Kotler Mktman 11ce Ch05

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Co ri ht 2004 © Pearson Education Canada Inc.

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Chapter 5

Gathering Information andMeasuring Market Demand




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Chapter Objectives

• In this chapter, we focus on the followingquestions:

– What are the components of a modern marketing

information system? – What constitutes good marketing research?

– How can marketing decision support systems

help marketing managers make better decisions?

– How can demand be more accurately measured

and forecasted?




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The Components of a Modern

Marketing Information System – What information would you want that you are not

getting now?

– What information would you want daily? Weekly?Monthly? Yearly?

– What magazines and trade reports would you like tosee on a regular basis?

– What topics would you like to be kept informed of?

– What data analysis programs would you want? – What are the four most helpful improvements that

could be made in the present marketing informationsystem?




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Internal Record Systems

• The Order-to-Payment Cycle

• Sales Information Systems

• Databases, Data Warehouses

And Data-Mining




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Can you name a company that uses

targeted mailings to promote new

products, or regional offerings?




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The Marketing

Intelligence System• A Marketing Intelligence System is

a set of procedures and sources

used by managers to obtaineveryday information about

developments in the marketing

environment.




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What are some of the potential

hazards a company might face by

relying too heavily on distributors,

retailers, or other

intermediaries for

market intelligence?




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The Marriott Vacation Club International Web sitegives interested customers the opportunity to sell

themselves on the Marriott offerings

http://www.marriottvacationclub.com/




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CEOExpress.com is a portal to information –a userclicks on a listing and is then connected to that site

http://www.ceoexpress.com/


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Table 5.1: Secondary-Data Sources

Secondary-Data Sources A. Internal SourcesCompany profit-loss statements, balance

sheets, sales figures, sales-call reports,invoices, inventory records, and prior research reports.

B. Government Publications• Statistical Abstract of the United States

• County and City Data Book

• Industrial Outlook

• Marketing Information Guide

C. Periodicals and Books

• Business Periodicals Index

• Standard and Poor’s Industry

See text for complete table



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Marketing Research System• Marketing Research

• Suppliers of Marketing Research

– Engaging students or professors to design and carry

out projects

– Using the Internet

– Checking out rivals

– Syndicated-service research firms

– Custom marketing research firms

– Specialty-line marketing research firms



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Figure 5.1:The Marketing

Research Process



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Marketing Research System

• The Marketing Research Process

– Step 1: Define the Problem, the Decision

Alternatives, and the Research Objectives

– Step 2: Develop the

Research Plan

• Data Sources

• Research Approaches – Observational research

– Focus group research



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– Survey research

– Behavioural data

– Experimental research

– Ethnography

• Research Instruments

– Questionnaires

– Psychological tools – Mechanical devices

– Quantitative measures



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Table 5.2: Types of Questions


1_____ 2 _____ 3_____ 4_____ 5_____

Small airlines generally give better service than large ones.Strongly Disagree Neither agree Agree Stronglydisagree nor disagree agree

A statement with which the respondentshows the amount of agreement/disagreement.

Likert scale

An organized tour groupSpouse andchildren

Business associates/friends/relativesSpouse

Children onlyNo one

With whom are you traveling on this flight?A question with three or more answers.MultipleChoice

In arranging this trip, did you personally phone American?Yes No

A question with two possible answers.Dichotomous

ExampleDescriptionName

A. Closed-end Questions



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• Sampling Plan

– Sampling unit

– Sample size – Sampling procedure



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A. Probability Sample

Simple random sample Every member of the population has anequal chance of selection

Stratified random sample The population is divided into mutually

exclusive groups (such as age groups),and random samples are drawn from eachgroup

Cluster (area) sample The population is divided into mutuallyexclusive groups (such as city blocks), and

the researcher draws a sample of thegroups to interview

Table 5.3: Probability and Nonprobability Samples

Continued on next slide . . .



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B. Nonprobability Sample

Convenience sample The researcher selects the mostaccessible population members

Judgment sample The researcher selects populationmembers who are good prospects foraccurate information

Quota sample The researcher finds and interviews aprescribed number of people in each ofseveral categories

Table 5.3: Probability and Nonprobability Samples (Continued)



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• Contact Methods – Mail questionnaire

– Telephone interviewing

– Personal interviewing• Arranged interviews

• Intercept interviews

• Online methods

– Click-stream

– Cookies

– Automated

telephone surveys



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• Step 3: Collect the

Information

• Step 4: Analyze the

Information

• Step 5: Present the

Findings

• Step 6: Make the

Decision



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• Overcoming Barriers to the Use of

Marketing Research

– A narrow conception of the research – Uneven caliber of researchers

– Poor framing of the problem

– Late and occasionally erroneous findings – Personality and presentational differences



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Marketing Decision SupportSystem

• Marketing Decision Support

System (MDSS)

– Marketing and sales

software programs• BRANDAID

• CALLPLAN

• DETAILER

• GEOLINE• MEDIAC

• PROMOTER

• ADCAD

• CONVERSTORY



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Table 5.5: Quantitative Tools Used in Marketing Decision Support Systems

Statistical Tools

1. Multipleregression:

A statistical technique for estimating a “best fitting” equation

showing how the value of a dependent variable varies withchanging values in a number of independent variables.Example : A company can estimate how unit sales areinfluenced by changes in the level of company advertisingexpenditures, sales force size, and price.

2. Discriminantanalysis:

A statistical technique for classifying an object or persons intotwo or more categories. Example : A large retail chain storecan determine the variables that discriminate betweensuccessful and unsuccessful store locations.

3. Factoranalysis:

A statistical technique used to determine the few underlyingdimensions of a larger set of intercorrelated variables.Example : A broadcast network can reduce a large set of TVprograms down to a small set of basic program types.




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Forecasting and DemandMeasurement

• The Measures of Market Demand

Figure 5.3: NinetyTypes of DemandMeasurement(6X5X3)



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– Which Market to

Measure?• Market

• Potential market

• Available market• Target market

(severed market)

• Penetrated market

• A Vocabulary for Demand Measurement

– Market Demand

• Market share

• Market penetration index

• Share penetration index

Forecasting and DemandMeasurement



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Figure 5.4: Market Demand Functions

Forecasting and

Demand Measurement



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Can you name a market segment

with a low penetration index? A

high penetration index? Can you

think of a market where the high

penetration index might be a

misleading indicator?




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Forecasting and Demand

Measurement – Market Forecast

– Market Potential• Product penetration

percentage

– Company Demand

– Company Sales

Forecast• Sales quota

• Sales budget

– Company Sales Potential




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• Estimating Current demand

– Total Market Potential

– Area Market Potential

• Market-Buildup Method


Measurement




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Measurement

• Multiple-Factor Index

Method – Brand development

index (BDI)




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Measurement – Industry Sales and Market Shares

• Estimating Future Demand

• Survey of Buyers’ Intentions

– Forecasting

– Purchase probability scale



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Measurement – Composite of Sales Force Opinions

– Expert Opinion

• Group discussion method

• Pooling of individual estimates

• Past-Sales Analysis

– Time-series analysis

– Exponential smoothing

– Statistical demand analysis – Econometric analysis

• Market-Test Method

Kotler Mktman 11ce Ch05

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