LECTURE3

Marketing Management

Dr. Mohamed Hesham Mansour

MARKETING MANAGEMENT
12th edition

3 Gathering Information and Scanning the Environment

Kotler

Keller

Chapter Questions_1
What are the components of a modern marketing information system? What are useful internal records? What is involved in a marketing intelligence system?

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Chapter Questions_2
What are the key methods for tracking and identifying opportunities in the macroenvironment? What are some important macroenvironment developments?

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MARKETERS RESPONSIBILTY
Trend Trackers Opportunity seekers Disciplined methods for collecting information Spend more time interacting with customers and observing competitors

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Consumption Patterns IN Europe

Chocolate Cheese Tea Cigarettes

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MIS Probes for Information

What decisions do you regularly make? What information do you need to make these decisions? What information do you regularly get? What special studies do you periodically request? What information would you want that you are not getting now? What are the four most helpful improvements that could be made in the present marketing information system?
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Internal Records

Order-to-Payment Cycle Databases, Warehousing, Data Mining

Sales Information System Marketing Intelligence System

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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
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Secondary Commercial Data Sources

Nielsen

SAMI/Burke

MRCA

Simmons

Information Resources, Inc.

Arbitron

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Analyzing the Macroenvironment

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Needs and Trends

Fad
Unpredictable& short-lived

Trend
Predictable& durable

Megatrend
Slow to form& stay longer

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10 Megatrends Shaping the Consumer Landscape

Aging boomers Delayed retirement Changing nature of work Greater educational attainment Labor shortages Increased immigration Rising Hispanic influence Shifting birth trends Widening geographic differences Changing age structure

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Exercise What are Egypt Megatrends?

Organizational Environment
All elements existing outside the boundary of the organization that have the potential to affect the organization

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External Environment
General environment/Societal affects
indirectly

Task environment
- Affects directly - Influences operations and performances

Internal environment elements within the

organizations boundaries

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Organizational Environments

Technological Customers Labor Market Competitors

General Environment

Task Environment

Management

Suppliers

Internal Environment

Suppliers

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Environmental Forces

Demographic Political-Legal Economic

Technological Natural

Socio-Cultural

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Technological Dimension
Scientific and technological advances Specific industries Society at large Impact Competition Relationship with Customers Medical advances ( Genome Cloning) Nanotechnology advances
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Technological Environment
Pace of change
Opportunities for innovation Varying R&D budgets Increased regulation of change
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Socio-Cultural Dimension
Dimension of the general environment Demographic characteristics Norms Customs Values

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Social-Cultural Environment
Views of themselves Views of others Views of organizations Views of society Views of nature Views of the universe
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Most Popular American Leisure Activities

Walking Gardening Swimming Photography Bicycling Fishing Bowling Camping Jogging Free weights Golf Continuing education

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Population and Demographics

Size Growth rate Age distribution Ethnic mix Educational levels Household patterns Regional characteristics Geographical shifts

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3- Egypt Country Profile

3.4 population

Population: 77,505,756 (July 2005 est.) Age structure: 0-14 years: 33% (male 13,106,043 / female 12,483,899) 15-64 years: 62.6% (male 24,531,266 / female 23,972,216) 65 years and over: 4.4% (male 1,457,097 / female 1,955,235) (2005 est.) Median age: total: 23.68 years male: 23.31 years female: 24.05 years (2005 est.) Population growth rate: 1.78% (2005 est.) Birth rate: 23.32 births/1,000 population (2005 est.) Death rate: 5.26 deaths/1,000 population (2005 est.)
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Mattel Markets in China Little emperors& six pocket syndrome

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Population Age Groups

65+ 40-65 25-40 Teens School-age Preschool

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3-30

Household Patterns

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Schwabs Chinese-language Web site

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Key Demographic Trends in U.S.

By 2050 non-Hispanic whites will make up only about half of the population, down from 74% in 1995; and 69% in 2004 Baby boomer generation is aging and losing interest in high-cost goods. Generation Y, rival them in size, will soon rival them in buying power. The single father household is the fastest growing living arrangement, which rose 62% in 10 years. Two-parent and single-mother households are still much more numerous Unprecedented demographic shift = married couple households slipped from 80% in 1950s to just over 50% in 2003. Couples with kids= 25%, with projection 20% by 2010 and 30% of homes inhabited by someone who 3-33 lives alone.

Exercise What are the consequences?

Economic Dimension
General economic health Consumer purchasing power Unemployment rate Interest rates Recent Trends Frequency of mergers and acquisitions Small business sector vitality
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Economic Environment

$ Purchasing Power

$ Income Distribution $ Savings Rate $ Debt $ Credit Availability

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Types of Industrial Structures

Industrial economies

Industrializing economies

Raw-materialexporting economies

Subsistence economies

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India An Industrializing Economy

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Saudi Arabia A Raw-Material Exporting Economy

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Banana Republic The Gap look is recognizable everywhere Old Navy

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4.1 External Environment

A) Societal Environment
c- Economic
2002(a) GDP at market prices (Ebn) GDP (US$ bn)(b) 378.9 84.2 2003(a) 417.5 71.5 2004(a) 485.3 78.3 2005(a) 538.5 93.2 2006(a) 617.7 107.9

Real GDP growth (%)

Consumer price inflation (av; %) Population (m) Exports of goods fob (US$ m) Imports of goods fob (US$ m) Current-account balance (US$ m) Foreign-exchange reserves excl gold (US$ m) Total external debt (US$ bn) Debt-service ratio, paid (%) Exchange rate (av) E:US$

3.0(c)
2.7 69.9 7,250 -14,709 849 13,242

3.2
4.5 71.3 8,987 -15,156 3,723 13,589

4.1
11.3 72.6 12,274 -21,586 3,237 14,273

4.5
4.9 74.0 16,073 -27,200 2,207 20,609

6.8
7.7 75.4(c) 20,546 -33,104 2,731 24,462

30.0 10.3 4.50

31.4 11.7 5.84

30.3 7.8 6.20

34.1 6.8 5.78

31.3(c) 9.3(c) 5.73

(a) Actual. (b) Data for fiscal year, which ends on June 30th. (c) Economist Intelligence Unit estimates.

4.1 External Environment

A) Societal Environment
c- Economic
Key indicators Real GDP growth (%) 2006 6.8 2007 7.0 2008 7.2 2009 6.3 2010 5.3 2011 5.5

Consumer price inflation (av; %) Budget balance (% of GDP) Currentaccount balance (% of GDP) Commercial banks' lending rate (av; %) Exchange rate E:US$ (av)

7.7

8.4

5.7

3.3

3.5

4.2

-7.9

-5.5

-7.3

-6.5

-5.9

-5.3

2.3

1.2

1.2

1.7

2.1

2.7

12.6

12.9

13.3

13.0

12.6

12.0

5.73

5.69

5.72

5.75

5.76

5.78

Political-legal Dimension
Government Regulations Local State Federal Political Activities Pressure Groups

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Political-Legal Environment

Increase in business legislation

Growth of special interest groups

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Natural Environment
Shortage of raw materials Increased energy costs Anti-pollution pressures Governmental protections
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Unit Pricing on Store Shelves

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Variables in the Societal Environment

Economic
GDP Trends Interest Rates Money supply Inflation rates Unemployment Wage Devaluation Energy availability & cost Disposable & discretionary income

Technological
Total Gov. spending for R&D Industry spending Focus of tech. efforts Patent protection New products New technology Productivity improvement through automation

Political-Legal
Antitrust regulations Env. protection law Tax laws Special incentives Foreign trade reg. Attitude towards foreign companies Laws on hiring & promotion Stability of government

Socio cultural
Lifestyle changes Career expectations Rate of family formation Growth rate of population Age distribution Regional shifts Life expectancies Birth rate
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Task Environment
Sectors that have a direct working relationship with the organization Customers Competitors Suppliers Labor Market

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Labor Market Forces

Labor Market Forces Affecting Organizations today
Growing need for computer literate information technology workers Necessity for ongoing investment in human resources recruitment, education, training Effects of international trading blocks, automation, outsourcing, shifting facility locations upon labor dislocations
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External Environment and Uncertainty

High Rate of Change in Factors in Environment

High Uncertainty

Adapt to Environment

Low Uncertainty Low Low

High

Number of Factors in Organization Environment

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Adapting to the Environment

Boundary-spanning Inter-organizational partnerships Mergers or joint ventures

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Boundary Spanning & Competitive Intelligence - CI

What - Activities to get as much information as
possible about ones rivals

Where - Web sites, commercial databases,

financial reports, market activities, news clippings, trade publications, personal contacts

Why Spot potential threats or opportunities

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Interorganizational Partnerships
Adversarial Orientation
Suspicion, competition, arms length Price, efficiency, own profits Lawsuits to resolve conflicts Close coordination; virtual teams and people on site Minimal involvement and up-front investment Short-term contracts Contracts limit the relationship

Partnership Orientation
Trust, value added to both sides Equity, fair dealing, everyone profits E-business links to share information and conduct digital transactions Close coordination; virtual teams and people on site Involvement in partners product design and production Long-term contracts Business assistance goes beyond the contract
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Mergers& Joint Ventures

Mergers The combining of two or more organizations into one

Joint Venture A strategic alliance or program by two or more organizations

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Marketing Debate

Take a position: 1. Age differences are fundamentally more important than cohort effects. 2. Cohort effects can dominate age differences.

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Marketing Discussion

What brands do you feel successfully speak to you? Effectively target your age group? Why? Which ones do not?

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Assignment # 2 (individuals)
(16/11/2008)

You are about to start up a hospital and in order to start your marketing plan you decided first to go for scanning both the general and task environments that might influence the health care industry.

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THANK YOU

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