Marketing and Market Research in English - Class 1 PDF

Marketing and Market Research in English Dr. Benjamin KAKAVAND  Marketing Research and Analysis Level: Master 1 Duration: 20h CM + 8h TD Language: English Evaluation: In class activities – Individual Assessment (15%) Case Study Presentation (25%) Mi...

Marketing and Market Research in English Dr. Benjamin KAKAVAND  Marketing Research and Analysis Level: Master 1 Duration: 20h CM + 8h TD Language: English Evaluation: In class activities – Individual Assessment (15%) Case Study Presentation (25%) Midterm Exam (30%) Final Exam (30%)  References Gewal D., Levy M., Lichti S., (2023), Marketing (6th edition) McGraw. Warren J. Keegan and Mark C. Green (2023), Global Marketing (10th edition). Pearson.  Course Syllabus Analyzing the Marketing Environment Economic Environment Analysis for Marketing Strategy Development Marketing Research Global Market Research Pricing Concepts and strategies: Establishing Value Strategic Elements of Competitive Advantage Analyzing the Marketing Environment Learning Objectives Outline how the factors in a firm’s microenvironment influence its marketing strategy Identify the factors in a firm’s macroenvironment and explain how they influence the overall marketing strategy Identify important social and natural trends that impact marketing decisions  Marketing Environment Defined Marketing Environment Definition: The factors and forces outside marketers’ direct control that affect marketing management’s ability to develop and maintain successful transactions with target customers. Micro environments Macro environments Component of Marketing Environment Component of Marketing Environment  Marketing Environment Defined Macro Environment The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors are: economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. regulations. Micro Environment The micro-environment affects the organization directly. It refers to the environment that most closely linked to the firm. This environment is also not under the full control of business. The business can influence this environment.  Microenvironmental Factors Company Capabilities Inthe firm’s microenvironment, the first factor that affects the consumer is the firm itself. Successful marketing firms focus their efforts on satisfying customer needs that match their core competencies. Example: Apple originally rested in the design, manufacture, distribution, and promotion of Macintosh computers. But Apple has successfully leveraged its core competency in the digital audio player arena with its iPod, iPhone, and iPad.  Microenvironmental Factors Competition Greater competition may mean more choices for consumers, which influences their buying decisions. Marketersunderstand their firm’s competitors, including their strengths, weaknesses, and likely reactions to the marketing activities their own firm undertakes. Firms use competitive intelligence (CI) to collect and synthesize information about their position with respect to their rivals. CI enables companies to anticipate changes in the marketplace rather than merely react to them.  Microenvironmental Factors Corporate Partners Few firms operate in isolation. E.g., automobile manufacturers collaborate with suppliers of sheet metal, tire manufacturers, component part makers, unions, transport companies, and dealerships to produce and market their automobiles successfully. Dell, which makes its own computers and sells them to customers, must purchase components, consulting services, advertising, and transportation from others. Partiesthat work with the focal firm are its corporate partners. Corporate partners work with the firm to create a single, efficient manufacturing system.  Macroenvironmental Factors 1. Culture A second social force, culture, incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group. Many elements of culture influence consumer buying patterns, monitoring national and global cultural trends is important in marketing. Country Culture: The visible nuances such as artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences. The subtle aspects of culture generally are trickier to identify and navigate. Regional Subcultures: The region in which people live in a particular country affects the way they react to different cultural rituals, or even how they refer to a particular product category.  Macroenvironmental Factors 2. Demographics is the study of the characteristics of a human population. These characteristics include population size, growth rate, gender, marital status, ethnicity, income, and so forth. Gross Income: The total amount of money made in one year by a person, household, or family unit is referred to as gross income. Point: Average gross family income in Canada is slightly over $72,000.  Macroenvironmental Factors Example of Canadian Population Studies of the demographic characteristics of the Canadian population suggest several important trends. The Canadian population is over 35 million and is expected to grow to 44 million by 2050. It is a population that is growing older and more ethnically diverse. The median age will rise from 40 years of age to almost 45 years of age by 2050.8 With Canada’s declining birth rate, the principal source of growth in the Canadian population will be from immigration, which will add even more diversity to the Canadian population. Ifcurrent trends in life expectancy, birth rates, and immigration continue, niche markets based on age, life stage, family structure, geographic location, and ethnicity will become increasingly important.  In-Class Activity (Session 1) On the basis of the demographic characteristics of the Canadian population by 2050, which type of products and services will be demanded in the market of Canada. Try to develop your answer by providing examples.  Macroenvironmental Factors 3. Technological Advances Technology refers to inventions or innovations from applied science or engineering research. Each new wave of technological innovation can replace existing products, services, and companies.  Macroenvironmental Factors Some of the more dramatic technological innovation occurring now include the following: Connectivity will grow to include all customers, homes, vehicles, appliances, and mobile devices to create the “Internet of Things.” Computers will develop all five senses to create intelligent data collection and personalized predictive capabilities. Green technologies such as smart grid electricity services, online energy management, and consumer- generated energy. 3D technologies will move from movie theatres and televisions to many new and useful applications.  Macroenvironmental Factors Technology has also had a dramatic impact on the operations of marketing organizations. First, the development of online capabilities created the marketspace, an information- and communication-based electronic exchange environment occupied by sophisticated computer and telecommunication technologies and digital offerings. Second, these capabilities led to electronic commerce (e- commerce), or the activities that use electronic communication in the inventory, promotion, distribution, purchase, and exchange of products and services.  Macroenvironmental Factors 4. Economic Situation Particular concern at the macroeconomic level is the inflationary or recessionary state of the economy, whether actual or perceived by consumers or businesses. In inflationary economy, the cost to produce and buy products and services escalates as prices increase.  Macroenvironmental Factors From a marketing standpoint, if prices rise faster than consumer incomes do, the number of items consumers can buy decreases. Recession is a time of slow economic activity. Production, unemployment rises, and many consumers have less money to spend.  Macroenvironmental Factors 5. Regulatory Forces Marketing and broader business decisions are constrained, directed, and influenced by regulatory forces. Regulation consists of restrictions that laws place on business with respect to the conduct of its activities. Protecting Competition and Consumers Legislation and regulations exist to protect and encourage a competitive environment.  Macroenvironmental Factors c. Consumerism Regulation by government and self-regulation by industry help in protecting the consumer in the marketplace. But the consumer can also play a direct and active role. Consumerism is a movement to increase the influence, power, and rights of consumers in dealing with institutions.  Macroenvironmental Factors 6. Social and National Trends Social and natural trends shape consumer values around the world. These trends tend to change over time in their popularity and importance, and savvy marketers work hard to identify emerging trends to understand whether they present an opportunity or pose a threat to their business. a. Greener Consumers: Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise. b. Privacy Concerns: Internet has created an erupting volcano of accessibility to consumer information, improvements in computer storage facilities and the manipulation of information.  Macroenvironmental Factors c. Time-Poor Society: It is complicated by several trends that increase the difficulty of grabbing those markets’ attention. First,in the majority of families, both parents work, and the kids are busier. That means Families have less time for leisure and to spend with family. Second, consumers have hundreds of shows and programs available to them through TV, radio, DVDs, smartphones, pcs, and the Internet. Third, many consumers attempt to cope with their lack of leisure time by multi-tasking: watching TV or listening to music while talking on the telephone or doing homework.  Macroenvironmental Factors d. Health and Wellness Concerns: Health concerns, especially those pertaining to children, are prevalent, critical, and widespread. Example: In Canada, 60.1 percent of adult men and 44.2 percent of adult women are categorized as obese or overweight. In the past 20 years, child obesity has doubled, and teenage obesity tripled in North America  Macroenvironmental Factors / Competitive Forces 1. Forms of competition a. Pure competition, in which every company has a similar product. Companies that deal in commodities common to agribusiness (for example, wheat, rice, and grain) often are in a pure competition position, in which distribution is important but other elements of marketing have little impact. b. Monopolistic competition, many sellers compete with their products on a substitutable basis. For example, if the price of coffee rises too much, consumers may switch to tea.  Macroenvironmental Factors / Competitive Forces c. Oligopoly, when a few companies control the majority of industry sales. There are few sellers, price competition among firms is not desirable because it would lead to reduced revenue for all producers. Instead, non price competition is common, competing on other dimensions, such as product quality, distribution, and/or promotion. Canada is sometimes referred to by some economists as the “land of oligopoly” because it has several major industries that can be considered oligopolistic, including the airline industry and the banking industry. d. Monopoly, occurs when only one firm sells the product or service. It has been common for producers of goods and services considered essential to a community: water, electricity, or telephone service. Point: Marketing plays a small role in a monopolistic setting because it is regulated by a province or the federal government.  Macroenvironmental Factors / Competitive Forces 2. Components of Competition In developing a marketing program, companies must consider the factors that drive competition: Entry, Bargaining power of buyers and suppliers, Existing competition, and substitution possibilities. Note: These may be used to create a barrier to entry, increase brand awareness, or intensify a fight for market share. a. Entry A firm must assess the likelihood of new entrants. Additional producers increase industry capacity and tend to lower prices. Barriersto entry can be in the form of capital requirements, advertising expenditures, product identity, distribution access, or switching costs.  Macroenvironmental Factors / Competitive Forces b. Power of Buyers and Suppliers Powerful buyers exist when they are few in number, there are low switching costs, or the product represents a significant share of the buyer’s total costs. Itleads the buyer to exert significant pressure for price competition. c. Existing Competitors and Substitutes Competitive pressures among existing firms depend on the rate of industry growth. In slow-growth settings, competition is more heated for any possible gains in market share. High fixed costs also create competitive pressures for firms to all production capacity. Example, airlines offer discounts for making early reservations and charge penalties for changes or cancellations in an effort to all seats, which represent a high fixed cost.  Macroenvironmental Factors / Competitive Forces 3. Small Businesses as Competitors Small businesses make up the majority of the competitive landscape for most businesses. In Canada there are over 2.7 million small- and medium-sized enterprises (SMEs), and they generate half of the country’s total gross domestic product (GDP), employ six out of ten Canadians, and create the bulk of all new jobs. Economic growth in Canada is largely tied to the activities of SMEs, and entrepreneurs who start new businesses provide new competition for existing large companies. Important: A small business is a firm that has fewer than 100 employees while a medium-sized business has more than 100 but less than 500 employees. Currently, 98 percent of all businesses in Canada are small businesses.  Macroenvironmental Factors / Competitive Forces 4. Pure-Play Online Competitors Many traditional companies have a presence in the new marketspace or online world, there are a host of companies that exist only in this new space: pure-play online competitors. Many of these competitors are also small, entrepreneurial start-ups that target specialized or niche markets.  Macroenvironmental Factors Example: An environmental scan of Canada’s marketplace  Case Study: A Next-Generation Cleaner (Session 1) Questions: 1. What macroenvironmental factors and consumer trends does Seventh Generation respond to most effectively? 2. If it were to perform an environmental scan now, could you identify any factors or consumer trends it should consider?  Economic Environment Analysis for Marketing Strategy Development Learning Objectives Compare and contrast the main types of economic systems that are found in different regions of the world. Explain the categories of economic development. Discuss the significance of balance of payments statistics for the world’s major economies. Identify the countries that are the world's leading exporters.  An Overview of the World Economy In the early 20th century economic integration was at 10%; today it is 50%. European Union (EU) and North America Free Trade Area (NAFTA) / The United States-Mexico-Canada Agreement (USMCA) are very integrated. Global competitors have displaced or absorbed local ones.  Economic Systems Traditionally, economists identified four main types of economic systems: market capitalism, centrally planned socialism, centrally planned capitalism, and market socialism.  Market Capitalism Individuals and firms allocate resources Production resources are privately owned Driven by consumers Government’s role is to promote competition among firms and ensure consumer protection  Centrally Planned Socialism Opposite of market capitalism State holds broad powers to serve the public interest; decides what goods and services are produced and in what quantities Consumers can spend only what is available Government owns entire industries and controls distribution Demand typically exceeds supply Little reliance on product differentiation, advertising, pricing strategy. For decades, the economies of China, the former Soviet Union, and India functioned ­according to the tenets of centrally planned socialism. Centrally Planned Capitalism and Market Socialism In reality, market capitalism and centrally planned socialism do not exist in “pure” form. In most countries, to a greater or lesser degree, command and market resource allocation are practiced simultaneously, as are private and state resource ownership. Note: The role of government in modern market economies varies widely. Centrally planned capitalism, in which command resource allocation is utilized extensively in an overall environment of private resource ownership. Market socialism, in which market-allocation policies are permitted within an overall environment of state ownership. Centrally Planned Capitalism and Market Socialism In Sweden, the government controls two-thirds of all expenditures, resource allocation is more “voter” oriented than “market” oriented. Sweden’s “welfare state” is based on a hybrid economic system that incorporates elements of both centrally planned socialism and capitalism. The Swedish government is embarking on a privatization plan that calls for selling its stakes in some of the businesses. Western Market Systems  Economic Freedom Economic Freedom Rankings of economic freedom among countries – “free” “mostly free” “mostly unfree” “repressed” Variables considered include such things as: Trade policy Taxation policy Capital flows and foreign investment Banking policy Wage and price controls Property rights Black market The Index of Economic Freedom 2021 Stages of Market Development The World Bank has defined four categories of development using Gross National Income (GNI) as a base Stages of Market Development Stages of Market Development Gross national product (GNP) or (GNI) is an estimate of total value of all the final products and services turned out in a given period by the means of production owned by a country's residents. GNI Formula: Y = C + I + G + X + Z. That stands for GNP = Consumption + Investment + Government expenditure + X (net exports) + Z (net income earned by domestic residents from overseas investments - net income earned by foreign residents from domestic investments). Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period Point: GDP is a comprehensive scorecard of the country’s economic health.  Income Countries Low-Income Countries Limited industrialization High percentage of population in farming High birth rates Low literacy rates Heavy reliance on foreign aid Political instability and unrest Example: Sub-Saharan Africa, Uzbekistan and Turkmenistan  Income Countries Lower-Middle-Income Countries Rapidly expanding consumer markets Cheap labor Mature, standardized, labor- intensive industries like footwear, textiles and toys Example: India, China  Income Countries Upper-Middle-Income Countries Rapidly industrializing, Less agricultural employment Increasing Urbanization Rising wages High literacy rates and advanced education Lower wage costs than advanced countries. Examples: Brazil, Russia, Malaysia, Chile, Hungary, Mexico  Income Countries High-Income Countries They are known as advanced, developed, industrialized, or post-industrial countries Sustained economic growth through disciplined innovation Service sector is more than 50% of GNI Importance of information processing and exchange Ascendancy of knowledge over capital, intellectual over machine technology, scientists and professionals over engineers and semiskilled workers Future oriented – Importance of interpersonal relationships  Discussion Question (Session 1) Identify the current stage of economic development for each BRICS nation. According to the Index of Economic Freedom, identify where the BRICS nations are ranked. Why are Brazil, Russia, India, China, and South Africa (BRICS) are indicated and discussed in different aspect of International business?