Scanning Environment

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					Gathering Information & Scanning the Environment

The significance

To provide insight into and inspiration for marketing decision-making, companies must possess comprehensive, up-to-date information on macro trends and micro effects particular to their business

Marketers should understand the importance of continuously monitoring and adapting to that environment

The role for marketing
• Major responsibility for identifying significant marketplace changes lies with marketers
• They must be trend trackers and opportunity seekers • Marketers are ideally equipped to do this:
– They have disciplined methods for collecting info – They spend more time interacting with customers and observing competition

Every company must organize and distribute a continuous flow of information to its marketing managers

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

Marketing information system (MIS)
• The company’s marketing information system should be a cross between:
– What managers think they need – What managers really need – What is economically feasible

Components of an MIS
• Common sense / analysis
• Internal company records • Market intelligence system

• Market research

Common sense / analysis
• The analysis of sales volume trends can provide insights
– For ex., the decline in cigarette consumption

Internal company records
• Order to payments cycle • Sales information systems • Databases, data warehousing and data mining

Marketing Intelligence System
• Train, motivate sales team to spot, report developments
• Motivate distributors, retailers and intermediaries to pass along important intelligence

• Network externally • Set up a customer advisory panel • Take advantage of government data resources
• Purchase information from outside suppliers • Online customer feedback

Analyzing the Macro-environment

• A trend is a direction or sequence of events that has momentum and durability • Trends are more predictable and durable than fads • Trends reveal the shape of the future and provides many opportunities

Trends: Examples

Increasing nuclear families

Home loans, fast food, branded sweets, small cars

Fascination for health

Mineral water, cooking oil, shampoos, creams, hair oil, air conditioner, gym

Trends: Examples

Preference for herbal / ayurvedic ingredients

Shampoos, hair oil, soaps, creams

Increasing number of women going to work

Eating out, luxuries, RTE foods, vacation packages

Macro-environmental factors




Natural Political-legal


• These forces represent non-controlloables, which the company must monitor and to which it must respond • Marketers must also pay attention to their interactions, because these will lead to new opportunities and threats

Demographic environment
• Demography is the study of population • Demographics refers to selected population characteristics as used in marketing
– Worldwide population growth – Population age mix – Literacy levels

Economic environment
• Markets require purchasing power as well as people
• Available purchasing power in an economy depends on:
– Current income – Prices – Savings – Debt – Credit availability

Socio-cultural environment
• Society shapes the beliefs, values and norms that largely define people’s tastes and preferences • Customers show distinctiveness in preferences and habits… • …marketing decisions need to be fine-tuned to reflect the needs, aspirations and attitudes of customers who show distinctiveness

Natural environment
• The deterioration of natural environment is a major global concern
• New rules and regulations hit certain industries • Marketers need to be aware of the threats and opportunities associated with four trends:
– – – – Shortage of raw materials, especially water Increased cost of energy Increased pollution levels Changing role of governments

Technological environment
• One of the most dramatic forces shaping people’s lives is technology
• Every new technology is a force for ‘creative destruction’

• Marketers should monitor the key trends:
– – – – Pace of change Opportunities for innovation Varying R&D budgets Increased regulation

Political-legal environment
• Marketing decisions are affected by changes in the political and legal environment
– Laws, – Government agencies – Pressure groups

• Two major trends deal with increase in business legislation and growth of special interest groups
– Increase in business legislation – Protecting the welfare of consumers

Case Study

Case study 2
• Spot a consumer trend
• Pick a company whose product might be affected by the trend

• Explain how the trend affects the product • Describe how the company should react

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