Download Marketing Information Systems: Collecting Information and Forecasting Demand and more Slides Marketing Management in PDF only on Docsity!
MBA 206 Marketing Management I. INTRODUCTION Collecting Information and Forecasting Demand Making marketing decisions in a fast-changing world is both an art and a science. To provide context, insight, and inspiration for marketing decision making, companies must possess comprehensive, up-to- date information about macro trends, as well as about micro effects particular to their business. Holistic marketers recognize that the marketing environment is constantly presenting new opportunities and threats, and they understand the importance of continuously monitoring, forecasting, and adapting to that environment Firms are adjusting the way they do business for more reasons than just the economy. Virtually every industry has been touched by dramatic shifts in the demographic, economic, natural, social-cultural, technological, and political-legal environments. In this chapter, we consider how firms can develop processes to identify and track important macroenvironment trends. We also outline how marketers can develop good sales forecasts. Chapter 4 will review how they conduct more customized research on specific marketing problems. II. DEFINITION OF TERMS ● data mining the extracting of useful information about individuals, trends, and segments from the mass of data ● data warehouse a collection of current data captured, organized, and stored in a company’s contact center. ● database marketing the process of building, maintaining, and using customer databases and other databases for the purpose of contacting, transacting, and building customer relationships. ● market various groups of customers. ● marketer someone who seeks a response (attention, a purchase, a vote, a donation) from another party, called the prospect. ● marketing the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. ● marketing intelligence system a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment. ● marketing plan written document that summarizes what the marketer has learned about the marketplace, indicates how the firm plans to reach its marketing objectives, and helps direct and coordinate the marketing effort. ● psychographics the science of using psychology and demographics to better understand consumers. ● strategy a company’s game plan for achieving its goals
III. REPORT CONTENT
Components of a Modern Marketing Information System The major responsibility for identifying significant marketplace changes falls to the company’s marketers. Marketers have two advantages for the task: disciplined methods for collecting information, and time spent interacting with customers and observing competitors and other outside groups. Some firms have marketing information systems that provide rich detail about buyer wants, preferences, and behavior. Companies with superior information can choose their markets better, develop better offerings, and execute better marketing planning. The Michigan Economic Development Corporation (MEDC) studied the demographic information of its visitors and those of competing Midwestern cities to create a new marketing message and tourism campaign. The information helped MEDC attract 3.8 million new trips to Michigan, $805 million in new visitor spending, and $56 million in incremental state tax revenue over the period 2004–2008. Every firm must organize and distribute a continuous flow of information to its marketing managers. A marketing information system (MkIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. It relies on internal company records, marketing intelligence activities, and marketing research. We’ll discuss the first two components here, and the third one in the next chapter. The company’s marketing information system should be a mixture of what managers think they need, what they really need, and what is economically feasible. An internal MIS committee can interview a cross-section of marketing managers to discover their information needs. Table 3.2 displays some useful questions to ask them TABLE 3.2 Information Needs Probes
- 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 information would you want daily? Weekly? Monthly? Yearly?
- What online or offline newsletters, briefings, blogs, reports, or magazines would you like to see on a regular basis?
- What topics would you like to be kept informed of?
- What data analysis and reporting programs would you want?
- What are the four most helpful improvements that could be made in the present marketing information system? Internal Records To spot important opportunities and potential problems, marketing managers rely on internal reports of orders, sales, prices, costs, inventory levels, receivables, and payables.
Marketing Intelligence A marketing intelligence system is a set of procedures and sources that managers use to obtain everyday information about developments in the marketing environment. The internal records system supplies results data, but the marketing intelligence system supplies happenings data. Marketing managers collect marketing intelligence in a variety of different ways, such as by reading books, newspapers, and trade publications; talking to customers, suppliers, and distributors; monitoring social media on the Internet; and meeting with other company managers. Before the Internet, sometimes you just had to go out in the field, literally, and watch the competition. This is what oil and gas entrepreneur T. Boone Pickens did. Describing how he learned about a rival’s drilling activity, Pickens recalls, “We would have someone who would watch [the rival’s] drilling floor from a half mile away with field glasses. Our competitor didn’t like it but there wasn’t anything they could do about it. Our spotters would watch the joints and drill pipe. They would count them; each [drill] joint was 30 feet long. By adding up all the joints, you would be able to tally the depth of the well.” Pickens knew that the deeper the well, the more costly it would be for his rival to get the oil or gas up to the surface, and this information provided him with an immediate competitive advantage. Marketing intelligence gathering must be legal and ethical. In 2006, the private intelligence firm Diligence paid auditor KPMG $1.7 million for having illegally infiltrated it to acquire an audit of a Bermuda-based investment firm for a Russian conglomerate. Diligence’s cofounder posed as a British intelligence officer and convinced a member of the audit team to share confidential documents. A company can take eight possible actions to improve the quantity and quality of its marketing intelligence. After describing the first seven, we devote special attention to the eighth, collecting marketing intelligence on the Internet. Train and motivate the sales force to spot and report new developments. The company must “sell” its sales force on their importance as intelligence gatherers. Grace Performance Chemicals, a division of W. R. Grace, supplies materials and chemicals to the construction and packaging industries. Its sales reps were instructed to observe the innovative ways customers used its products in order to suggest possible new products. Some were using Grace waterproofing materials to soundproof their cars and patch boots and tents. Seven new-product ideas emerged, worth millions in sales. Motivate distributors, retailers, and other intermediaries to pass along important intelligence. Marketing intermediaries are often closer to the customer and competition and can offer helpful insights. ConAgra has initiated a study with some of its retailers such as Safeway, Kroger, and Walmart to study how and why people buy its foods. Finding that shoppers who bought their Orville Redenbacher and Act II brands of popcorn tended to also buy Coke, ConAgra worked with the retailers to develop in-store displays for both products. Combining retailers’ data with its own qualitative insights, ConAgra learned that many mothers switched to time-saving meals and snacks when school started. It launched its “Seasons of Mom” campaign to help grocers adjust to seasonal shifts in household needs. Hire external experts to collect intelligence. Many companies hire specialists to gather marketing intelligence. Service providers and retailers send mystery shoppers to their stores to assess cleanliness of facilities, product quality, and the way employees treat customers. Health care facilities’ use of mystery patients has led to improved estimates of wait times, better explanations of medical procedures, and less- stressful programming on the waiting room TV. Network internally and externally. The firm can purchase competitors’ products, attend open houses and trade shows, read competitors’ published reports, attend stockholders’ meetings, talk to employees, collect competitors’ ads, consult with suppliers, and look up news stories about competitors.
Set up a customer advisory panel. Members of advisory panels might include the company’s largest, most outspoken, most sophisticated, or most representative customers. For example, GlaxoSmithKline sponsors an online community devoted to weight loss and says it is learning far more than it could have gleamed from focus groups on topics from packaging its weight loss pill to where to place in-store marketing. Take advantage of government-related data resources. The U.S. Census Bureau provides an in-depth look at the population swings, demographic groups, regional migrations, and changing family structure of the estimated 304,059,724 people in the United States (as of July 1, 2008). Census marketer Nielsen Claritas cross-references census figures with consumer surveys and its own grassroots research for clients such as The Weather Channel, BMW, and Sovereign Bank. Partnering with “list houses” that provide customer phone and address information, Nielsen Claritas can help firms select and purchase mailing lists with specific clusters. Purchase information from outside research firms and vendors. Well-known data suppliers include firms such as the A.C. Nielsen Company and Information Resources Inc. They collect information about product sales in a variety of categories and consumer exposure to various media. They also gather consumer-panel data much more cheaply than marketers manage on their own. Biz360 and its online content partners, for example, provide real-time coverage and analysis of news media and consumer opinion information from over 70,000 traditional and social media sources (print, broadcast, Web sites, blogs, and message boards,) Collecting Marketing Intelligence on the Internet Thanks to the explosion of outlets available on the Internet, online customer review boards, discussion forums, chat rooms, and blogs can distribute one customer’s experiences or evaluation to other potential buyers and, of course, to marketers seeking information about the consumers and the competition. There are five main ways marketers can research competitors’ product strengths and weaknesses online. Independent customer goods and service review forums. Independent forums include Web sites such as Epinions.com, RateItAll.com, ConsumerReview.com, and Bizrate.com. Bizrate.com collects millions of consumer reviews of stores and products each year from two sources: its 1. million volunteer members, and feedback from stores that allow Bizrate.com to collect it directly from their customers as they make purchases. Distributor or sales agent feedback sites. Feedback sites offer positive and negative product or service reviews, but the stores or distributors have built the sites themselves. Amazon.com offers an interactive feedback opportunity through which buyers, readers, editors, and others can review all products on the site, especially books. Elance.com is an online professional services provider that allows contractors to describe their experience and level of satisfaction with subcontractors. Combo sites offering customer reviews and expert opinions. Combination sites are concentrated in financial services and high-tech products that require professional knowledge. ZDNet.com, an online advisor on technology products, offers customer comments and evaluations based on ease of use, features, and stability, along with expert reviews. The advantage is that a product supplier can compare experts’ opinions with those of consumers. Customer complaint sites. Customer complaint forums are designed mainly for dissatisfied customers. PlanetFeedback.com allows customers to voice unfavorable experiences with specific companies. Another site, Complaints.com, lets customers vent their frustrations with particular firms or offerings. Public blogs. Tens of millions of blogs and social networks exist online, offering personal opinions, reviews, ratings, and recommendations on virtually any topic—and their numbers
