Marketing Basics

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MIS, MR, Demand Forecast/Measurement

Marketing Information System Marketing Research Process MTR Case Study Demand Forecasting Demand Measurement Market Research vs. Market Intelligence Case Study on the positive revival of SBI

Prof. Geeta Shetti

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Marketing Information System (MIS)

MIS comprises of:

Internal records Marketing Intelligence Decision support system

Micro & Macro Environment analysis

ESPN DT SWOT Analysis
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M.I.S Data
Internal records

Order to payment cycle Sales reporting systems

Marketing Intelligence

Information collected by continuous interaction with customers, dealers, suppliers, trade journals, magazines, news clippings etc
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MIS Data

Decision support system

Data collected is analysed using software programs, statistical tools to obtain meaningful solutions for the marketing problems.

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Marketing Research(M.R) Systematic design, collection, analysis & reporting of data & findings relevant to a specific marketing situation facing the company. M.R helps to build a strong basis:
To gain and retain competitive advantages. To plan any major change in the marketing 3/5/12

Role of M.R

Every business works on a Business Plan which

includes the corporate and the competitor strategies.

Business Plan is further supported by other functional

areas, with their specific strategies. M.R provides vital information for selecting an appropriate strategy.
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Role of M.R
Business levels:
Level 1
Segmentation Mktg. Strategy Target market selection Positioning Information for Mktg decisions

(Strategic)

4 Ps
Product Marketing Plan Price Promotion

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Place

3 LEVELS OF STRATEGY

Prof Gautam Trehan-

99

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Marketing Plan

After the marketing strategy is finalised, the marketing

plan proceeds further using the 4 Ps & based on the information given by Market Research.

Most decisions related to marketing plans are in terms of the product design, packaging, pricing, short-term & long-term promotions, distribution, logistics.
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Role of M.R in Mktg. Plan

Product- Identify the gap in the existing product which needs to be bridged up. Price- At what price the product would sell and get well accepted. Promotion- Which form of promotion should be adopted to get maximum returns.3/5/12

Marketing Research

1. 2. 3. 4. 5. 6. 7.

Define the idea, gather alternate strategies Plan the specific problem Analyse the problem Frame the problem Collect the required information Analyse the information collected Evaluate and present the findings
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8. Make a decision about the solution

M.R Process

1.Problem formulation
The 1st and most vital step is to formulate a specific problem faced by the Marketer.

2.Defining the research objective

The M.R objective should be loud and clear. This includes purpose, methodology, sources of information etc.
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M.R Process

3.Designing an effective research plan

a)Exploratory Research gather preliminary data to shed light on the real nature of the problem and suggest possible solutions/new ideas. Data is obtained from books, journals, magazines, annual reports, case studies etc. Minimal time and money is spent in this stage.
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M.R Process

b)Descriptive Research Usually conducted after an exploratory research. The quantum or intensity of the problem is identified. Usually involves less number of subjects. c) Causal Research to test the cause and effect relationship between two variables. Conducted using a detailed Questionnaire. 3/5/12

Research Instruments

Questionnaires Open-ended questions allows respondents to answer in their own words, while close-ended questions pre-specify the answers and the respondents have to select their choice. Open-ended questions reveal more while answers to close-ended questions are easier to interpret & tabulate.
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Research Instruments

Mechanical instruments 1. Galvanometers measure arousal/interest by exposure to specific ad/picture. 2. Tachistoscope flashes an ad repeatedly to measure recall/specific points of interest. 3. Audiometer attached to TV sets records channel viewing and helps measure TRPs.

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Research Instruments

Sampling unit target population to be sampled. Once sampling unit is determined, a sampling frame needs to be developed so that everyone in the sampling unit has an equal chance of being selected. Sampling procedure method used to select a representative sample from the identified target.
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Probability Sampling Types of P. sampling: 1. Random sample Every member has an equal chance of getting selected. 2. Stratified random sample Population is divided into mutually exclusive groups (age etc.) and then random samples are drawn from each group. 3. Cluster sample
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Non-Probability Sampling

1. Convenience sample select the most easily accessible population. 2. Judgment sample Identify a good prospect for getting the accurate information.
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Thought for the day

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Data collection

Data sources -two types: 1.Primary- gathered specially for a specific project. 2.Secondary-already existing but needs to be collected.

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Contact methods for data collection

1. Mail Questionnaire 2. Telephone Interview 3. Personal Interview Most versatile method, as interviewer can analyse the body language. However, its expensive and subject to the bias of 3/5/12

Information analysis

Researcher tabulates the data and develops

frequency distributions.
Averages and measures of dispersion are calculated

for major variables.

Advanced statistical techniques are applied to

extract pertinent findings from the collected data.

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Evaluation

Researcher should not overwhelm management with lots of numbers or fancy statistical techniques, but should present major findings pertinent to the mktg. decisions of the management.

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Good M.R

Scientific method Research creativity Multiple methods Interdependence of models & data Value & cost of information Healthy skepticism Ethical marketing
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Demand Forecasting
In 1982, an industrial groups application for financial
Reason Product demand was over-estimated.

assistance was rejected by a leading financial institution.

Likewise, another engineering companys proposal for

financial participation in its ambitious expansion plan was rejected by the financial institution.

Reason- Environmental factors were too optimistic, hence demand was over-estimated.

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Demand Forecasting

A marketing director took credit when the firms actual

sales was 25% higher than the sales budget.

Reason- Market, as a whole had grown by 20% that year. Hence, all companies had done well. He had to accept the fact that sales did not reflect the reality.

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Demand forecasting

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Key factors
Market Potential:

Forecasting exercise involves a thorough understanding of the market potential. eg. TV set Market Potential = Number of households in India. Assumption: household constitutes of 6 people. Then, we have 192 million households.
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Contd
25% of the population is below poverty line and would not be able to buy TV sets. 40% of population is in LIG category and may not be able to afford a TV set.
Balance 35% household constitutes the real market for targeting.
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Contd
Buyers need to have 3 characteristics:

1. Interest in the product. 2. Income to afford. 3. Access to the product.

Market potential refers to the upper limit of market demand.

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Market Demand

Market demand refers to the total volume of the product bought by a defined customer group of a defined geographical area during a defined period in a defined mktg. environment under a defined marketing program.

Demand is measured both in units & value.

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Contd

In the above eg, as more income is generated due to higher economic growth rate, the demand for TV sets will increase further.

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Company Demand

Companys share of the total market demand. It is subjected to all the determinants of the market demand, plus the determinants of the companys market share.

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Demand Estimation
1. Qualitative Tools Survey of Buying Intention Ssales force opinion Delphi Technique 2. Quantitative Techniques Short-term forecasting Long-term forecasting
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Qualitative Tools
Survey of Buying Intention:

Surveying the buyers to assess their intentions to buy the product. Very useful in estimating the mkt demand for consumers durables or new product. eg.Change in price and its effect on consumer demand can be studied by this method.
Purchase intention can be measured on a seven point scale from a Definitely buy to a Definitely not buy.

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Contd

Sales force opinion:

Company asks individual sales personnel to estimate sales of a product in his/her territory. All such estimates are then pooled and a national level Sales forecast is obtained.

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Contd
Delphi Technique:

Involves constituting a panel of experts and asking them to estimate the market demand for a product. Also asked to mention their assumption about the future market environment. Individual experts do not know who else is on the panel as each expert works from his/her office. Thus, chances of the
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Quantitative Tools
Long-term Forecasting:

Refers to forecasts for a period of three years or more. Methods used are1. Time Series analysis 2. Correlation techniques 3. Econometric models

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Long-term forecasting

1. Time series analysis:

Most firms have their own industry and sales data from the previous years. This time series data then helps estimate sales for the future time period.

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Contd
A time series is the data on any variable recorded over a

constant time interval.

A time-frame of data recording may be an hour, a day, a

week, a month or a year depending on the type of event the data.

eg. hourly temperature in a city, weekly earnings of the workers in a town, monthly prices of wheat and annual production of rice etc.

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Components of Time series

1. Trend (T) --represents the long term behavior of a time series. This would tell whether the time series data reveal a steady upwards or downwards movement. 2. Seasonal Variations ( S) represents variations caused by seasons. Typically this shows variations in demand during peak & lean seasons, example demand for snow tires will be at its peak during winter in USA.
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Contd
3. Cyclical variation (C) represents the typical business cycles that occur periodically in several years. For example, in stock market you will witness cycle of boom & cycle of recession that occurs once in a while between many years. 4.Random Variation ( R)represents irregular variations that occur by chance having no assignable cause. Random variation cannot be predicted.

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Contd
2. Correlation Method:

It is generally believed that the sale of a product is a function of many variables like price, advertising expenditure, distribution channels, personal disposable income etc.
This relationship is shown by the following equation. y= f( x1 x2, x3xn)

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Marketing Intelligence vs M.R

Marketing Research Intelligence It is the process of It is collecting information

collecting answers for a clearly defined question. remedial action. duration.

about the industry in which the Co. operates.

It is required for taking a It usually lasts for a short It is done by 2 methods-

It is used as a general

information and does not lead to any action. duration.

It usually lasts for a long Information collected from

3/5/12 papers, magazines, news

Qualitative & Quantitative.

Marketing Intelligence vs M.R

Marketing Research Intelligence Basic objective is to It is done by It is an ongoing process. It is done as in-house

bridge the existing gap. professional M.R companies identifying the consumers preferences relating to a particular brand.

activity.

It is mainly done with

It mainly focuses on

an objective of being vigilant about the competitors activity.

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Case study of MTR

The MTR ( Mavalli Tiffin Room ) is the brand name of a food related enterprise, originated from Bangalore. MTR restaurant on the Lal Bagh Road in Bangalore is very popular place and pre-packed food articles in packets with the MTR brand are sold here.
MTR holds a record of being the 1st fast food restaurant in the world to serve 21,000 customers in seven hours. 3/5/12

Pioneering concept

During World War 2, MTR found it difficult to make idlis, since rice was in short supply. MTR experimented with semolina instead of rice and they invented the popular breakfast item -Rava idli. MTR is the pioneer of Rava idli.
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History of MTR

MTR was founded as a restaurant by Parampalli Yajnanarayana Maiya and his brothers in the year 1924.

Many prefer to relax in the cafe's waiting hall on first floor before and after the breakfast.
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Diversification into instant food business

In mid 1970s, when India was under emergency, a Food Control Act made it mandatory that all food items be sold at very low prices. MTR found it difficult to maintain the high standards in its restaurant business and thus diversified into instant foods like Sambar powder, Rasam powder etc.
That was its entry into instant food business and 3/5/12

Diversification
Since 1970s, MTR has expanded and diversified, with MTR department stores opened next to the restaurant, and an outlet opened in Chennai. Currently MTR represents two separate: ties. 1.MTR restaurant business and 2.MTR Foods, the pre-packaged food business.
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MTR Restaurants

MTR Restaurants is currently headed by Hemamalini Maiya (grand-daughter of Yajnanarayana Maiya).

Uniqueness of this restaurant is that silver tumblers are used to serve beverages.

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MTR Foods Ltd.

MTR Foods was headed by Sadanand Maiya (son of the Yajnanarayana Maiya) until it was sold to Orkla, a Norwegian company for $80 million in March 07.

It produces packaged foods in different ranges spices, instant mixes, ready-to-eat foods, vermicelli, ready-to-cook gravies, frozen products range, papads, pickles, chips, snacks and ice creams.
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Quality Standards

It bought the packaging technology from Defence Food Research Laboratory (Mysore) and there are no preservatives are added while packaging. MTR is also the first Indian processed foods company to be certified with the HACCP (Hazard Analysis Critical Control Point) certification, a rigorous standard of food safety and hygiene.
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Global Reach

MTR is the first company in the world to have created a frozen dosa, which can be heated and eaten right away. MTR products are exported to the countries in the Persian Gulf, U.K and United States.
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Case study -MTR

MTR is a 84 year old company with an heritage of authentic vegetarian diet. MTR now is planning panIndia positioning for its spices and ready mixes category. Reasons for pan-India positioning- M.R data indicates: 1. MTR despite being a national brand is more popular for Indian spices, instant mixes like Rasam, Puliyogare, Bisibele, Vangi bath. 2. Indian woman is not yet fully ready to move out of the kitchen. She needs cooking aids that makes cooking easier. 3. MTR was popular in South India,3/5/12 up-north it is but

Case study- MTR

Regionalised strategy: 1. Strengthen its position in Karnataka and A.P where it currently holds 40 & 15% m.s of the total spice market. 2. Launching spice mixes to each region in the country. 3. Withdrawing from 350 out of 500 towns operating currently. Product Range: Breakfast mixes, meal mixes, dessert mixes.
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