2

Marketing Management

The changing marketing environment

and information management
(conclusion)
The company’s microenvironment

• Company [internal environment]

• Customers
• Competitors
• Suppliers
• Marketing intermediaries
• Other publics

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The company’s microenvironment

• Company
• Customers
• Competitors

3
 The company - internal environment

Internal environment includes:

• Marketing resources(e.g., market research skills, product
innovation, effectiveness of the distribution network, customer
satisfaction index, brand awareness, brand image, market share)

• Financial resources (e.g., cost and availability of capital,

financial stability, profitability)

• Technological/Physical resources (e.g., quality of

the production facilities, technological competences, ability to take
advantage of economies of scale)

• Organizational/HR resources (e.g., visionary and

capable leadership, dedicated and qualified employees)

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Suppliers

◼ Provide the necessary resources to produce the

company’s products;
◼ Should be treated as key partners in the customer
value creation process.

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Marketing intermediaries

Marketing Intermediaries are all the independent

organizations that help to make the product available for
the final consumers or business users.

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 Marketing intermediaries
Intermediaries include:

• Merchants (resellers) – the distribution channel firms that buy, take title
to and resell the product
• Wholesalers
• Retailers

• Agents – the distribution channel firms that search for customers and may
negotiate on the company’s behalf, but do not take title of the products.
• Brokers
• Representatives and sales agents

• Facilitators - assist in the distribution process but neither negotiate nor take
title of the products.
• Transportation and warehousing companies
• Marketing services agencies (marketing research firms,
advertising/communication agencies, media agencies, and marketing
consulting firms)
• Financial intermediaries (banks, credit companies, insurance
companies, etc..)
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 Other publics

Any public that has an actual or potential interest in or impact on the

organisation’s ability to achieve its objectives.

◼ Media publics carry news, features, and editorial opinion — newspapers,

magazines, and radio and television stations
◼ Government publics influence product safety and truth in advertising
◼ Citizen-action publics include consumer organizations, environment
groups, and minority groups
◼ Local publics include neighborhood residents and community
organizations
◼ General publics influence the company’s public image
◼ Internal publics include workers, managers, volunteers, and directors

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Marketing Information System

Marketing Information System (MIS) consists of

people, equipment and procedures that are used to
gather, sort, analyze, evaluate and distribute
necessary, timely and accurate information to
marketing decision makers.

MIS relies on:

◼ internal company records
◼ marketing intelligence activities and marketing
research.

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Internal records

Marketing managers rely on internal reports of orders, sales,

prices, costs, inventory levels, etc., which are critical to spot
opportunities and problems.
Sources:
◼ The order-to-payment-cycle – Sales representatives, dealers and
customers send orders to the firm. The sales department prepares invoices,
transmits copies to various departments and back-orders out-of-stock items.
Shipped items generate shipping and billing documents that go to various
departments
◼ Sales information systems – timely and accurate reports on current
sales are key to understand and anticipate consumer behavior, manage
stocks in individual stores and effectively manage supply chain; however,
sales data should be carefully interpreted.

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Marketing Intelligence

A marketing intelligence system is a set of

procedures and sources managers use to obtain
everyday information about developments in the
marketing environment (happenings data).

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Marketing Intelligence
Information Sources:

• Marketing managers who collect marketing intelligence by:

- reading books, newspapers and trade publications
- talking to customers, suppliers and distributors
- monitoring social media
- and meeting with other company managers.

◼ Sales force reports about new developments (front-line people know

and observe customer behavior firsthand)

◼ Mystery shopping - market research technique where individuals,

known as mystery shoppers, are hired to pose as ordinary
customers and evaluate the quality of a company's products,
services, or customer interactions.
◼ Competition intelligence (e.g. purchase competitor products; read
competitor’s reports; collect competitor’s ads; talk with dealers,
distributors, suppliers)
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Marketing Intelligence

Information Sources (cont.):

◼ Customer advisory panels (e.g. alumni and recruiters)

◼ Relevant statistical data resources (e.g. EUROSTAT, INE,
PORDATA statistics)

◼ Information from outside suppliers (e.g. Market Research

organizations as Nielsen, Marktest)
◼ Online customer feedback about the company and the
competition (e.g. online customer forums, review boards, chatrooms
and blogs; customer complaint forums)

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Improving the quality of the Marketing intelligence
system

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Source: https://digiday.com/marketing/artificial-intelligence-influencing-unilevers-marketing/
Databases, data warehousing, data mining

The information gathered from the company’s internal records and from the
marketing intelligence system must be properly stored and managed in
order for the company to take advantage of the information obtained.

Databases, data warehousing and data mining may assist managers in

performing these tasks.

Database marketing Data warehousing

Data mining

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Database marketing

◼ Customer database is an organized collection of

comprehensive information about individual
customers/prospects that is current, accessible and
actionable for marketing purposes (e.g. names, addresses,
past transactions, demographic and psychographic characteristics;
which will allow to rank customers according to purchaser recency,
frequency and monetary value).

◼ Database marketing is the process of building,

maintaining and using customer databases and
other databases to contact, transact and build
customer relationship.

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Data warehousing and data mining

◼ Data are organized into a data warehouse, where

marketers can capture, inquire and analyze them to
draw inferences about individual customer needs and
responses.
◼ Through data mining marketers can extract useful
information about individuals, trends and segments
from the “mass” of data. Using sophisticated statistical
and mathematical techniques such as cluster analysis,
predictive modeling. Data mining is a process of
knowledge discovery and of converting this knowledge
into actionable information.

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Databases uses and advantages

• To identify the best prospects, contact them and turn them into
customers

• To decide which customers should receive a particular offer.

• To deepen customer loyalty (e.g., by sending appropriate gifts,

discount coupons and interesting reading material)

• To reactivate customer purchases (e.g., by sending birthday cards,

Christmas shopping reminders, or off-seasons promotions)

• To avoid serious customer mistakes (e.g., two different staff

members of a bank phoned the same mortgage customer offering a
home equity loan at different prices)

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 3

Marketing Management

Analyzing Consumer Behaviour

What is consumer behaviour?

Consumer behaviour is the study of

how individuals or groups select,
purchase, use and dispose of
goods, services, ideas or
experiences to satisfy
their needs and wants.

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 Consumer behaviour is a process

Figure 1. Some issues that arise during stages in the consumption process (Solomon et
al., 2019)
Figure 2 Model of consumer behaviour (Kotler et al, 2016)

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What influences consumer behavior?

Cultural level

Social level

Individual level

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What is Culture?

Culture is a fundamental determinant of a

person’s wants and behaviors; it refers to the
meanings shared by (most) people in a social
group.
In a culture, values and norms are developed
that serve as guidelines for human behavior.
Each culture consists of subcultures that
provide more specific identification and
socialization for their members.

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Culture and subcultures

Nationalities

Religions

Racial groups

Geographic regions

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 Social classes
◼ Social classes are society’s relatively permanent
and ordered divisions; social class conveys
perceptions of inferior or superior positions in society.
◼ Within a social class, people tend to share values,
interests, languages and behaviors; they tend to
be alike in dress, speech patterns, recreational and
media preferences.
◼ Class may be indicated by a cluster of variables
(occupation, education, income, wealth, place of
residence).
◼ Class designation is mobile over time, depending
on how rigid social stratification is.
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 Social class
While income is an important indicator of social class,
social class is also determined by factors as education,
place of residence, cultural interests and worldview –
social class is also a “way of life”.
• Social class is a better predictor than income of
purchases which are highly symbolic but have low-
to-moderate prices (e.g. clothing, cosmetics, perfumes,
alcohol, leisure activities).
• Income is a better predictor of major expenditures
that do not have status or symbolic aspects (e.g.
major appliances).
• Social class and income together are better
predictors of purchases of expensive, symbolic
products (e.g. cars, homes, luxury goods).
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Social level

Reference
Family
groups

Social
roles
and status

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Reference groups
◼ We belong to or admire many different groups and a
desire for them to accept us often drives our purchase
decisions.
◼ Individuals or groups whose opinions or behaviour are
particularly important to consumers are reference groups
– actual or imaginary individuals or groups having a
significant influence upon an individual’s evaluations,
aspirations or behaviour.
◼ Formal and informal groups influence individual’s
purchase decisions, although such factors as the
conspicuousness of the product and the relevance of
the reference group for a particular purchase determine
how influential the reference group is.
Reference groups
Membership groups

Primary groups

Secondary groups

Aspirational groups

Dissociative groups

Source: Popp et al (2016). We love to hate

them! Social media-based anti-brand
communities in professional football.
International Journal of Sports Marketing and
Sponsorship, 17(4):349-367
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 When reference groups are important

Figure 10.2 Relative effects of reference groups

Source: Adapted from William O. Bearden and Michael J. Etzel, ‘Reference group influence on product and brand purchase decisions’, Journal of Consumer Research 9 (September
1982): 185. Reprinted with permission of The University of Chicago Press
 Opinion leadership
• Opinion leaders are people who are highly involved with the
product category and whose opinions are highly regarded;
they tend to influence the attitudes and behaviours of others;
they are highly confident and socially active, they are perceived
as highly credible information sources (they are technically
competent and have specialist knowledge), and they tend to be similar
to the consumer in terms of their values and beliefs (homophily).
• When choosing a spokesperson with influence on a certain
audience, marketers need to ensure she/he possesses important
qualities which are intended to be associated to the
product/brand.

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 Opinion leadership
• Specific opinion leaders can be difficult to identify, but marketers
who know their general characteristics can try to target them in
their communication strategies.
• The easiest way to find opinion leaders is to target people who
are paid to give expert opinions - professional opinion leaders
(e.g. doctors or scientists who obtained specialized information from
technical journals), celebrities or social media influencers.
• Consumers as opinion leaders - most opinion leaders are
everyday consumers. Companies sometimes try to identify
individuals who are influential within their social groups and to
involve them directly in their marketing efforts.

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 Family
Family is the most relevant consumer buying organization and most
influential primary reference group. Includes:
• Family of orientation (parents, siblings, grandparents, etc.). Parental
influences are particularly strong - parents influence orientation towards
religion, politics and economics, education; savings, food; smoking and
drinking, sense of personal ambition, self-worth and love.
• Family of procreation (spouse and children) - has a more direct
influence on everyday buying behavior; traditional purchasing roles of
wife and husband are changing; direct and indirect influence of children
and teens is increasing.

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 The family unit is one of the most
important organisations to which we claim
membership

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 The family life cycle (FLC)

• The FLC combines trends in income and

family composition with the changes in the
purchase pattern of the family household.
• As household members grow older, their
preferences and buying behaviour change,
at the same time, income levels tend to rise
(until retirement).
• A life-cycle approach assumes that pivotal
events (e.g., the birth of the first child, the
departure of the last child, the retirement of
the principal wage earner, a divorce) change
family relationships and trigger new
stages of life, which modify the family’s
priorities.

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 The family life cycle

Table1 The family life cycle:

an updated view
Source: Adapted from Mary C. Gilly and Ben M. Enis, ‘Recycling the
Family Life Cycle: A Proposal for Redefinition’, in Andrew A.
Mitchell, (ed.), Advances in Consumer Research 9 (Ann Arbor, MI:
Association for Consumer Research, 1982): 274, Figure 1

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 Roles and status
• We perform several different roles and
each of our roles (e.g., our role as a
mother, daughter, senior manager, student,
etc.) influences our buying behavior.

• Each role (consist of the activities a person is

expect to perform) has a status attached
to it; people tend to choose brands
and products that reflect and
communicate their role and actual or
desired status in society.
• Marketers must be aware of the status
symbol potential of products and
brands.
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Individual level

We will cover the following sub-topics:

Age and Personality

1 3
lifecycle stage and self-
concept

Occupation
2 Lifestyle and 4
and economic
circumstances values

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 1 Age and lifecycle stage

• The era in which a consumer grows up creates for that person a

cultural bond with millions of others born during the same period.
• As we grow older, our needs/wants and preferences change, often
in unison with others of our age cohort or generation.
• Europeans have many things in common with others because they
are about the same age or live in the same country.
• Important age cohorts include teenagers and young adults;
relevant generations include Generation Z, Millennials (or
generation Y), Baby Boomers and the Traditionalists.

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1 Age and lifecycle stage

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 2 Occupation and economic circumstances

• Occupation influences consumption patterns (e.g. a blue

collar will buy work clothes and shoes, a company executive will buy
lounge suits, air travel; brand managers, engineers, lawyers or
physicians may value different attributes when they purchase
computer software).

• Product and brand choice is greatly affected by

economic circumstances (spendable income, savings and
assets, borrowing power).

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 3 Personality and self-concept

◼ Each person has personality

traits that influence his/her
buying behaviour.
◼ Personality refers to the
unique psychological
characteristics that lead to
consistent and lasting
responses to the consumer’s
environment (e.g., of
personality traits: self-
confidence, dominance,
autonomy, deference,
sociability, defensiveness,
adaptability).

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The Big Five personality scale (Goldberg, 1990)

23
 3 Personality and self-concept

◼ Personality is considered a causal force in determining how

individuals relate to the world, as it creates patterns of
behaviour, thoughts, and feelings.
◼ Possessions tend to reflect the possessor’s identity;
individuals have an inherent desire to communicate who they
are, and they operationalize such a desire by using signs
embedded in everyday life to communicate the self.
◼ Brands and brand identity signs can be used to convey
positive, intangible attributes about consumers.

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 3 Personality and self-concept

Brand personality is defined as “the set of human characteristics

associated with a brand” (Aaker, 1997, p.347). Consumers often
choose brands that have a personality consistent with their own
actual or ideal self-concept.
• Sincerity (e.g., Campbell's)
• Excitement (e.g., MTV)
• Competence (e.g., CNN)
• Sophistication (e.g., Mercedes, Rolex)
• Ruggedness (e.g., Levi’s)

Source: Aaker, 1997

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 4 Lifestyle and values

• A value is a belief that some condition is preferable to its

opposite.
• Deeply held culturally-informed values dictate people’s
choices, desires and behaviour over the long term; they are
guiding principles in consumers’ lives.
• Products and brands may be considered as instrumental in
helping the person to achieve some goal that is linked to a
value (e.g., independence, achievement, security, honesty).
• Each culture is characterized by a set of core values to which
many of its members adhere. Broad-based cultural values
(e.g., security, benevolence, conformity, power) are more likely
to affect general purchasing pattern rather than to
differentiate between brands in a given category.
• Marketers who target consumers based on their values, believe
that with appeals to people’s inner selves it is possible to
influence their outer selves – purchase behaviour.
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 Values - Holbrook (1999) suggests consumers may
experience 8 types of consumer values:

• Efficiency – referring to all products aimed at providing various kinds

of convenience for the consumer.
• Excellence – addressing situations where the experience of quality is
the prime motivation.
• Status – where the consumer pursues success and engages in
impression management and conspicuous consumption.
• Self-esteem – situations where the satisfaction of possessing is in
focus.
• Aesthetics – searching for beauty in one’s consumption.
• Ethics – referring to motivations behind consumption (e.g. morally or
politically correct choices)
• Spirituality – experiencing magical transformations or sacredness in
the consumption.

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 4 Lifestyle

• Lifestyle is a person’s pattern of living as expressed in her/his

activities, interests and opinions. It portrays the “whole
person” interacting with his/her environment.
• Lifestyle marketing recognizes that people sort themselves into
groups based on the things they like to do, how they spend
their leisure time and how they choose to spend their
disposable income; consumers may use a set of brands and
products – consumption constellation (e.g., shoes, garments,
fragrance, etc.) - because they are associated with a given
lifestyle.

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 Lifestyles and consumption choices

• To access lifestyle, we need to discover how people spend their

time, what they find interesting and important, how they view
themselves and the world around them, as well as demographic
information.
• AIOs: activities (work, hobbies, social events, holiday, entertainment club
membership, community, shopping, sports), interests (family, home, job,
community, recreation, fashion, food, media, achievements); opinions (about
themselves, social issues, politics, business, economics, education, products,
future, culture) and demographics (age, education, income, occupation,
family size, stage in life cycle, geography, city size).
Lifestyle – LOHAS (Lifestyles of Health and Sustainability)

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 Lifestyle influences – lifestyles are influenced by
whether consumers are money or time constrained

Money-constrained consumers
(e.g., IKEA, Lidl, Wal-Mart)

Multi-tasking consumers

Time-constrained consumers
(e.g., ready to eat meals from Knorr)

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Values and Lifestyle

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