Chapter

3
Collecting
Information
and
Forecasting
Demand

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Learning Objectives
1. What are the components of a modern
marketing information system?
2. What are useful internal records for a
marketing information system?
3. What makes up a marketing intelligence
system?
4. What are some influential macroenvironment
developments?
5. How can companies accurately measure and
forecast demand

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 Components of a
Modern Marketing
Information System (MIS)

Internal company records

Marketing intelligence activities
Marketing research

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A marketing information system
consists of people, equipment, and
procedures to gather, sort, analyze,
evaluate, and distribute needed, timely,
and accurate information to
marketing decision makers.

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 Internal records
Internal reports of orders-to-payment cycle
Sales information system
Prices
Costs
Inventory levels
Receivables
Payables
Database, warehousing, data mining.
Marketing intelligence system

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 Marketing intelligence
Marketing intelligence system: a set of
procedures and sources that managers use to
obtain everyday information about
developments in the marketing environment

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 Improving
marketing intelligence
Motivate sales force to report new developments
Motivate intermediaries to pass along intelligence
Hire external experts to collect intelligence
Network internally and externally
Set up a customer advisory panel
Take advantage of government-related data
Purchase information from outside research vendors
Collect marketing intelligence on Internet

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 Marketing Intelligence on
the internet
Independent customer goods and
service review forums
Distributor or sales agent feedback
sites
Combonation sites offering customer
reviews and expert opinions
Customer complaint sites
Public blogs
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 Communicating & Acting on
Marketing intelligence
The competitive intelligence function
works best when it is closely
coordinated with the decision-making
process

Given the speed of the Internet, it is important

to act quickly on information gleaned online

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 Analyzing the
Macroenvironment
Needs and Trends

Fad/ unpredictable, short-lived, and without social

economic, and political significance. Momental
durability. Wight glove Mike Jackson.
Trend/ predictable, durable, and provides strategic
direction.. Loosing weight and sliming.
Megatrend/ large economic, social political, and
technological change.. Migration, income shift.

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 Identifying the
Major Forces
Six major forces in the broad
environment

Demographic Natural

Economic Technological

Socio-cultural Political-legal

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 The Demographic
Environment
Worldwide population growth
Population age mix
Ethnic and other markets
Educational groups
Household patterns
Population distribution and density.
Race, income, gender, family size,
occupation.

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The Economic Environment

CONSUMER PSYCHOLOGY

INCOME DISTRIBUTION

INCOME, SAVINGS, DEBT, CREDIT,

employment, deficits, GDP

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 Income distribution/ Types
of Economics
Subsistence Very low incomes
economies/ Mostly low incomes
primitive, fishing Very low, very high
Raw-material- incomes
exporting economies/ Low, medium, high
SA incomes
Industrializing Mostly medium
economies/ incomes
Emerging economics,
the
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 The Sociocultural
Environment/ know your
target customers think
Views of Views of
ourselves society

Views of Views of
others nature

Views of Views of the

organizations universe

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 The Sociocultural
Environment
Core cultural values
Values are passed from parents to children
and reinforced by social institutions

Subcultures
Groups with shared values, beliefs,
preferences, and behaviors emerging from
their special life experiences or circumstances

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 The natural environment
Corporate environmentalism
Opportunities await those who can reconcile
prosperity with environmental protection/ care
about natural resources, water, energy,
pollution, role of government.

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 The Technological
Environment

Accelerating pace of change

Unlimited opportunities
for innovation/ in medicine, hybrid, waste material
Varying R&D budgets/ more emphasis on product development
rather than research. Copying competitive product
Increased regulation of technological change/ more regulations to
investigate the unsafe products. Safety and health regulations

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 NATURAL ENVIRONMENT
Environmental Issues:
Shortage of raw material
Increase energy costs.
Anti-pollution pressure..
Governmental protection

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 The Political-Legal
Environment
LAWS/ two major trends in business legislation and
special interest groups. Consumer protection laws.

GOVERNMENT AGENCIES/ monitor completion,

PRESSURE GROUPS/ product safety and benefits,

rights and power of buyers, consumerism to real cost of
products and services, nitration quality and freshness.

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 Forecasting and Demand
Measurement
Market demand measures
Potential market/ consumers with sufficient
interests.
Available market/ consumers with interests,
income, access. The qualified market.
Target market/ the qualified market the firm
decides to pursue, chosen from available
market.
Penetrated market/ the actual consumers who
are buying the product.
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 Figure 3.1
Ninety Types of Demand
Measurement

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 Demand measurement
vocabulary
Market demand (Figure 3.2)

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 Market demand vocabulary
Market share/ % of companys sale to
industry.
Market-penetration index/ comparing
current and potential demands. Low index
indicate growth potential in the industry. The
high index indicates its expensive to attract
new customers. And competition becomes
price-based.
Share-penetration index/ comparing current
and potential market share yields to share-
penetration index. When low expand the share.
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 Demand measurement
vocabulary
Market forecast/ related to market expenditure.
Market potential/ is the limit approached by market
demand. It assumes the ownership % of a product in
population. The lower the % the higher is market
potential.
Company demand/ is the company's estimated share of
demand at alternative levels of co. marketing efforts for
a given period of time.
Company sales forecast/ expected level of sale based
on a plan. .
Company sales potential/ the absolute limit of co.
demand.
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Estimating Current Demand
Total market potential
Chain-ratio method

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 $1,ooo* 0.40* 0.20* 0.40* 0.30* 0.40 = $3.84
expected to be spent on light beer per capita*
population (6ms) = $23.04M Demand.

Discretionary Income spent on food per capita*%

spent on beverages*% spent on alcohol *% spent on
beer*% spent on light beer *population= Demand

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Estimating Current Demand
Area market potential

Market-buildup method/ used by business

marketers, to identify potential buyers in
each market and estimating their potential
purchase.

Multiple-factor index method/ the same as

the buildup method. Both are not accurate.
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 brand development index
(BDI)
Table 3.5

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Estimating Current Demand
Industry sales and market share/ as a
% of total industry estimated sales.

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 Estimating future demand/
forecasts are based on: what people
say, or do, or have done.
Survey of buyers intentions
Forecasting and purchase probability scale
Composite of sales force opinions
Expert opinion
Offer the product or sample to measure actual
demand.
Past-sales analysis/ analyze past sales (the
records).
Market-test method/ surveying intention to
buy.
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