Chapter-3

Gathering Information
and
Scanning the Environment
 Marketing Information System.
 Consumer oriented marketing become the philosophy of business.
To manage a business well is to manage its future. To manage
future is to manage information.
 A marketing Information System ( MIS) consist of people,
equipment and procedures to gather, sort, analyze, evaluate and
distribute needed, timely and accurate information to marketing
decision maker.
 The expansion in the market and severe competition have become
necessitated the study of market ( consumer want , their habits,
their purchase power, supply & demand, market trend etc.).
E.g. (1) Keralien use coconut oil to cook food.
(2) Punjab and Hariyana show the highest per capita
consumption of milk per day.
(3) Demand for Instant food ( ready to eat) is more in metros.
 Need and Importance of Marketing
Information System
 Anticipation of consumer demand :- It helps to understand
existing demand and its shift.
E.g. (1) Normal TV to flat Screen TV and now to LCD.
(2) Demand for processed food like pickles, noodles etc.
 Changing competitive conditions:- More and more rivals are
jumping in the industry. Indigenous firms are facing stiff
competition not only locally but also internationally.
E.g. (1) BALAJI wafers compete with ITC’s BINGO and Pepsi’s
LAYS etc.
 Development of Science and Technology:- In most cases, the
market was the mother of invention. In the modern days everyone
prefers new and improved products.
E.g. (1) Philips DVD player with USB mode. (2) TATA SKY with
live pause facility.
 Need and Importance of Marketing
Information System (Cont…)
 Consumerism and increasing consumer grievances :-
Communication Gap between marketers and consumers
increases the importance of MIS.
E.g. Private banks have understood the importance of
continuous service, which helped them to capture huge market
share so fast in India from public sector banks.
 Planning :- Planning is important in every function of
organization. Marketing planning ( product planning, price
planning, distribution planning, promotional planning ) requires
huge information about consumer, economy, competitor,
demand & supply etc.
E.g. (1) Reliance communication introduced Jio sim card
(2) LUX depicted Shahrukh khan in their advertisement.
 Components of a Modern Marketing
Information System
Internal company Records
 Here managers use data or information available with the organization
(Reports on order, sales, prices, cost, inventory level, receivables,
payables etc).
Following records will be beneficial for this propose.
1. The order-to-payment cycle
• Companies needs to perform very accurately the task of converting
order to actual delivery.
• Many companies use internet facilities for faster distribution not only to
customer but also to middleman.
• Companies can also take decision to increase number of whole sellers,
franchisees, staff for operational activities, paperless faster selling etc.
• E.g. (1) Computerized program in Wal-Mart sends orders to P&G
automatically when stock reaches to minimum level.
(2) Dell previously taking orders online, now started giving dealership in
India
2) Sales Information Systems
• Marketing managers need timely and accurate reports on
current sales.
• Bifurcation of data by customer, region, day, month etc.
will provide in-depth understanding about the future
marketing actions to be taken.
• Many companies use to provide electronic gazettes to their
employees for faster accessibility to the data.
• This kind of information will help in taking special actions
or attention during specific time.
E.g. (1) Banks particularly does NRI promotional activities
during the month of November and December.
(2) Sales data also helps to understand the performance of
a particular product. (India Bulls Securities has shut
down its office in Anand because of poor performance)
3) Databases, Data warehousing and Data mining
• Today companies maintain different database ( customer,
product, salesperson etc.) and then combines data from
different database.
• Help of statisticians are taken for converting raw data into
usable information.
• This helps marketer to integrate marketing activities for
individual customer and also to sell new products.

 The Marketing intelligence system

• A marketing Intelligence System is a set of procedures and
sources managers use to obtain everyday information about
developments in the marketing environment.
• The internal records system supplies results data, but the
marketing intelligence system supplies happenings data.
 Steps to improve Quality of Marketing
Intelligence

1. Train and motivate the sales force to spot and report new
development
E.g. Toyota provides incentives for providing unique ideas to
their employees.
2. Motivate distributors, retailers and other intermediaries to pass
along important intelligence
3. Network Externally:- The firm can purchase competitor’s
products; attend open houses and trade shows, read competitor’s
published report, talk to employees, dealers, suppliers etc. This
should be done in ethical manner.
E.g. P&G reportedly paid a multi-million settlement for using
some external operative for unethical intelligence against
Unilever’s hair care products.
4. Set up customer advisory panel:- Panel includes panel of
customer and employees.
E.g. Railways – Railways user Consultative committees
HDFC bank Ltd.- Employee customer committee
Colleges – Parents Teachers Association.
5. Take advantage of government data resources.
( E.g. The National Sample Survey
Organization, Agricultural Departments, RBI, Various
universities, Centre for monitoring Indian Economy – CMIE
etc.)
6. Purchase information from outside suppliers
( E.g. AC Nielsen-ORG MARG, TAM
Media Research etc.)
7. Use online customer feedback systems to collect competitive
intelligence. ( E.g. complaints.com, zdnet.com,
 Needs and Trends
 Company creates solutions to unmet customer needs.
 A fad is “unpredictable, short-lived, and without social,
economic, and political significance.”
• A company can cash in on a fad such as Crocs clogs and
Pokémon gifts and toys, but getting it right requires luck and
good timing.
A trend is a direction or sequence of events with momentum and
durability. ( E.g. Trend for body fitness)
A trend is more predictable and durable than a fad; trends reveal
the shape of the future and can provide strategic direction.
A megatrend is a “large social, economic, political, and
technological change that is slow to form, and once in place,
influences us for some time—between seven and ten years, or
longer. ( E.g. e-journels in Library)
Major Forces in the Environment

Demographic

Political-legal Economic

Technological Socio-cultural

Natural
 The Demographic Environment
1. Population growth 2. Population age mix
3. Ethnic and other markets 4. Educational groups
5. Household patterns
 The demographic environment includes the study of human
population in terms of size, density, location, age , sex, race,
occupation and other statistical information.
 Mexico is a country with maximum young generation. This creates an
opportunity for companies like Johnson & Johnson, Haggis diapers,
school bags etc.
 For marketers literacy levels have important implications for a host
of decision. Lower literacy rate decreases the scope for businesses
like organized retail chains, fast food chains, books, soft ware etc.
 Youth are Potential customers and influencer of choice.
(FASTTRACK, sports Bikes, Pepsi ( Youngistan) MTV, Channel V,
Mountain Dew.)
 Economic Environment
 More population growth doesn’t mean more market. It should be
backed by sufficient purchasing power.
 The available purchasing power in an economy depends on
current income, price, savings, debt and credit available.
 Understanding of income level helps even to Integrate
marketing programs.
 In India 1.2 million people comes under upper class with
spending power more than 2 trillion rupees. By 2025 this
number will move to 9.5 million Indian with spending power of
14.1 trillion rupees. This creates new opportunities for
companies of luxury items like luxury car, jewelers, designers
dress etc.
 Rural FMCG market in India is growing by 30%.
 “Earn now and spend later” philosophy is changed to “earn
now and spend now”. [ proportion of saving and investment
was 14% in 1999, which became 4.1% by 2003]
 80% of household have a monthly income of less than Rs
3000/-. This again given the opportunity for companies like
Mahindra & Mahindra to come up with financial business
specially to boost their auto business.
 TATA-NANO is another new idea of grabbing the market
economically.
 The consumption pattern of India has been undergoing a
significant transformation over the years.
 Change in life style has created the demand for new products
like motor cycles, branded clothing, super markets, personal
care items.
 Social- cultural Environment
 Society shapes the beliefs, values, and norms that largely
define consumer tastes and preferences.

 South Asia is land of diversity, which reflects through

languages, cultures and various religion.

 Even Dress code, food in India differs widely in different

regions.

 Marketers in India, customize the marketing activities as per the

region.
E.g. Earlier Shahrukh Khan was depicted in Airtel TV
commercial in Northern side of India and Madhavan in South
India.
 Marketers make products and marketing strategies even
religion wise.
E.g. (1) Parsoli Investment (A Broking firm) works on the
principals of Islamic Law ( shariah).

 Eating habit not only differs between countries but also with in
countries.
E.g. (1) KFC has started in those states of India where people
are fond of non-vegetarien food.
(2) Keralien eat Coconut oil, but Gujaraties use ground nut
oil.

 children plays a great role in purchase decision making in India.

E.g (1) Burger Paint depicts children in their TV commercial.
 Natural Environment
 Organizations are very much concerned about natural
environment. Environmentalists in India have been campaigning
against pollution- causing industries.
E.g. The campaign against Coca Cola by local community in
Plachimada village in Kerala.

 Rules and regulations in India hit certain Industries very hard

and compelling them to invest billion on pollution control
equipment .
E.g. (1) Compulsion to follow Euro II norms for emission levels
( Bharat II in India) in some of the major cities.
(2) 5-star refrigerator and A.Cs
(3) Organic farming
 Gujarat have already taken step called Green Credit
Scheme for new coming industries.
 Natural Environment (Cont…)
 Union govt. of Delhi implemented rule that
public transportation vehicles like auto
rickshaws and buses use only CNG as fuel.

 HDFC bank induces their customers to

register for e-mail statement with a purpose
to save paper ( Which indirectly save tree) .

 Because of scarcity of natural resources,

many organizations have switched to
different alternatives. (Indian Railways is
looking to switch from high-speed diesel to
developed sustainable fuel such as Jatropha
oil)
 Technological Environment
 One of the most dramatic forces shaping people’s life is
technology.
 Technology affects the growth of economy. Technology
increases the standard of living and also creates opportunities
for every one.
 Innovations creates new opportunities of investment and which
indirectly creates employment opportunities.

 E.g. (1) Innovations in various industries like Railroad

industry has created various investment opportunities.
(2) Innovations of cell phone and computers have made life very
easy.
 Every new technology is a source for “creative destruction”.
E.g. (1) Photocopy hurts the carbon paper business.
(2) Innovation of computer hurts the Typewriter business.
(3) Television hurts the newspaper business.
 New technology also creates major long-run consequences that are
not always foreseeable.
E.g. The contraceptive pills lead to smaller families, more working
wives, and larger discretionary incomes- resulting in higher
expenditure on vocational travel, durable goods and luxury items.
 Marketer should monitor the following four trends in
technology;
1. Accelerating pace of change.
2. Unlimited opportunities for innovation.(E.g. AIDS vaccines, Non
fattening food, Robots for domestic works or even Car fueled with
water)
3. Varying R&D
4. Increased Regulation on innovation. (FDA in US, Drugs and
cosmetic Act 1940 in India)
 Political-Legal Environment
• The political and legal environment consist of laws,
government agencies and pressure groups that influences and
limits various organizations and individuals.
• With government, a lot of other special interest groups are their
who keep their keen eye on company's activity.

E.g. (1) Government has made various laws and grievances

settlement houses ( District Consumer Forum, State/National
consumer Disputes Redressal commission etc.)
(2) NGOs and other interest groups
(3) Green dot (veg.) and red dot on food items (non-
veg.)
(4) MRP on packet
(5) Vibrant Gujarat