Marketing Information System and Forecasting

• A Marketing Information System (MIS) comprises people, procedures, and tools used to analyze and distribute accurate information to marketing decision-makers.
• An effective MIS relies on internal company records, marketing intelligence activities, and marketing research.
• An MIS should balance what managers think they need, what they actually require, and what is economically feasible.
• MIS committees can interview a cross-section of marketing managers to identify what information is needed.

Forecasting and Demand Measurement

• Companies must assess the size, growth rate, and profit potential of new opportunities.
• Finance departments use sales forecasts to secure funding for investments and operations.
• Inaccurate sales projection will lead to inventory imbalances.

Measures of Market Demand

• Potential Market: Those interested but lacking sufficient income.
• Available Market: Those with interest, income, and access.
• Target Market: The qualified available market that a company decides to pursue.
• Penetrated Market: Consumers already purchasing the company's products.

A Vocabulary for Demand Measurement

• Market Demand: The total volume purchased by a defined group, in a specific time frame and area, under certain environmental conditions and marketing programs.
• Market Forecast: The expected market demand corresponding to a specific level of marketing expenditure.
• Market Potential: The upper limit of market demand as industry marketing expenditure approaches infinity, given a specific marketing environment.
• Company Demand: The estimated share of market demand a company can expect at different marketing effort levels, influenced by perceptions of its products and communications relative to competitors.
• Company Sales Forecast: The projected level of company sales based on a chosen marketing plan within an assumed environment.
• Sales Quota: A sales target set for a product line, division, or sales representative.
• Sales Budget: A conservative estimate of expected sales volume.
• Company Sales Potential: The sales limit approached by company demand as its marketing efforts increase relative to competitors.

Estimating Current Market Demand

• Total Market Potential: The maximum sales attainable by all firms in an industry during a specific period, under given conditions, which can be calculated by multiplying the number of potential buyers by the average quantity each purchases and the price.
• Area Market Potential: Assessing market potential across different regions.
• Market Build-Up Method: Identifying all potential buyers in a market and estimating their potential purchases.
• Multiple-Factor Index Method: Used by firms to estimate area market potentials using a weighted index, especially when customers are too numerous to list.
• Companies need to identify competitors and estimate their sales volumes.

Estimating Future Demands

• Forecasts are based on surveys of what people say, what people do, or what they have done.
• Survey of Buyers’ Intentions Forecasting: Predicting buyer behavior under specific conditions.
• Composite of Sales Force Opinions: Sales representatives estimate future sales; however, this can be unreliable due to optimism or pessimism.
• The company will provide incentives or assistance to encourage better estimations.
• Market-Test Method: Direct market tests help forecast new product sales or establish sales in new channels or territories.
• Expert Opinion: Seeking forecasts from dealers, distributors, or marketing consultants.
• Past-Sales Analysis: Using past sales data to develop forecasts, where time-series analysis breaks down trends, cycles, seasonal variations, and erratic movements.

Conducting Market Research

• The marketing research process includes defining the problem, developing the research plan, collecting information, analyzing it, presenting findings, and making decisions.

Define the Problem and Research Objectives

• It is important not to define the problem too broadly or narrowly for the marketing researcher.
• Exploratory Research: Aims to clarify the problem's nature and suggest potential solutions.
• descriptive Research: Quantifies demand.
• Causal Research: Tests cause-and-effect relationships.

Develop the Research Plan

• To design an efficient plan for information gathering, you must consider:
• Secondary Data: Data collected for another purpose that already exists.
• Primary Data: Freshly gathered data for a specific purpose of a specific research project.
• Observational Research: Gathering data by unobtrusively watching relevant actors and settings.
• Focus Group Research: Gathering 6-10 participants to discuss topics of interest at length.
• Survey Research: Assessing people's knowledge, beliefs, preferences, and satisfaction.
• Behavioral Research: Analyzing customer purchasing behavior through store scanning data, and customer databases.
• Experimental Research: Establishing cause-and-effect relationships by eliminating alternative explanations of findings.
• Research Instruments:
• Questionnaires:
• Closed-End Questions: Provide pre-specified answers for easier interpretation.
• Open-End Questions: Allow respondents to answer freely, revealing more insight.
• Qualitative Measures: Methods for gauging consumer opinion, like unstructured measurement approaches that permit a range of responses.
• Technological Devices: Using tools like skin sensors, brain wave scanners, and full body scanners to measure consumer responses.
• Sampling Plan:
• Sampling Unit: Determining who should be surveyed, using a sampling frame to ensure everyone in the target population has an equal chance of being sampled.
• Sample Size: Determining how many people to survey.
• Sampling Procedure: Determining how respondents should be chosen.
• Probability sampling allows calculation of confidence limits to reduce sampling error and make the sample more representative.

Contact Methods:

• Mail Contacts: Uses postal questionnaires to reach individuals who avoid personal interviews; ensures unbiased responses though it often yields a low and slow response rate.
• Telephone Contacts: Enables quick data collection and allows clarifications of questions; offers higher response rates compared to mail yet faces challenges due to increasing consumer resistance to telemarketing.
• Personal Contacts: The most adaptable but costly approach, encompassing scheduled interviews alongside incentives and intercept interviews held in public settings; demands extensive supervision and is subject to interviewer bias.
• Online Contacts: A progressively utilized method utilizing online surveys and product evaluations conducted via websites or banners, typically with incentives; facilitates rapid and broad data collection for various marketing research purposes.

Collect the Information

• Data collection is costly and error-prone, with issues in marketing research being unresponsive or dishonest respondents as well as biased interviewers

Analyzing the Information

• Data analysis involves summarizing data, computing averages, and using statistical techniques to test hypotheses and validate conclusions.

Present the Findings

• Providing insights to guide marketing strategies.

Make the Decision

• Decision based on research insights, requiring further study, while marketing decision support systems help organizations turn information into action.