effective marketing as a result of the trend toward
global marketing, the transition from buyer needs to buyer wants, and the transition from price to
non-price competition. All firms operate some form of marketing information system, but the
systems vary greatly in their sophistication. In too many cases, information is not available or
comes too late or cannot be trusted. Too many companies are learning that they lack an
appropriate information system, still do not have an information system, lack appropriate
information, or they do not know what information they lack or need to know to compete
effectively.
a. The Marketing Information System
No matters what type of marketing organization we refer to, marketing managers need a great deal
of information to carry out their marketing so as to provide superior value and satisfaction for
customers. However, despite the growing supply of information, managers often lack enough
information of the right kind or have too much information of the wrong kind. To overcome
these problems, many companies are taking steps to improve their marketing information systems.
In this Lesson the marketing information system is discussed, along with the marketing research
process thus showing the types of information gathered and how it is gathered.
If a marketing organization is to produce superior value and satisfaction for customers, marketing
managers need information at almost every turn. They need information about customers such as
resellers, end-users (who tend to be called consumers), as well as competitors, governmental and
other forces in the marketplace. A 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. MIS works in the following way:
A well-designed marketing information system (MIS) begins and ends with the user. The
MIS first assesses information needs by interviewing marketing managers and surveying
their decision environment to determine what information is desired, needed, and feasible
to offer.
The MIS next develops information and helps managers to use it more effectively. Internal
records provide information on sales, costs, inventories, cash flows, and accounts
receivable and payable. Such data can be obtained quickly and cheaply, but must often be
adapted for marketing decisions.
Marketing intelligence supplies marketing executives with everyday information about
developments in the external marketing environment. Intelligence can be collected from
company employees, customers, suppliers, and resellers; or by monitoring published
reports, conferences, advertisements, competitor actions, and other activities in the
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Principles of Marketing ­ MGT301
VU
environment. Marketing research involves collecting information relevant to a specific
marketing problem facing the company.
The Marketing
Finally, the
marketing
Information System
information
system
distributes
Marketing
Marketing
Marketing Information System
managers
environment
information
gathered
Developing information
Test
Analysis
from
markets
Assessing
Internal
Marketing
internal
information
Planning
Marketing
records
intelligence
needs
sources,
channels
Implemen-
marketing
tation
Competitors
intelligence,
Marketing
and
Control
Publics
decision
Marketing
marketing
Distributing
support
research
information
Macro-
research to
analysis
environment
the
right
forces
managers at
the
right
Marketing decisions and communication
times.
More  and
more companies are decentralizing their information systems through networks that allow
managers to have direct access to information.
b. The working of the Marketing Information System:
If a marketing organization is to produce superior value and satisfaction for customers, marketing
managers need information at almost every turn. They need information about customers such as
resellers, end-users (who tend to be called consumers), as well as competitors, governmental and
other forces in the marketplace. A 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.
I. Assessing information needs:
Marketing organizations must establish what information is needed or likely to be needed. This is a
key feature of the MIS that underscores the importance of information.
II. Developing information:
Internal Records - provide a wealth of information, which is essentially raw data for decision-
making. An effective MIS organizes and summaries balance sheets, orders, schedules, shipments,
and inventories into trends that can be linked to management decisions on marketing mix changes.
III. Marketing Intelligence:
Provides the everyday information about environmental variables that managers need as the
implement and adjust marketing plans. Sources for intelligence may vary according to needs but
may include both internal and external sources.
IV. Marketing Research:
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Principles of Marketing ­ MGT301
VU
Marketing research links the consumer, customer, and public to the marketer through an exchange
of information.
c. Subsystems of Marketing Information System:
A well-designed market information system consists of four subsystems.
The first is the internal records system, which provides current data on sales, costs,
inventories, cash flows, and accounts receivable and payable. Many companies have
developed advanced computer-based internal reports systems to allow for speedier and
more comprehensive information.
The second market information subsystem is the marketing intelligence system, supplying
marketing managers with everyday information about developments in the external
marketing environment. characterized by the scientific method, creativity, multiple
methodologies, model building, and cost/benefit measures of the value of information.
The third subsystem, marketing research, involves collecting information that is relevant to
specific marketing problems facing the company. The marketing research process consists
of five steps: defining the problem and research objectives; developing the research plan;
collecting information; analyzing the information; and presenting the findings.
The fourth system is the Marketing Decision Support System (MDSS marketing system)
that consists of statistical and decision tools to assist marketing managers in making better
decisions. MDSS is a coordinated collection of data, systems, tools, and techniques with
supporting software  and hardware. Using MDSS software and decision models, the
organization gathers and interprets relevant information from the business and the
environment and turns it into a basis for marketing action. MDSS experts use descriptive
or decision models, and verbal, graphical, or mathematical models, to perform analysis on a
wide variety of marketing problems.
d. Why to acquire information:
Managers mostly want to be able to predict the future for a company and its products. That future
embraces the total market demand and the nature of such demand, the company's share by brand
and what competitors will be doing. They want this information so they can chart their own firm's
future and thereby are proactive rather than be forced into reacting to a competitor's actions.
1.
The firm's internal record system should be set up in such a way as to easily provide
information in a form the manager can act on. But this is largely historical information such as
sales by account, by territory, by salesperson and so on. Acquiring forward-looking information is
the name of the game. By monitoring the relevant intervening variables, firms are able to monitor
intentions to purchase among many other factors such as competitor's activities. Such intervening
variables differ by industry sector and company. For consumer goods companies' measures of
awareness, attitudes toward the brand, and distribution levels -- among others -- are indicators of
future sales performance. In the case of industrial companies, relationships between buyers and
sellers are all important. So measures of customer service levels, product performance measures
and acceptability of the technical knowledge of the salespeople will be partial indicators of whether
particular suppliers will be chosen. In both instances, economic indicators are scanned before
companies decide on the level of marketing expenditure. That is, whether an expanding or
contracting local and global economy faces the industry and firm.
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Principles of Marketing ­ MGT301
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2.
Well accepted salespeople invariably have stronger relationships with their clients, and
being closer to them, are privy to more information on the buying company's performance,
expectations of the future and even the views on the supplying companies strengths and
weaknesses as well as their competitors. Often it is necessary to establish performance rankings in
a formal manner.
In much the same manner as consumer companies assess the important criteria that
consumers user to decide between brands, industrials conduct research that identifies the criteria
purchasers use to choose and maintain suppliers, as well as the ratings for individual companies.
Given the generally high education level of such as sales engineers, it is not uncommon for the
field force to administer such research. Others use research companies.
e. Marketing Research
The systematic design, collection, analysis, and reporting of data relevant to a specific marketing
situation facing an organization
Steps in the Marketing Research Process
The marketing research process consists of four steps:
1. Defining the problem and research objectives
2. Developing the research plan,
3. Implementing the research plan, and
4. Interpreting and reporting the findings.
f. Why to Conduct Business Research?
Marketing Research is a Systematic & objective process of designing, gathering, analyzing &
reporting information that is used to solve a specific problem. It Provides information for aid in
making business related decisions, to Identify opportunities and generate & refine actions. It is
important for the mangers for many decisions like:
 Helps reduce risk inherent in decision-making
 Provides an important link to customers
 Allows implementation of the business concept
 Enables managers to identify & understand stakeholders wants & needs and to develop
appropriate strategies to meet these needs
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE