ANALYZING MARKETING OPPORTUNITIES  Cash flow

AND UNDERSTANDING CONSUMERS  Relationship with banks, financial institutions

Internal & External Marketing Environment Analysis
Organization
INTERNAL ENVIRONMENT ANALYSIS • Leadership capability
• Evaluation of internal strengths & weaknesses. • Committed employees
• Whether the firm should limit itself to those • Flexibility or responsiveness
opportunities for which it has the required
strengths. • Entrepreneurial orientation

(OR) EXTERNAL ENVIRONMENT ANALYSIS

• Consider those opportunities that • Evaluation of key macro environment forces

might require it to find or develop new and microenvironment factors that affect a
strengths. firm’s ability to earn profits.

STRENGTHS & WEAKNESSES • It can take the form of an opportunity or threat.

Marketing

 Company reputation/goodwill MARKETING ENVIRONMENT

 Market share Macro-environment

 Brand equity • Demographic Environment

 Customer satisfaction • Economic Environment

 Product quality • Socio-cultural Environment

 Effectiveness in promotion, distribution, • Natural Environment

innovation etc.
• Technological Environment
Manufacturing
• Political-Legal Environment
 Facilities
Microenvironment (Task Environment)
 Capacity
All players involved in the production, distribution
 Economies of scale and promotion of goods and services.

 Technical manufacturing skill • Company (manufacturers)

 Able, committed workforce • Suppliers (material suppliers, service suppliers –

marketing research agencies, advertising
 Other capabilities agencies, transportation companies,
telecommunication companies, banking &
Finance
insurance companies)
 Availability of capital
• Distributors (stockists, dealers, agents, brokers,
 Financial stability manufacturer representatives, retailers)
• Customers responded to, with an appropriate defensive
marketing action.
Internal & External Marketing Environment
Analysis (contd.) SWOT ANALYSIS

EXTERNAL ENVIRONMENT ANALYSIS The overall evaluation of a company’s strengths,

(OPPORTUNITIES) weaknesses, opportunities and threats is called
SWOT Analysis.
• Three main sources of market opportunities –
• It is a way of monitoring the internal and
 Supply something that is in short supply external marketing environment.
(little marketing talent needed)

 Supply an existing product/service in a

new or superior way MARKET RESEARCH

a. Problem detection method (ask Objective

consumers for their suggestions)
To collect/obtain actionable insights* about the
b. Ideal method (ask consumers to imagine market** for making futuristic decisions, within the
an ideal version of the product/service) limitations of resources and time.

c. Consumption chain method (ask (*Actionable insights are different and distinctly
consumers what steps they follow in more valuable for making quality decisions than
acquiring, using and disposing of a general information or data.)
product)
(**Market could be the consumer, customer,
 Supply of a totally new product/service competitor or other dimensions of the market.)
(the last method ‘c’ - above)

• Examples of opportunities
MARKETING INFORMATION SYSTEM
• Converging industry trends and
introduction of hybrid products. A Marketing Information System (MIS) consists of
people, equipment and procedures to gather, sort,
• Improvement of a buying/selling analyze and distribute timely and accurate
process (more convenience, efficiency, information to marketing decision makers.
speed).
• MIS relies on internal company records,
• Customization of a product or service marketing intelligence activities and marketing
which otherwise is available only in research.
standard forms.
• E.g. Marketing studies for DuPont’s Dacron
• Lower-price versions of products. Polyester fillings for its own ‘Comforel’ pillow
brand.

INTERNAL RECORDS (RESULTS DATA)

EXTERNAL ENVIRONMENT ANALYSIS
(THREATS) • Order-to-Payment Cycle

• An environmental threat is a challenge posed by • Sales Information Systems (e.g. Wal-Mart)

an unfavorable trend or development that
would lead to lower sales or profit, unless
• Databases, Data Warehousing and Data Mining Marketing INSIGHTS provide diagnostic
(customer databases, product databases, information about how and why we observe certain
salesperson databases) effects in the marketplace and what that means to
the marketers.
MARKETING INTELLIGENCE (HAPPENINGS DATA)
TYPES OF RESEARCH
Marketing Intelligence System is a set of
procedures and sources managers use to obtain SYNDICATED research/study
everyday information about developments in the
marketing environment. • Consumer and trade information which firms
gather on a regular basis and sell for a fee.
• Read books, newspapers and trade (IMRB, ACNielsen, NCAER)
publications
CUSTOMIZED research
• Talks with customers, suppliers, distributors
• These are research studies designed and carried
• Monitor ‘social media’ on the internet via out for clients based on specific briefs and
online discussion groups requirements.
• E-mailing lists and blogs
SPECIALIZED LINE research
• Meet with other company representatives
• Specialized research services that firms provide
and managers
- developing a research brief (using freelancers),
Market Research collecting field data and preparing data analyses
and reports for other companies.
Objective
Other types/methods
To collect/obtain actionable insights* about the
market** for making futuristic decisions, within the • Cost-effective ways, such as, engaging
limitations of resources and time.
professors/students to design and conduct
(*Actionable insights are different and distinctly studies.
more valuable for making quality decisions than
general information or data.) • Monitoring published information and actions
systematically (examine newspapers, web sites,
(**Market could be the consumer, customer, industry reports, visiting competitive outlets).
competitor or other dimensions of the market.)
Research Process
MARKETING RESEARCH
1. Define the problem and research objectives
Marketing RESEARCH is the systematic design,
collection, analysis and reporting of data & findings 2. Develop the research plan
related to a specific marketing situation facing the
company. a. Data Sources
b. Research Approaches
• Market Survey
c. Research Instruments
• Market Insights
d. Sampling Plan
• Product Preference Test e. Contact Methods

• Sales forecast by region

3. Collect information
• Advertising Evaluation
4. Analyze the information
5. Present the findings a. Membership Groups (Primary) –
Continuous and informal interactions
6. Make the decision
(family, friends, neighbors, colleagues)

b. Membership Groups (Secondary) – Less

continuous and more formal interactions
CONSUMER BUYING BEHAVIOR
(professional, religious, political groups,
Consumer Buying Behavior is the study of how clubs)
individuals, groups and organizations select, buy,
c. Aspirational Groups – Groups a person
use and dispose of goods, services, ideas or
aspires to join
experiences to satisfy their needs and wants.
d. Dissociative Groups – Groups whose
FACTORS AFFECTING CONSUMER BUYING
values and behavior a person rejects
BEHAVIOR
B. Family – The most influential primary reference
Three broad sets of factors:
group.
1. Cultural Factors
a. Family of orientation – Orientation
2. Social Factors towards religion, education, economics,
politics, personal ambition, love & self-
3. Personal Factors worth (parents, siblings)
1. CULTURAL FACTORS b. Family of procreation – More direct
influence (spouse, children)
a. Culture – Values, perceptions, preferences,
attitudes, beliefs acquired during childhood c. Joint Family – Co-living with multiple
through family and other key educational & generations
social institutions. (Respect & care for elders,
honesty, integrity, hard work, achievement and C. Social Roles & Status – A person’s position in
success – traditional middle-class values) each group.

b. Sub-culture – A subset of culture that provides 3. PERSONAL FACTORS

more specific identification/socialization for its
A. Age/Stage in the life cycle – Important
members. (Nationality, religion, racial 7 ethnic
determinants in purchase and consumption of
groups – Blacks, Asians etc.)
goods/services
c. Social Class – Relatively homogeneous &
a. Family life cycle – Migration of grown-ups
enduring divisions in a hierarchically ordered
to other places for work, delayed marriages,
society and whose members share similar
tendency of professionals to acquire capital
values, interests & behavior. (Classification
goods in the early stages of career
variables – occupation, education, income,
wealth e.g. SEC classification) b. Critical life events – Marriage, childbirth,
relocation, career change, illness
2. SOCIAL FACTORS
B. Occupation & Economic Circumstances –
A. Reference Groups – Groups that have a direct
influence (membership groups) or indirect influence a. Occupation groups – Blue collar workers,
on a person’s attitudes, values & behavior white collar workers, senior executives,
software engineers etc.
 b. Economic circumstances – Disposable 2. Close supplier-customer relations
income levels, borrowing power, savings
3. Professional buying
potential etc.
4. Derived demand
C. Personality & Self-Concept –
5. Multiple buying influences
a. Personality – Distinguishing human
psychological traits based on which people 6. Multiple sales calls
respond to external stimuli (dominance,
autonomy, adaptability, sociability) 7. Inelastic demand

b. Self-Concept – Consumers are likely to 8. Fluctuating demand

choose brands whose personalities match 9. Geographical concentration of buyers
their own (sincerity, competence,
sophistication, ruggedness, excitement). BUYING BEHAVIOR IN B2B MARKET

D. Lifestyle & Values – BUYING CENTRE – the decision-making unit of a

buying organisation comprising of individuals and
a. Lifestyle – A person’s way of living as
groups whose roles, participation and behaviors
expressed in activities, opinions and
determine the purchase decision-making process in
interests in interacting with the outside
an organization.
world.
1. INITIATORS – Users or others in the
i. Time starved – Multitasking,
organization who request for goods & services to be
convenience-based products &
purchased for organizational purpose.
services
2. USERS – Those who will actually use the goods
ii. Money constrained – IKEA, Wal-
and services in performance of their organizational
Mart kind of cost-based products
functions.
b. Core Values – Belief systems that
3. INFLUENCERS – those who influence the buying
determine attitudes and behaviors. (Target
decision, by helping define product & service
peoples’ inner selves to influence their
specifications or providing information etc.
outer selves – purchase behavior.)
4. DECIDERS – Those who decide on suppliers or
B2B MARKET
on product requirements.
B2B Market (Business Market or Industrial Market):
5. APPROVERS – Those who approve/authorize
Organizations that acquire goods and services used
the actions and alternatives proposed by deciders
in the further creation/production of other
or buyers.
products and services that are sold or supplied to
others. 6. BUYERS – Those who have formal authority to
select suppliers and vendors, negotiate with them
• Examples – Manufacturing, construction,
and arrange purchase terms.
communication, transportation, banking,
finance, distribution and other service- 7. GATEKEEPERS – People who have the power to
oriented industries. prevent sellers or information from reaching
members of the buying centre (receptionists,
Characteristics
telephone operators, purchasing agents etc.).
1. Fewer and larger buyers
8. COACHES – Those who guide supplier • Experiential (memory scan of previous
salespersons with information on the buying experiences - handling, using the product)
process, key buying participants, evaluation criteria
etc.

CONSUMER BUYING DECISION PROCESS

THE FIVE-STAGE MODEL 3. EVALUATION OF ALTERNATIVES

All the stages apply, typically, in case of high-priced,

infrequently purchased items.

In case of frequently purchased, familiar products,

purchasing is routine.
4. PURCHASE DECISION

• If the decision is to buy, following are the

1. PROBLEM RECOGNITION further related decisions:

• Recognition of a problem or need (that can be A. The brand

satisfied through consumption)
B. The dealer (where to buy from)
• Internal – A person’s normal needs rise
C. Quantity
to a threshold level and becomes a drive.
(Hunger, thirst, boredom) D. Timing
• External – Arousal from an external E. Payment method
stimulus. (TV ad, the sight of a product - a
neighbor’s new car)

• Other triggers – Depletion of an existing 5. POST-PURCHASE BEHAVIOR

product (the pen runs out of ink),
A. Post-purchase Satisfaction
dissatisfaction with an existing product
• The level of satisfaction is inversely
proportional to the gap between
2. INFORMATION SEARCH expectation and performance

• Information Sources B. Post-purchase Action

• Personal (family, friends, acquaintances) • Actions vary depending on whether the

consumer is satisfied or dissatisfied and
• Commercial (ads, web sites, sales persons, levels thereof.
dealers, displays)
C. Post-purchase Use and Disposal
• Public (mass media)
• Consumption rate

• Disposal methods