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Marketing Management
Chapter 3 – Collecting Information and
Forecasting Demand
Dr. Manoochehr Najmi
Graduate School of Management and Economics
Sharif University of Technology
1399-00 (2)
Chapter Questions
What are the components of a modern
marketing information system?
What are useful internal records?
What makes up a marketing intelligence
system?
What are some influential macro
environment developments?
How can companies accurately measure
and forecast demand?
3-2
What is a
Marketing Information System?
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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Marketing Information System
(MKIS)
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Assessing Information Needs
1. What decisions do you regularly make?
2. What information do you need to make these decisions?
3. What information do you regularly get?
4. What special studies do you periodically request?
5. What information would you want that you are not getting now?
6. What information would you want daily? Weekly? Monthly? Yearly?
7. What online or offline newsletters, briefings, blogs, reports, or
magazines would you like to see on a regular basis?
8. What topics would you like to be kept informed of?
9. What data analysis and reporting programs would you want?
10. What are the four most helpful improvements that could be made in
the present marketing information system?
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Internal Records
Internal reports of orders
Sales
Prices
Costs
Inventory levels
Receivables
Payables
Advantages Vs Disadvantages?
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Marketing Intelligence System?
A marketing intelligence system is a
set of procedures and sources that
managers use to obtain everyday
information about developments in the
marketing environment. (happenings
data)
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Steps to Quality Marketing Intelligence
Motivate sales force to report new developments
Motivate intermediaries to pass along intelligence
Hire external experts to collect intelligence
Network internally and externally
Set up a customer advisory panel
Take advantage of government-related data
Purchase information from outside research vendors
Collect marketing intelligence on Internet
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Marketing Intelligence on the internet
Independent customer goods and service
review forums
Distributor or sales agent feedback sites
Combination sites offering customer reviews
and expert opinions: ZDNet.com
Customer complaint sites
Public blogs
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Analyzing Macro Environment
Needs and Trends
Fad: unpredictable, short-lived, and without
social, economic, and political significance.
Trend: more predictable
Megatrend: large social, economic,
political, and technological change
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Major Forces in the Environment
Natural Technological
Economic Political-legal
Demographic Socio-cultural
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Population and Demographics
Population growth
Population age mix
Ethnic markets
Educational groups
Household patterns
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Perspective on the Global
Demographic Environment
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Economic Environment
Consumer Psychology
Income Distribution
Income, Savings, Debt, Credit
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Income Distribution
Subsistence economies
Raw-material-exporting economies
Industrializing economies
Industrial economies
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Social-Cultural Environment
Table 3.4 Most Popular
American Leisure Activities
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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 Technological change
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The Political-Legal Environment
Business Legislation
Growth of Special Interest Groups
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Forecasting and
Demand Measurement
How can we measure market demand?
Potential market (sufficient level of interest)
Available market (have interest, income and access and if
qualified, will be called qualified available market)
Target market (part of the qualified available market)
Penetrated market (those who are buying)
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A Vocabulary for
Demand Measurement
Market Demand: Total Volume that would be bought by a defined
customer group. A function of the stated conditions.
Market Potential: Is the limit approached by market demand
Market Forecast: Expected market demand
Company Demand: company’s estimated share of market
demand at alternative levels of company marketing effort
Company Sales Potential: sales limit
Company Sales Forecast: expected level of sales
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Market Demand Functions
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Estimating Current Demand:
Total Market Potential
Total market potential is the maximum sales available to all firms in an
industry during a given period, under a given level of industry marketing
effort and environmental conditions.
Calculations
Multiply the potential number of buyers by the
average quantity each purchases, times price
Chain-ratio method: A*B*C*D*…
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Estimating Current Demand:
Area Market Potential
Market-Buildup for business markets
The market-buildup method calls for identifying all the potential
buyers in each market and estimating their potential purchases. It
produces accurate results if we have a list of all potential buyers
and a good estimate of what each will buy. Unfortunately, this
information is not always easy to gather.
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Estimating Current Demand:
Area Market Potential
Multi-Factor Index method consumer markets
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Estimating Future Demand
Survey of Buyers’ Intentions
Composite of Sales Force Opinions
Expert Opinion
Past-Sales Analysis
Market-Test Method
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For Review
What are the components of a modern
marketing information system?
What are useful internal records?
What makes up a marketing intelligence
system?
What are some influential macro environment
developments?
How can companies accurately measure and
forecast demand?
3-27
