Chapter 3: Collecting Information and Forecasting Demand

BMGT 411: Chapter 3

• Marketing Information System: Consists of people, equipment, and procedures to gather, sort, analyze, evaluate and distribute needed, timely information to marketing decision makers

• Internal Company Records: CRM Systems are an effective system for marketers

• Marketing Intelligence: Competitive and Industry Analysis

• Marketing Research: Primary and Secondary

American Eagle Outfitters

Types of Internal Sales Tools

BMGT 411: Chapter 3• Examples of Internal Sales Tools at American Eagle Outfitters

• Raw Sales Data

• Cost per Transaction or Basket Size

• Conversion

• Repeat Visits

• STS Sales

• Seasonal Sales

Marketing Research

def: Systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation

The Marketing Research Process

BMGT 411: Chapter 3• Step #1: Justify the need for marketing research. If there is no need, kill the project

here.

• How will this marketing research help you improve sales?

• How will the marketing research help solve a problem?

• How will the marketing research identify a target market?

Four Considerations

1. Potential usefulness of the results

2. Management attitudes towards marketing research

3. Resources available for implementation

4. Costs vs. benefits

BMGT 411: Chapter 3• Step #2: Define the problem and research objectives

• Problem and objectives should be very clear

• Problem or objectives should help define what type of research is needed

Types of Research

1. Exploratory: To investigate a general problem and possible solutions

2. Descriptive: Very specific to help forecast demand or likeness

3. Causal: To test a cause and effect relationship when adding variables

BMGT 411: Chapter 3• Step #3: Identify data needs

• What type of information are you looking for

• Scrutinize the research purpose

• List the types of data that will fulfill this purpose

BMGT 411: Chapter 3• Step #4: Identify data sources. If the data can be acquired using existing

secondary research, you may be able to skip to step #9

• Primary Data

• Data obtained directly from consumer to fulfill a specific purpose

• More expensive approach

• Secondary Data

• Data that are readily available from other sources

• Internal or external

• Often less expensive to use

BMGT 411: Chapter 3• Step #5: Choose an appropriate research design and data collection method

Research Proposal

• Serves as a blueprint for the execution of the product

• Explains

• Purpose and scope of the project

• The specific design of the project

• Sample design

• Data collection procedures

• The data analysis plan

• The project timetable

BMGT 411: Chapter 3• Step #5: Main Types of Marketing Research Approaches

Quantitative:

• Survey Research

• Behavioral Data

• Experimental research

Qualitative:

• Observation

• Focus Groups

BMGT 411: Chapter 3• Step #6: Design the Research Instrument of Form

1. Questionnaires: Most common due to flexibility

2. Qualitative Measures: Unstructured and often revealing

3. Technological Devices: Often measures body’s reactions to applied stimulation

BMGT 411: Chapter 3• Step #7: Identify the sample

1. Sampling Unit: Whom should we survey?

2. Sample Size: How many people should we survey?

3. Sampling Procedure: How should respondents be chosen?

BMGT 411: Chapter 3• Step #8: Collect the Data

• In Person: Very expensive and time consuming

• Phone: Still popular, assisted by computers

• Mail: Dying form of collection

• Online: Popular and inexpensive (www.surveymonkey.com)

BMGT 411: Chapter 3• Step #9: Analyze and Interpret the Data

BMGT 411: Chapter 3• Step #10: Present Research Findings and

Recommendations

• Often the Most important part of the process

• Should be visual and easy to understand

• Recommendations should tie back to research objective

Visual Marketing Research

Forecasting Measures of Market Demand

Forecasting:The art of estimating future demand by anticipating what buyers are likely to do under a given set of conditions.

BMGT 411: Chapter 3• Potential Market: Set of consumers with a sufficient level of interest in a market

offer

• Available Market: Set of consumers who have interest, income, and access to a particular offer

• Target Market: The part of the available market the company decides to pursue

• Penetrated Market: The set of consumers who are buying the companies product

BMGT 411: Chapter 3• Methods to Grow Sales:

1.Attract more buyers from the target market

2. Lower qualifications for potential buyers

3. Expand it’s market by adding stores, lowering price, or repositioning itself to attract more buyers

BMGT 411: Chapter 3• Total Market Demand Equation:

Q = n x q x p

Q = total market demandn = number of buyers in the marketq = quantity purchased by an average buyer per year

p = price of an average unit

BMGT 411: Chapter 3• US Car Total Market Potential

Q = n x q x p

Q = total market demandn = 20,000,000

q = 1

p = $25,000

BMGT 411: Chapter 3• US Car Total Market Potential

Q = 20,000,000 x 1 x 25,000

Q = 500,000,000

Ford’s Goal: 25% $125,000,000 Forecast

BMGT 411: Chapter 3

• Key Variables in Forecasting:

• Demographics

• Population Growth

• Population Age Mix

• Diversity

• Education

BMGT 411: Chapter 3

• Key Variables in Forecasting:

• Economics

• Consumer Psychology (Groupon Effect)

• Income Distribution

• Income, Savings, Debt, Credit

BMGT 411: Chapter 3• Key Variables in Forecasting:

• Sociocultural

• Views of ourselves: Today, many gen y’ers are showing behaviors similar to the greatest generation (Saving, etc)

• Views of others

• Views of organizations

• Views of Society

• Views of nature

• Views of the universe

TechnologyIncreased innovation makes forecasting difficult, and changes quickly compared to the past