2. Purpose of Marketing
Environment Analysis
To know where the environment is
heading
To find out the opportunities and threats
To assess the scope of opportunities
and short list those that can favorably
impact the business.
To project how the environment will be
at a future point of time
To help secure the right fit between the
3. Marketing Environment Analysis
Is the process of gathering, filtering
and analysing information relating to
the marketing environment.
4. Factors to be covered under
Environmental Analysis
Macro Micro environment
Environment The Market/Demand
Demographic The Consumer
Environment The Industry
Socio-Cultural
Environment
The Competition
Government Policies
Economic Environment
Supplier – Related
Political Environment Factors
Natural Environment
Technological
Environment
Legal Environment
Government Policies
6. Demographic Environment
Factors relating to Population
Size
Growth Rate
Age Distribution
Religious Composition
Literacy Levels
House hold pattern
Regional characteristics
7. Socio-Cultural Environment
Culture (religion, language, education etc)
Social Class (income, occupation, lifestyle,
behavior)
Changing position of women
8. Economic Environment
General Economic Conditions
Rate of Growth of Economy
Credit Availability and Interest Rates
Inflation Rate
Behaviour of Capital Markets
Foreign Exchange Reserves
Exchange Rates
Tax Rates
Prices of Essential Commodities
Energy ( cost, availability etc)
Labour ( cost, skill, availability etc)
9. Political Environment
Form of Government
Political Stability
Social and Religious Organisations
Media and Pressure Group
10. Natural Environment
Natural Resources
Ecology
Climate
Recent Trends in Natural
Environment
Shortage of Raw Materials
Increased Energy Costs
Anti- Pollution Pressures
Changing Role of Government
12. Legal Environment/Business
Legislation
Corporate Affairs
Consumer Protection
Employee Protection
Sectoral Protection
Corporate Protection
Protection of society as a whole against
unbridled business behaviour
Regulations on products, prices and
distribution
13. Environmental Factors Specific to the
Business Concerned (micro)
The Market/Demand
The Consumer
The Industry
The Competition
Government Policies
Supplier – Related Factors
14. The Market/Demand
Nature of the demand
Size of the demand, present and potential
Changes taking place in consumption
pattern and buying habits
Invasion of substitute products
Changes taking place in consumption
pattern/buying habits
15. The Consumer
Preferences/Priorities
Location and Number
Purchasing Power
Buying Behaviour
Personality Traits
Lifestyles and Needs
Brand Loyalty
Reactions to Competing Products
17. Government Policies
Subsidising selected firms and Industries
Ban fresh entry in selected Industries
Government can be producers, thus acting
as competitors
18. Supplier – Related Factors
Bargaining Power in the Industry
Trade-off between integrated and
outsourcing
Suppliers becoming Competitors
20. Marketing research
American marketing association defines
marketing research as “ the systematic
gathering, recording and analyzing of data
about the problems relating to marketing of
goods and services”
Market research
It is the process of collecting and analyzing data
relating to demand for a good or service in a
specific market
21. Marketing Research provides information about
customers and markets, and their reactions to
various products, prices, distribution and
promotion strategies
22. Scope of marketing research
Consumer research
Product research including product planning
and development
Study of the market
Sales research- methods, performance,
establishing territories and quotas
Pricing- expectations, actions and reactions,
policies and strategies
Distribution research-
channels,intermediaries,inventory level,
handling and transportation
23. Motivation research- why people buy or do
not buy a product
Advertising research- ad messages,
selection of the right media, evaluation
Policy research-finance, production and
HR activities
24. Marketing Research Process
Formulating/ identification of the
problem
Planning the research technique
Collection of data
Analyzing the data
Interpreting the data
Preparing and presenting the report
Follow up study
25. Research Plan
Research design is broadly classified into
Exploratory research, Descriptive research and
Casual research
Research instruments used are
a) Questionaires
b) Mechanical instruments such as galvanometer
(for response assessment such as emotions,
interest in an advertisement), tachistoscope
(message is flashed one hundredth of a second
several times and subject behaviour is observed)
c) Sampling
26. Data Collection Techniques
Internal data through financial accounting
records, sales records, reports from
salesman etc
External sources are of 2 types
a) Primary data collection – Mail
interviews, Telephonic interviews,
Personal interviews, Observation
b) Secondary data collection
27. Barriers to the use of Marketing Research
All problems cannot be researched.
A narrow conception of the research
Uneven caliber of researchers (view it as a
clerical job)
Poor framing of the problem
Late and occasionally erroneous findings
Only a tool to improve the decision making
process
Personality and Presentational differences
Cannot predict the future
28. Executives hesitant to use MR practices
Based on sampling and hence lacks
accuracy
Time consuming
Lack of professionals
29. Marketing information system is a process
which helps marketers manage their marketing
efforts, effectively and efficiently. It helps in
planning, analyzing and presenting the information
necessary for marketing decisions
Importance of marketing information system
Anticipation of consumer demand (changing
styles)
Economic indicators
Dynamic competitive environment
Development of science and technology
Growing complexity of marketing
Consumerism and increasing grievances
30. Components of MkIS
Internal marketing information ( Data
available within the firm)
Marketing intelligence system( data
available in the external environment)
Marketing research system(special studies
relating to a particular problem)
31. Types Of Markets
Consumer Markets
Consumer markets are the markets for products and
services bought by individuals for their own or family use.
Goods bought in consumer markets can be categorized
in several ways:
Convenience goods-
-Fast-moving consumer goods (“FMCG's”)
– These are high volume, low unit value, fast repurchase
– Examples include: Ready meals; Baked Beans,
biscuits, Newspapers
32. Specialty goods
Special / unique features
Buyers make special efforts to buy them
Buy from specialist retailers
Reluctant to buy substitutes
E.g., ray ban sunglasses, Rolex watch, Tata
sumo Nikon camera etc
33. Shopping goods
Buy after comparing the suitability, quality, price
etc of different brands
E.g., clothing, furniture, shoes, utensils etc
Emergency Goods-
To fulfill an urgent need
May be a convenience good or a shopping
good
34. It can also be classified as:
Consumer durables
– These have low volume but high unit value. Consumer
durables are often further divided into:
– White goods (e.g. fridge-freezers; cookers;
dishwashers; microwaves)
– Brown goods (e.g. DVD players; games consoles;
personal computers)
- orange goods( goods which change at a moderate
rate- clothing)
- red goods-( American expression of fast moving
consumer goods like food)
- yellow goods( American expression of consumer
goods that are purchased infrequently, yellow =brown +
white, e.g. oven, refrigerator, TV, CD player)
35. Soft goods
– Soft goods are similar to consumer
durables, except that they wear out more
quickly and therefore have a shorter
replacement cycle
– Examples include clothes, shoes
Services (e.g. hairdressing, dentists,
childcare_)
36. Industrial goods
meant for use in production / business/
institutional purposes
Not directly used by the consumers
Classified as
Production facilities and equipments, production
materials, production supplies and management
materials
37. • Selling finished goods
– Examples include office furniture,
computer systems
• Selling raw materials or components
– Examples include steel, coal, gas,
timber
• Selling services to businesses
– Examples include waste disposal,
security, accounting & legal services
38. Consumer behaviour
“Consumer behaviour is a process whereby
individuals decide what, when, how and from
whom to purchase goods and services”
- Walters and Paul
CB decides how consumers make purchase
decisions and how they use the products they
buy
Important for framing production policies, price
policies, distribution policies and also in
designing the sales promotion programmes.
39. Need and importance of CB
enables marketer to design appropriate
strategies for marketing
plan and develop products
framing pricing policies
to know buying motive
deciding on appropriate channels
buying decision and consumption
40. BUYING MOTIVE
is a strong feeling , instinct, desire or an
emotion that make the buyer to buy the
product
Are influences or considerations which
provide the impulse to buy, induce action
or determine choice in the purchase of
goods and services
41. Types of buying motives
Product motive( hunger thirst ,sleep etc)
Patronage motive( price, location, quality, variety,
service, personality of the owner or the salesman)
Emotional motive (status, personal comfort, pride)
Rational motive (logical thinking- price, durability,
efficiency, convenience, monetary gain etc)
Inherent motive (for satisfaction he makes best efforts)
Learned motive ( acquired or learned from environment
and education- religious belief, fear , security )
42. Consumer buying process
Recognition of a need
Identification of alternatives
Evaluation of alternatives
Purchase decision
Post purchase behaviour
43. Organizational Buying Process
Problem recognition
Determine product dimensions and quantity
Precise description of product characteristics
Search and qualification of potential sources
Acquisition and analysis of proposals
Evaluation of proposals and supplier selection
Selection of an order routine
Performance feedback and evaluation
44. Specific marketing considerations in the
industrial facilities business :
Long decision taking process
High risk
Complex buying center
The specific competitive situation
45. Demand Forecasting
Market demand may mean different
things to different marketers, but the
marketer needs to have a clear idea
what it means to his company and
estimate it accordingly
46. Concept of Market Demand for Marketing
Market demand for a product under a
specified marketing activity is the sales volume
of the product in the target market for a specified
time period in a particular region
Steps
Market potential
Companies Demand
Sales quota and Sales Budget
Current Demand estimation
47. Future Demand Estimation
a) Composite sales force opinion
(company asks its sales force to estimate
sales patterns in the near future
depending upon their experience)
b) Survey of buyer intentions
c) Expert opinion
48. Market Demand – The total volume that would be bought
by a defined customer group in a defined geographical
area in a defined marketing environment under a defined
marketing program.
Company Demand – Company’s estimated share of
market demand at alternative levels of company
marketing effort in a given time period.
Sales Quota – Sales goal set for a product line, company
division, or sales representative.
Sales Budget – a conservative estimate of the expected
volume of sales and is used primarily for making current
purchasing, production and cash flow decisions.
49. Estimating Current Demand
Total Market Potential = Potential number of buyers x
Average quantity purchased by a buyer x The Price
Area Market Potential – There are primarily two
methods
a) Market – Build up method – requires identifying all
the potential buyers in each market and estimating their
potential purchases
b) Multiple factor Index method – Estimating market
potential either by using existing market indices or by
developing their own market indices
Eg: Potential of a “Book publishing company”
depends on Population, number of teachers in the
market etc.
50. Industry Sales and Market shares
Estimating Future Demand
Survey of Buyers intentions
Composite of Sales force opinions
Expert opinion
Past sales analysis
Market- Test method
51. Heart of Modern Strategic Marketing
Segmenting
Targeting
Positioning
53. A Market segment consists of a group of
customers who share a similar set of
needs and wants
Basic Market Preference Patterns
Homogeneous
Diffused
Clustered
54. “Market segmentation is the subdividing of
market into homogeneous Sub section of
customers , where any sub section can
conceivably be selected as a target
market to be reached with a distinct
marketing mix” –
Philip Kotler
55. Purpose of segmentation
Helps company to exploit its market better
by selecting niches (suitable segments).
Helps in focussing strategies more sharply
on target groups.
Allocation of marketing budget.
Builds customer loyalty.
56. Effective Segmentation
Criteria
Measurable
Substantial (large enough to serve)
Accessible
Differentiable
Responsiveness (effective programs
for attracting and serving the
segments)
59. Demographic
Age and Life-cycle stage (Johnson baby
soap for infants and children)
Gender
Income
Occupation
Religion
Purchasing power
60. Geographic segmentation
Area
Climate
Population density
Behavioural Segmentation
Decision Roles- People are different and
they all pursue different roles like initiator,
influencer, Decider, Buyer and User (useful
for designing communication strategy)
Behavioural Variables- Occasions, Benefits,
User status, Usage rate, Buyer- readiness
stage, Loyalty Status (Hard core loyals,
Split loyals, Shifting loyals, Attitude)
62. Bases for Segmenting Business Markets
Geography
Benefits sought
Usage rate
Business Buyers have to orient their tastes as
below
- First time prospects
- Novice
- Sophisticates
64. Niche Marketing – Niche is a more narrowly defined
customer group seeking a distinctive mix of
benefits.
Local Marketing – It is a growing trend called as
Grass roots Marketing. Marketing activities are
pursued for getting on close and personally relevant
to individual customers as possible
Customerisation- It combines operationally driven
mass customization with customized marketing in a
way that empowers consumers to design the
product and service offering of their choice.
69. “positioning is the act of designing the
company’s offer and image so that it occupies a
distinct and a valued place in the target
consumers minds “
– PHILIP KOTLER
steps in product positioning
Identifying potential competitive advantages
Choosing the appropriate advantages
Communicating those advantages
70. Techniques of positioning
Positioning by corporate identity (tata, Sony,
godrej)
Positioning by brand endorsement (lux, surf ,
titan, dettol)
By product attributes or benefits (pepsodent
germ killer and gum protection
By use, occasion and time (Vicks for cold, burnol
for burns, dettol antiseptic)
71. By price and quality (Nirma detergent powder)
By product category( dove – creamy moisturiser,
7up- alternative to cola)
By product user( particularly for class of
customers- horlicks junior, malt, nutrition drink)
By competitor(well established image of the
competitor – Avis-’ we serve better because we r
no.2’)