MME 311 Midterm Notes PDF

**MARKETING INFORMATION SYSTEM** - Is a MIS designed to support marketing decision making - It brings together many different kinds of data, people, equipment and procedures to help an organization make better decisions - Kotler defined it as "*people, equipment, and procedures to gathe...

**MARKETING INFORMATION SYSTEM** - Is a MIS designed to support marketing decision making - It brings together many different kinds of data, people, equipment and procedures to help an organization make better decisions - Kotler defined it as "*people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers*" **COMPONENTS OF MARKETING INFORMATION SYSTEM** - Internal Records - Marketing Intelligence - Marketing Research - Marketing Decision Support System (MDSS) A. **[INTERNAL RECORDS]** - These may be collected from the documents such as the invoices, transmit copies, billing documents prepared by the firms once they receive the order for the goods and services from the customers, dealers or the sales representative **Databases:** 1. [Customer database] -- wherein the complete information about the customer's name, address, phone number, frequency of purchase, financial position, etc., is saved 2. [Product database] -- wherein the complete information about the product's price, features, variants, is stored 3. [Salesperson database] -- wherein the complete information about the salesperson, their name, address, phone number, sales target, etc., is saved B. **[MARKETING INTELLIGENCE]** - Is used by marketing managers to sift information from the external environment (like magazines, trade journals, etc.) to use in the decision making - It provides information about current marketing environment and changing conditions in the market - Also includes the information about the competitor's pricing strategy, change in the customer's tastes and preferences, new products launched in the market, promotion strategy of the competitor, etc. - Information collected must first be evaluated and arranged in proper order Information gathered can be used in environmental scanning in, but not limited to, the following ways: 1. [Unfocused scanning] -- the manager, by virtue of what they read, hear and watch, exposes themselves to information that may prove useful; there is no specific purpose in mind 2. [Semi-focused scanning] -- manager here narrows the range of media that is scanned; manager may focus more on some aspects and pay less attention to other aspects 3. [Informal search] -- this describes the situation where a fairly limited and unstructured attempt is made to obtain information for a specific purpose 4. [Formal search] -- a purposeful search after information in some systematic way; the information will be required to address a specific issue C. **[MARKETING RESEARCH]** - Is the systematic collection, organization, analysis and interpretation of the primary or the secondary data to find out the solution/s to the marketing problem/s - Information gathered is specific and can be used only for a specific purpose **Primary and Secondary Data** 1. [Primary data] -- collected first hand specially for the purpose of study; collected for addressing the problem at hand a. Salesmen b. Dealers c. Consumers 2. [Secondary data] -- data that have already been collected by and readily available from other sources; it is cheaper and more quickly obtainable and may be available when the primary data cannot be obtained at all **Sources:** - Business magazines - Journals - Government publications and reports - Trade associations - Published survey of markets - Publications of foreign governments and international agencies - Other suppliers of external data D. **[MARKETING DECISION SUPPORT SYSTEM (MDSS)]** - Tools which help the marketing managers to analyze data and to take better marketing decisions - They include hardware and software **Characteristics of a good MDSS** 1. [Interactive] -- process of interaction should be simple and direct 2. [Flexible] -- should be able to present the available data in either discrete or aggregate form 3. [Discovery oriented] -- MDSS should not only assist managers in solving the existing problems but should also help them to probe for trends and ask new questions 4. [User friendly] -- it should be easy for the managers to learn and use the system **ENVIRONMENTAL SCANNING AND ENVIRONMENTAL MANAGEMENT** **Major forces in the Macroenvironment** - Political - Economic - Socio-cultural - Demographic - Ecological - Technological A. **[POLITICAL ENVIRONMENT]** - Includes laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society - It can create advantages and opportunities, and it can place obligations and duties on organizations **Various forms of legislation regulate business such as:** 1. Governments develop public policy to guide commerce 2. Increasing legislation to: a. Protect companies from each other b. Protecting consumers from unfair business practices c. Protecting interests of society against unrestrained business behavior 3. Changing government agency enforcement 4. Increased emphasis on ethics and socially responsible actions B. **[ECONOMIC ENVIRONMENT]** - These include national and global interest rates and fiscal policy - This dictates how consumers, suppliers and other organizational stakeholders such as suppliers and creditors behave within society EX. - An economy undergoing recession will have high unemployment, low spending power and low stakeholder confidence; conversely, a booming or growing economy will have low unemployment, high spending power and high stakeholder confidence - These factors deal with function like purchasing power parity, income level, savings level and interest rates, among many others C. **[SOCIO-CULTURAL ENVIRONMENT]** - Focuses attention on forces within society such as family, friends, colleagues, neighbors and the media - These affect the attitudes, interests and opinions - These forces shape people as they are, the way they behave and ultimately what they purchase - Organizations must be able to offer products and services that aim to complement and benefit people's lifestyle and behavior - Socio-cultural environment of each country differs from one another **Dynamic Cultural Characteristics** 1. *Persistence of cultural values* -- core beliefs and values passed on from parents to children and are reinforced by schools, churches, business, and government; *secondary beliefs and values* are more open to change 2. *Shifts in secondary cultural values* -- since they are more open to change, marketers want to spot them and be able to capitalize on the change potential; society's major cultural views are expressed in: a. *People's views of themselves* b. *People's views of others* c. *People's views of organization* d. *People's views of society* e. *People's views of nature* f. *People's views of the universe* D. **[DEMOGRAPHIC ENVIRONMENT]** - Demography is the study of human populations in terms of size. Density, location, age, sex, race, occupation, and other statistics - It is of major interest to marketers being associated with changing nature and volume of population E. **[ECOLOGICAL ENVIRONMENT]** - It consists of natural resource composition in a given country **Areas of concern in ecological environment** 1. *Shortages of raw materials* 2. *Increased pollution is a worldwide problem* 3. *Government intervention in natural resource management* 4. *Environmentally sustainable strategies* F. **[TECHNOLOGICAL ENVIRONMENT]** - The internet and connectivity are changing the face of business - More people are doing business online - Organization must keep up with the innovation and offer products - A faster exchange of information can benefit businesses as they are able to react quickly to changes within their operating environment **ANALYZING THE COMPETITIVE ENVIRONMENT** - Competitor analysis is a crucial part of overall strategy and should include SWOT analysis, prospective competitors, and the major forces in the macroenvironment **5 Competitive Forces by Michael Porter** - Threat of new potential entrants - Threat of substitute products - Bargaining power of suppliers - Bargaining power of buyers - Rivalry among competitors A. **[THREAT OF NEW POTENTIAL ENTRANTS]** - Refers to potential competitors that are not currently in the market but have capabilities and resources to compete B. **[THREAT OF SUBSTITUTE PRODUCTS]** - These are identical or similar products from different manufacturers that effectively satisfy a customer's needs at a lower price and can lower industry attractiveness and profitability because they restrict price levels C. **[BARGAINING POWER OF SUPPLIERS]** - Suppliers can control the supply chain and heavily influence pricing and terms when there are few substitutes in the market - A supplier's bargaining power increases if the following factors apply: - Switching suppliers is too costly - A supplier's input cannot be provided by anyone else - The input is an integral component of a company's product D. **[BARGAINING POWER OF BUYERS]** - May be strong or weak - Buyers are strong when they buy in large volume, substitute products are available or the supply chain is varied E. **[RIVALRY AMONG COMPETITORS]** - Can range from low to extreme, and the level of intensity refers to the extent to which businesses within an industry put pressure on one another - Intensity can pose a threat to an industry as a whole by limiting profit potential when competitors forcefully target one another's markets and aggressively price products to gain the business **MARKET OPPORTUNITY ANALYSIS** - This is a kind of business planning that emphasizes on discovering the future opportunities and evaluating the company's technological, financial and competitive willingness to make use of them **Procedure involved in analysis of market opportunity** 1. *Identify what's currently happening in the business environment* - Look into both legal and regulatory situations - Look at economic conditions and trends - Research latest technology 2. *Define the industry and determine the outlook* - State exactly the industry that is operating within, and make forecasts on the size of the market 3. *Look into the details of competitors* - Know your competitor's products inside and out - Identify relative strengths and weaknesses 4. *Describe the target market* - Construct a profile of its ideal customer, so that it can adequately focus its sales and marketing efforts to reach its customers 5. *Create projections* - Use a variety of techniques that build on all of the information in the marketing plan to set a forecast of sales - This includes best and worst case scenario analysis, any intuition or "gut-feelings" it has about new markets, and compare any results it has seen to date **ETHICS AND SOCIAL RESPONSIBILITY** - *Ethics* is likely to center on the individual or marketing group decision, while *social responsibility* takes into concern the entire consequence of marketing practices in society **6 Ethical Values That Marketers Are Expected To Advocate** 1. Honesty 2. Responsibility 3. Fairness 4. Respect 5. Transparency 6. Citizenship **4 Levels of Social Responsibility** (https://online.hbs.edu/blog/post/types-of-corporate-social-responsibility) 1. *Environmental responsibility* - Is the belief that organizations should behave in as environmentally friendly a way as possible. It's one of the most common forms of CSR. Some companies use the term *"environmental stewardship"* to refer to such initiatives. - Companies that seek to embrace environmental responsibility can do so in several ways: i. Reducing harmful practices: Decreasing pollution, greenhouse gas emissions, the use of single-use plastics, water consumption, and general waste ii. Regulating energy consumption: Increasing reliance on renewables, sustainable resources, and recycled or partially recycled materials iii. Offsetting negative environmental impact: Planting trees, funding research, and donating to related causes 2. *Ethical responsibility* - Ethical responsibility is concerned with ensuring an organization is operating in a fair and ethical manner. Organizations that embrace ethical responsibility aim to practice ethical behavior through fair treatment of all stakeholders, including leadership, investors, employees, suppliers, and customers. 3. Philanthropic responsibility - Philanthropic responsibility refers to a business's aim to actively make the world and society a better place. - In addition to acting ethically and environmentally friendly, organizations driven by philanthropic responsibility often dedicate a portion of their earnings. 4. Economic responsibility - Economic responsibility is the practice of a firm backing all of its financial decisions in its commitment to do good. The end goal isn't just to maximize profits, but also to make sure the business operations positively impact the environment, people, and society.