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.

Developing Marketing Strategies and Plans

Key ingredients of the marketing management process are "insightful, creative strategies and plans" that can guide marketing activities.

Characteristics of a Great Marketing Company

• The company selects target markets in which it enjoys superior advantages and exits or avoids markets where it is intrinsically weak.
• Virtually all the company's employees and departments are customer and market-minded.
• There is a good working relationship between marketing, R&D, manufacturing, sales, and customer service.
• The company has incentives designed to lead to the right behaviors.
• The company continuously builds and tracks customer satisfaction and loyalty.
• The company manages a value delivery system in partnership with strong suppliers and distributors.
• The company is skilled in building its brand name(s) and image.
• The company is flexible in meeting customers' varying requirements.

A Holistic Marketing Orientation and Customer Value

1. Value exploration - How a company identifies new value opportunities.
2. Value creation - How a company efficiently creates more promising new value offerings.
3. Value delivery - How a company uses its capabilities and infrastructure to deliver the new value offerings more efficiently.

The Business Mission

Each business unit needs to define its specific mission within the broader company mission. The Business Unit Strategic Planning consists of steps shown in the following Figure.

SWOT Analysis

The overall evaluation of a company's strengths, weakness, opportunities, and threats is called SWOT analysis. It is a way of monitoring the external and internal marketing environment.

Goal Formulation

Once the company has performed a SWOT analysis, it can proceed to goal formulation, developing specific goals for the planning period. Goals are objectives that are specific with respect to magnitude and time.

Strategy Formulation

Goal indicates what a business unit wants to achieve; strategy is a game plan for getting there.

Program Formulation and Implementation

Today's businesses recognize that unless they nurture other stakeholders - customers, employees, suppliers, distributors - they may never earn sufficient profits for the stockholders. A company might aim to delight its customers, perform well for its employees, and deliver a threshold level of satisfaction to its suppliers.

According to McKinsey & Company, strategy is only one of seven elements - all of which start with the letter S - in successful business practice. The first three: strategy, structure, and systems are considered the "hardware" of success. The next four: style (how employees think and behave), skills (to carry out the strategy), staff (able people who are properly trained), and shared values (values that guide employees' actions) are the "software".

Feedback and Control

Peter Drucker pointed out that it is more important to "do the right thing" - to be effective- than "to do things right" - to be efficient. The key to organizational health is willingness to examine the changing environment and adopt new goals and behaviors.

The Marketing Plan and Marketing Performance

Working within the plans set by the levels above them, product managers come up with a marketing plan for individual products, lines, brands, channels, or customer groups. Each product level, whether product line, or brand must develop a marketing plan for achieving its goals. A marketing plan summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives.

Profitability Analysis

Measuring the profitability of products, territories, customer groups, segments, trade channels, and order sizes helps companies determine whether any should be changed or eliminated. Many firms now use marketing profitability analysis or its broader version, activity-based cost accounting (ABC), to quantify the true profitability of different activities. Managers can then reduce the resources required to perform various activities, make the resources more productive, acquire them at lower cost or raise prices on resource-intensive products.

Oklahoma Christian University

Marketing, Management and Innovation (Spring 2013)

 

Defining Marketing for the 21st Century

 

The Importance of Marketing

Marketing is the activity set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society. [p.15] Marketing is about identifying and meeting human and social needs. Marketers market 10 main types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas. Core Marketing Concepts are "Needs, Wants, and Demands."

Holistic Marketing Concept 

Holistic Marketing Concept is based on the development, design, and implementation of marketing programs, process, and activities that recognize their breadth and interdependencies.

 

The Four Ps of Marketing

McCarthy classified various marketing activities into "marketing-mix" tools of four broad kinds, which he called the four Ps of marketing: product, price, place, and promotion. 

Marketing mix has been evolved from "product, place, promotion and price" to "people, process, programs and performance".