Collecting Information and Forecasting Demand

Good Marketers need insights to help them analyze the market and customers' needs, interpret past performance and trands, and plan future activities. Every firm must organize and distribute a continuous flow of information to its marketing managers.

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. This system draws from data based on internal company records, marketing intelligence, and marketing research.

A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. The internal records system supplies results data, but the marketing intelligence system supplies happenings data.

Marketing Research

Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. It consist of six steps. They are

Step 1: Define the Problem, Decision Alternatives, and Research Objectives
            Marketing managers must be careful not to define the problem too broadly or too narrowly for the marketing researcher. Not all research projects can be specific. Some research is exploratory, to shed light on the nature of the problem and suggest possible solutions or new ideas. Some research is descriptive, to quantify demand and some research is casual, to test a cause-and-effect relationship.

Step 2: Develop the Research Plan
            Managers develop a plan for gathering the needed information. This involves decisions about data sources, research approaches, research instruments, sampling plan, and contact methods.

Step 3: Collect the Information
            The data collection phase of marketing research is generally the most expensive and the most prone to error. Four major problems arise in surveys: (1) some respondents will be away from home or otherwise inaccessible and must be contacted again or replaced; (2) some respondents will not cooperate; (3) some respondents will give biased or dishonest answers; and (4) some interviewers will be biased or dishonest.

Step 4: Analyze the Information
            Extract the findings by tabulating the data and developing summary measures. The researchers now compute averages and measures of dispersion for the major variables and apply statistical techniques and decision models in the hope of discovering additional findings. They may test different hypotheses and theories, applying sensitivity analysis to test assumptions and the strength of the conclusions.

Step 5: Present the Findings
            As the last step, the researcher presents findings relevant to the major marketing decisions facing management. Researchers increasingly are being asked to play a more proactive, consulting role in translating data and information into insights and recommendations. They're also considering ways to present research findings in ways that are understandable and compelling.

Step 6: Make the Decision
            The decision to launch the research into motion or not is manager's responsibilities, but the research has provided them with insight into the problem.

Figure. The Marketing Research Process

Forecasting and Market Demand
             Forecasting is the art of anticipating what buyers are likely to do under a given set of conditions. The next step is to estimate total market demand. Market demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program. Market demand is not a fixed number, but rather a function of the stated conditions, which is why it is called the market demand function.

Identifying the Major Forces
       
Firms must monitor six major forces in the broad environment: demographic, economic, sociocultural, natural, technological, and political-legal in addition to the steep decline of the stock market, which affected savings, investment, and retirement funds; increasing unemployment; corporate scandals; stronger indications of global warming and other signs of deterioration in the national environment; and of course, the rise of terrorism. These dramatic events were accompanied by the continuation of many trends that have already profoundly influenced the global landscape.