Marketing Management - 301

Lecture Note - 3
Gathering Information
and
Scanning the Environment

Prepared by
Dost Md. Samsuzzaman (Ronik)

Email: dm.samsuzzaman@iubat.edu
1
What is a Marketing Information System (MIS)?

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.

2
 What is an Information System?
• An organized combination of…
– People
– Hardware and software
– Communication networks
– Data resources
– Policies and procedures

• This system…
– Stores, retrieves, transforms, and disseminates
information in an organization

3
 Marketing Information Systems
Information Questions Decision
Sources and Answers Maker Results

New Information
Marketing
Market
Models
Research Answers
Studies
?
Inputs
Internal Decision Marketing
Data Databases Support Manager Outcomes
Sources System Decisions
(DSS)

External
Data
Information
Sources
Technology
Specialists
4
7-3 Feedback
 The Components of Modern MIS
• What decisions do you regularly make?
• What information do you need to make these decisions?

• What information do you regularly get?

• What information would you want that you are not
getting now?
• What magazines and trade reports would you like to
see on a regular basis?

• What are the most helpful improvements that could be

made in the present marketing information system?

• What information would you want daily? Weekly?

Monthly? Yearly?
5
Internal Records and Marketing Intelligence

(b) Sales
(a) Order-to-Payment
Information
Cycle
System

(c) Databases, (d) Marketing

Warehousing, Intelligence
Data Mining System

6
 (a) Order-to-payment cycle
• The heart of the internal records systems is
the order-to-payment cycle.

– Sales representative, Dealers send order to the firm.

– The sales department prepares Invoices,

Transmits copies to various department and
back-orders out-of-stock items.

– Shipped items generate shipping and billing documents

that go to various departments.

7
 (a) Order-to-payment cycle – cont…

– Companies need to perform these steps quickly and accurately,

because customers wants timely delivery.

– Companies are now using the Internet and Extranets

to improve the Speed, Accuracy, and efficiency
of the order-to-payment cycle.

– Online allows the companies to connect with all its

Suppliers, Manufacturers, Customers, and Resellers online.

8
 (b) Sales information system
Marketing managers need –
timely and accurate reports on current sales.

• Companies operates a sales and inventory data warehouse

that captures data: on every item,

for every customer,
for every store,
every day and
refreshes it every hour.

9
 (b) Sales information system

• Company adopted handheld devices with -

bar-code readers and Internet connections,
the representative simply point their handhelds at the bar codes
and automatically tally inventory.

• Technological gadgets are revolutionizing sales information systems

and allowing representatives to have up-to-the second information.

10
 (c) Databases, warehousing, data mining
• Today companies organize information in databases:
- customer databases,
- product databases,
- salesperson databases and
then combines data from the different databases.

• Example: The customer database contains –

- every customer’s - name,
- address,
- previous transactions,
- Interests and Options.
So instead of sending big email of new offer to every customer,
a company will rank its customers according
to purchase recently, frequency and
send the offer to the highest-scoring customers. 11
 Cont …………..
• Companies warehouse these data for easy accessibly
to decision makers.

By hiring analysts skilled in sophisticated statistical

methods, companies can “mine” the data, recent customer
trends, and other useful information.

The customer information can be cross-tabbed

with product and salesperson information to yield still
deeper insights.

Example:
Banks have developed the ability to track and analyze
every bank transaction made by its retail customer –
ATM, Bank branches and Online.
12
 *** (d) Marketing intelligence system

• A Marketing Intelligence System is a

set of procedures and sources
used by managers
to obtain everyday information
about developments in the marketing environment.

• Marketing managers collect marketing intelligence by:

(a) Reading books, newspapers, and trade publications.

(b) Talking to customers, suppliers, and distributors.

(c) Meeting with other company managers etc.

13
Steps to Improve Marketing Intelligence

Train sales force to scan for new developments

Motivate channel members to share intelligence

Network externally

Utilize a customer advisory panel

Utilize government data resources

Purchase information
Collect customer feedback online
14
 (a) Demographics
• Demography is the study of human populations
in terms of -
» size,
» density,
» location,
» age,
» gender,
» race,
» occupation, and other statistics.

• The main demographic force that marketers monitor

is population because people make up markets.
15
 Demographics – continue ……..

• The world’s large and highly diverse population poses

both opportunities and challenges.

• Population growth:
rate of populations in cities, regions, and nations.

• Population age mix: six age groups:

- Preschool
- School-age children
- Teens
- Young adults age 25 to 40
- Middle-aged adults age 40 to 65
- Older adults ages 65 and up
16
 Demographics – continue ……..

• Educational groups: five educational groups:

»Illiterates.
»High school dropouts.
»High school degrees.
»College degrees.
»Professional degrees.

• Household patterns: husband, wife and children

• Geographical shifts: Regional characteristics

and movements
17
Demographic: Picture - Household Patterns

18
 (b) Economic Environment
• The economic environment consists of factors that affect
consumer purchasing power and spending patterns.

• Marketers must pay close attention –

to major trends & consumer spending patterns.

• Some major economic trends are:

- changes in income,
- changing consumer
- spending pattern,
- unemployment.
19
 (c) Social Environment
• The cultural environment is made up of some forces
that affect a society’s basic -
values, perceptions, preferences, and behaviors.

• People grow up in a particular society

that shapes their basic beliefs and values.

20
 (d) Natural Environment
The natural environment involves the natural resources
that are needed as inputs by marketers or
that are affected by marketing activities.
Shortage of raw materials:
Natural Resources are available, but nonrenewable
recourses, such as oil, coal reserve is not unlimited.

Increased energy costs

Increased pollution:
Chemical and Nuclear wastages
Governmental protections:
The governments must concern and
21
efforts to promote a clean environment.
Nature

22
 (e) Technological Environment
• The technological environment is perhaps the most
dramatic force now shaping our destiny.

• New technology creates new markets and opportunity:

» Credit card,
» Automobile,
» Computer.
» E-commerce
» Bar code

• Opportunities for innovation

• Information Management
23
 (f) Political - legal
• Marketing decisions are strongly affected
by developments in the political environment.

• The political environment consists of :

»Increase in business legislation.

»Growth of special interest groups.
»Government agencies.

24