3

Gathering Information and

Scanning the Environment

Marketing Management, 13th ed

 Chapter Questions
• What are the components of a modern
marketing information system?
• What are useful internal records?
• What is involved in a marketing intelligence
system?
• What are the key methods for tracking and
identifying opportunities in the macro
environment?
• What are some important macro environment
developments?
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 Introduction
Developing and implementing marketing plans requires a number of
decisions. Making those decisions is both an art and a science. To
provide insight into 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 and adapting to that
environment.
To carry out their analysis, planning, implementation, and control
responsibilities, marketing managers need a marketing information
system (MIS). The role of the MIS is to assess the managers’ information
needs, develop the needed information, and distribute that information in
a timely manner.

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 Management Information System

Marketers find many opportunities by identifying trends

(directions or sequences of events that have some
momentum and durability) and megatrends (major social,
economic, political, and technological changes that have
long-lasting influence). Within the rapidly changing global
picture, marketers must monitor six major environmental
forces: demographic, economic, social-cultural, natural,
technological, and political-legal.

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 Six Major Environmental Forces
• Demographic environment
In the demographic environment, marketers must be aware
of worldwide population growth; changing mixes of age,
ethnic composition, and educational levels; the rise of
nontraditional families; and large geographic shifts in
population.

• Economic
In the economic arena, marketers need to focus on income
distribution and levels of savings, debt, and credit
availability.

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 Six Major Environmental Forces
• Social-cultural
In the social-cultural arena, marketers must understand people’s
views of themselves, others, organizations, society, nature,
and the universe. They must market products that correspond
to society’s core and secondary values, and address the needs
of different subcultures within a society.

• Natural
In the natural environment, marketers need to be aware of the
public’s increased concern about the health of the
environment. Many marketers are now embracing
sustainability and green marketing programs that provide
better environmental solutions as a result.
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 Six Major Environmental Forces
• Technological
In the technological arena, marketers should take account of
the accelerating pace of technological change,
opportunities for innovation, varying R&D budgets, and
the increased governmental regulation brought about by
technological change.

• Political-legal
In the political-legal environment, marketers must work
within the many laws regulating business practices and
with various special-interest groups.

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 What is a
Marketing Information System (MIS)?
A marketing information system
consists of people, equipment, and
procedures to gather, sort, analyze,
evaluate, and distribute needed, timely,
and accurate information to
marketing decision makers.

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 Table 3.1 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 are the four most helpful improvements that
could be made in the present marketing
information system?

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 COMPONENTS OF A MODERN
MARKETING INFORMATION SYSTEM

The major responsibility for identifying significant

marketplace changes falls to the company’s marketers. More
than any other group in the company, they must be the trend
trackers and opportunity seekers. Although every manager in
an organization needs to observe the outside environment,
marketers have the following advantages: They have
disciplined methods for collecting information and they
spend more time interacting with customers and observing
competition.

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 Components of MIS

MIS has three components:

(a)an internal records system, which includes information on the order-
to-payment cycle and sales information systems
(b)a marketing intelligence system, a set of procedures and sources used
by managers to obtain everyday information about pertinent
developments in the marketing environment
(c) a marketing research system that allows for the systematic design,
collection, analysis, and reporting of data and findings relevant to a
specific marketing situation.

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 Components of MIS
Internal record:
The most basic information system used by marketing managers is the
"internal records system" or internal database". Internal records
information "is information gathered from sources within the
organization to evaluate marketing performance and to detect marketing
problems and opportunities. This information may be largely derived
from accounting database and may include reports on sales, prices,
accounts opening and closures, customers 'financial information and so
on. Marketing managers rely on internal reports related to customer
orders, sales, price levels, cost, inventory levels, receivable and payables.

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 Components of MIS
Marketing Intelligence System
While the internal records system supplies marketing managers with
"results data", the marketing intelligence system supplies managers with
"happenings data". Marketing intelligence information is everyday
information about developments in the marketing environment that helps
marketing managers prepare and adjust marketing plans.
In many respects the marketing intelligence system can be regarded as
the "external database" of MIS because it covers all types of information
collected from external sources. It may take the form of press cuttings,
trade journals, discussions and information from competing
organizations or subscriptions to some specified external database.

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 Components of MIS
Marketing Research System
The marketing research system is that component of the MIS which
gathers information by means of deliberate planned focused studies on
specific marketing problems facing the organization. Besides information
from internal and marketing intelligence sources, marketing managers
often need focused studies of specific problems and opportunities. For
example, they may need a market survey, a product-preference test, a
sales forecast by region or an advertising-effectiveness study. Marketing
research information is used to identify and define marketing
opportunities and problems, to generate, refine, and evaluate marketing
actions; to monitor marketing performance; and to improve
understanding of the marketing process.

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 Internal Records and
Marketing Intelligence
• Order-to-payment cycle
• Sales information system
• Databases, warehousing, data mining
• Marketing intelligence system

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 Order-to-payment cycle

The heart of the internal records system is 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. Because customers favor firms that can
promise timely delivery, companies need to perform
these steps quickly and accurately.

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 Sales Information Systems 

Marketing managers need timely and accurate

reports on current sales. Marketers must
carefully interpret sales data, however, to avoid
drawing wrong conclusions.
Example:
Walmart operates a sales and inventory data
warehouse that captures data on every item for
every customer, every store, every day and
refreshes it every hour.

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 Databases, Data Warehousing, and
Data Mining 
A customer database is an organized collection of comprehensive
information about individual customers or prospects that is
current, accessible, and actionable for lead generation, lead
qualification, sales, or customer relationship management.
Database marketing is the process of building, maintaining, and
using customer databases and other databases (products,
suppliers, resellers) to contact, transact with, and build
relationships with customers. Information captured by the
company is organized into a data warehouse where marketers can
capture, query, and analyze data to draw inferences about
individual customers’ needs and responses. Marketing analysts
use data mining to extract from the mass of data useful insights
about customer behavior, trends, and segments.

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 Databases, Data Warehousing, and
Data Mining 
Companies warehouse these data for easy accessibly
to decision makers.
By hiring analysts skilled in sophisticated statistical
methods, companies can “mine” the data and garner
fresh insights into:
1) Neglected customer segments.
2) Recent customer trends.
3) Other useful information.
C) The customer information can be cross-tabbed with
product and salesperson information to yield still
deeper insights.

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 Steps to Improve Marketing
Intelligence
• Train sales force to scan for new developments
• Motivate channel members to share
intelligence
• Network externally
• Utilize a customer advisory panel
• Utilize government data sources
• Collect customer feedback online
• Purchase information

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 Table 3.2
Secondary Commercial Data Sources
• Nielsen
• MRCA
• Information Resources
• SAMI/Burke
• Simmons
• Arbitron

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 Sources of Competitive Information

• Independent customer goods and service

review forums
• Distributor or sales agent feedback sites
• Combination sites offering customer reviews
and expert opinions
• Customer complaint sites
• Public blogs

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 Needs and Trends

• Fads
• Trends
• Megatrends

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 Needs and Trends
Successful companies recognize and respond profitably to unmet needs and trends.

Fads
A fad is “unpredictable, short-lived, and without social, economic, and political
significance.”

Trend
A trend is a direction or sequence of events that has some momentum and durability.
Trends are more predictable and durable than fads. A trend reveals the shape of the
future and provides many opportunities.

Megatrends
Megatrends have been described as “large social, economic, political, and technological
changes [that] are slow to form, and once in place, they influence us for some time—
between seven and ten years, or longer.
Trends and megatrends merit close attention. To help marketers’ spot cultural shifts that
might bring new opportunities or threats, several firms offer social-cultural forecasts.

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 Environmental Forces

• Demographic
• Economic
• Socio-cultural
• Natural
• Technological
• Political-legal

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 Population and Demographics

• Population growth • Educational groups

• Population age mix • Household patterns
• Ethnic markets • Geographical shifts

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 Economic Environment

• Income Distribution
• Savings, Debt, and Credit

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 Social-Cultural Environment

• Views of themselves
• Views of others
• Views of organizations
• Views of society
• Views of nature
• Views of the universe

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 Table 3.3 Most Popular
American Leisure Activities
• Reading • Computer activities
• TV Watching • Gardening
• Spending time with • Renting movies
family • Walking
• Going to movies • Exercise
• Fishing • Listening to music

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 Natural Environment

• Shortage of raw materials

• Increased energy costs
• Anti-pollution pressures
• Governmental protections

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 Technological Environment

• Pace of change
• Opportunities for innovation
• Varying R&D budgets
• Increased regulation of change

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