Marketing Management

UNIT_ TWO
 UNIT OUTLINE
• Marketing environment, research and consumer behaviour.
• Marketing environment— meaning and scope, micro and macro
environmental variables.
• Marketing research— importance, areas and process.
• Marketing information system— concept, relevance and
components.
• Consumer behaviour— meaning, importance, consumer
decision making.
• Factors affecting consumer behaviour.
• B2B vs. B2C markets—an overview.
 Learning Outcomes.
• To understand the concept of marketing research.
• To get familiar with the idea of consumer behavior.
• To learn about marketing information system
• Get exposed to B2B and B2C markets.
What Is a Marketing Environment?
 Marketing Environment.
• A marketing environment encompasses all the internal and
external factors that drive and influence an organization's
marketing activities.
• The marketing environment of a company is composed of the
people, institutions, and forces outside marketing that
influencer marketing management’s ability to develop and
maintain a successful relationship with its target customers.
• By conducting a regular and systematic environmental analysis, the
company can revise and adapt marketing strategies to cope with
the new challenges and opportunities in the marketplace.
• The marketing environment is the combination of the
microenvironment and macro environment.
• According to Philip Kotler, “A company’s marketing environment
consists of the internal factors & forces, which affect the
company’s ability to develop & maintain successful transactions &
relationships with the company’s target customers”.
• According to Pride &Ferrell, “The marketing environment consists
of external forces that directly or indirectly influence an
organization’s acquisition of inputs and generation of outputs”.
 WHY…
• Marketing managers must stay aware of the marketing
environment to maintain success and tackle any threats or
opportunities that may affect their work.
• A marketing environment is vast and diverse, consisting of
controllable and uncontrollable factors.
• A good grasp of your marketing environment helps to make
right decisions.
• To sum up, the marketing environment is a set of diverse,
dynamic and uncontrollable forces that impinge on an
organization’s marketing operations and opportunities.
 WHY.. Continuers.
• Identify opportunities
• Identify threats
• Manage changes
 Features of a marketing environment
• Dynamic: The factors that affect marketing environments
constantly change over time.
• Relative: Marketing environments are relative and unique to each
organization.
• Uncertain: Market forces are unpredictable. Even with constant
study, you may face unexpected threats or opportunities in your
marketing operations.
• Complex: The many internal and external forces in a marketing
environment make it complex, with various essential moving parts.
 Types of marketing environments

• There are two significant types of marketing environments:

1. Internal marketing environments
2. External marketing environments
• You can break down the external marketing environment
further into
A. Micromarketing environment
B. Macro marketing environment
 What is an internal marketing environment?

• An internal marketing environment consists of factors that fall

within your control and impact your marketing operations,
including your organization's strengths, weaknesses,
uniqueness, and competencies.
• Think of essential marketing elements such as your people and
teams, the quality of your product or service, capital assets
and budgets, and company policy.
• Internal marketing environment factors are controllable.
 What is an external marketing environment?

• The external marketing environment includes all factors that

do not fall within your organization's control, including
technological advancements, regulatory changes, social,
economic, and competitive forces.
• These factors may be controllable or uncontrollable, but
defining and studying their changes and trends gives your
business and marketing team some power to stay the course.
• The external marketing environment can be broadly
categorized into micro and macro marketing environments.
• What is a macro marketing environment?
• Your macro marketing environment is made up of all the factors
beyond the control of your organization.
• An easy way to remember these factors is by using the PESTLE
acronym, which stands for:
1. P: Political factors
2. E: Economic factors
3. S: Social and demographic factors
4. T: Technological advancement factors
5. L: Legal and regulatory factors
6. E: Environmental factors
 What is a microenvironment in marketing?

• Micro Environment
• The micro-component of the external environment is also known as the task
environment.
• It comprises external forces and factors that are directly related to the business.
• Suppliers include all the parties which provide resources needed by the
organisation.
• Market intermediaries include parties involved in distributing the product or
service of the organisation.
• Partners are all the separate entities like advertising agencies, market
research organisations, banking and insurance companies, transportation
companies, brokers, etc. which conduct business with the organisation.
• Customers comprise of the target group of the organisation.
• Competitors are the players in the same market who targets similar customers
as that of the organisation.
• Public is made up of any other group that has an actual or potential interest or
affects the company’s ability to serve its customers.
 Benefits of monitoring your marketing environment

• Monitoring your marketing environments empowers your business

to make strategic marketing decisions before it’s too late.
• Being more prepared for micro- or macro-environmental changes —
you work from a place of power when you have data that positions
your business marketing for success
• Gaining useful, qualitative information about your marketing
environment, which helps develop successful marketing campaign
strategies
• A better understanding of your customers' needs, resulting in a more
satisfactory product or service
• Having the correct information to create marketing campaigns that
do not cross legal and regulatory policies
• More effective budgeting and allocation of marketing resources
• The ability to recognize potential threats within your marketing
environment and prepare good marketing strategies in time
• The ability to identify and leverage opportunities before your
competitors
• Improving any weaknesses in your organization's marketing setup,
processes, and operations
• Leveraging your unique strengths to build company reputation and
successful marketing campaigns
 What is marketing research?

• Marketing research is defined as any technique or a set of

practices that companies use to collect information to
understand their target market better.
• Organizations use this data to improve their products, enhance
their UX, and offer a better product to their customers.
• Marketing research is used to determine what the customers
want, and how they react to products or features of a product.
• Green and Tull have defined marketing research as follows:
• "Marketing research is the systematic and objective search for,
and analysis of, information relevant to the identification and
solution of any problem in the field of marketing.“
• Marketing research seeks to set about its task in a systematic and
objective fashion.
• This means that a detailed and carefully designed research plan is
developed in which each stage of the research is specified.
• Such a research plan is only considered adequate if it specifies: the
research problem in concise and precise terms, the information
necessary to address the problem, the methods to be employed in
gathering the information and the analytical techniques to be used
to interpret it.
 Scope of Marketing Research

• 1. Research on Products:
• Products involve goods and services.
• This branch of marketing research covers all the issues related to firm’s
products.
It studies and solves the product-related problems, such as:
• i. Study of products’ qualities and performance
• ii. Study of physical and psychological characteristics of product
• iii. Determining uses of the existing products
• iv. Comparative study of competitive products
• v. Detecting consumers’ problems related to the products
• vi. Determining need for developing new products
• vii. Assessing success of a new product in market, including market testing
• viii. Product life cycle and consumer adoption study
• ix. Study of branding, packaging, labeling, after-sales services, and remarking
2. Research on Market:
• This area of marketing research deals with market/consumers.
• It studies characteristics and compositions of the target markets.
• It covers both current as well as potential markets.
This branch includes:
• i. Defining and selecting target market
• ii. Studying needs and wants of target market
• iii. Study of size and location of current market
• iv. Assessing the current market trends and projecting the future trend
• v. Analysis of territorial sales opportunities and potential
• vi. Setting sales territories and sales quotas
• vii. Market share analysis
• viii. Studies on relative profitability of different markets
• ix. Estimating demand of a new product
• 3. Research on Sales Methods and Policies:
• This area of marketing research, particularly, concerns with study and
analysis of the sales- related activities.
• Various aspects covered under this head may be listed as below:
• i. Study and analysis of sales records
• ii. Analysis of sales territories in terms of products, size of orders,
times, terms and conditions and methods
• iii. Study on activities and effectiveness of salesmen
• iv. Evaluating existing selling methods
• v. Sales force management including size, compensation, training,
control, etc.
• vi. Study on effect of various promotional tools such as advertising,
personal selling, sales promotion, and publicity tools on sales
• vii. Study on organisation structure of sales department
• 4. Research on Advertising
• Advertising is one of the powerful methods of market promotion.
• Major part of promotional budget is devoted to advertising activities.
• Therefore, it is imperative to conduct research on various aspects related to
advertising.
• Under this area, at least following aspects are covered:
• i. Comparative study of various elements of promotion
• ii. Study on advertising objectives, media and media selection, advertising
message, theme, copy, and advertising agency
• iii. Social aspects of advertising – negative and positive effects of advertising
on society at large
• iv. Advertising role in different stages of product life cycle
• v. Government restrictions on advertising
• vi. Study on costs and contribution of advertising or evaluating advertising
effectiveness
• 5. Research on Pricing:
• Price is an important element of marketing mix.
• In developing and underdeveloped countries, price plays a vital role.
• Suitable pricing policies and methods can contribute positively in
attainment of marketing goals.
• It is clear that price has remained a major determinant of buying decision.
• This branch covers:
• i. Study on pricing objectives
• ii. Study on effectiveness of pricing policies and strategies
• iii. Study of various methods for setting price
• iv. Quality v/s value analysis
• v. New product and pricing policies
• vi. Study on effect of discount, allowance, and seasonal variables
• vii. Pricing strategies on different stages of product life cycle
• 6. Research on Distribution:
• In today’s marketing, distribution has unique role to determine
success of product.
• A marketer can contribute to total consumer satisfaction by designing
appropriate distribution network. Physical distribution and
distribution channel are two important components of such research.
• This area includes:
• 1. Assessing role of distribution decisions in achieving marketing goals
• 2. Comparative study of between direct and indirect distribution
• 3. Physical distribution and ancillary services
• 4. Study on various types of channels of distribution
• 5. Study on relevant factors affecting channel decision/selection
• 6. Comparing company’s distribution strategies with competitors
• 7. Research on Business Environment and Corporate Responsibility:
• This area is not concerned with solving any marketing problem directly.
• In order to collect and analyze data related to broad business environment, such
research is conducted.
• The study on the area helps manager formulate strategies for the current and the
future market as well.
Main aspects covered under the head include:
• i. Business analysis including demand, national income, per capita income, trade
and industry, economic growth rate, fiscal monetary policies, and export-import
policy.
• ii. Short-term and long-term business forecasting.
• iii. Technological aspects.
• iv. Availability and quality of productive resources.
• v. Impacts of legal provisions and Acts.
• vi. Study on consumerism and the consumer rights.
• vii. Social and cultural values affecting business policy.
 Why is research so valuable?

• Attract potential customers

• Answer the why’s
• Data-backed decisions
• Better planning
• Marketing research delivers good information because of the
competitive marketing climate and the ever-increasing
expenses associated with bad decision-making.
• Sound judgments are not made purely on gut instinct,
intuition, or even pure logic.
 YA Its NEEDED.

• i) To estimate the potential market for a new product to be

introduced in the market.
• ii) To know the reactions of the consumers to a product already
existing in the market.
• iii) To find out the general market conditions and tendencies.
• iv) To know the reasons for failure of a product already in the
market.
• v) To find out the better methods of distributing the products to
consumers.
• vi) To know the types of consumers buying a product and their
buying motives to know their opinions about the product and to get
their suggestion improvement of a product.
• vii) To assess the strength and weakness of the competitors.
• viii) To know the dimensions of the marketing problems.
• ix) To ascertain the distribution methods suited to the product and
the
• x) To estimate the market share of a firm.
• xi) To assess the probable sales volume of a firm.
• xii) To assess the reaction of the consumers to the packaging of
the firm and to make packaging as attractive as possible.
 In particular, the research brief should include:

• The purpose of the research

• The objectives stated in a clear, concise, attainable,
measurable and quantifiable way
• A time horizon
• A resource allocation, including the budget and facilities
• A reporting period.
 Differences Between Market Research and Marketing Research

• We understand that these terms might be used interchangeably, but

they have distinct meanings.
• Market research is the study of customers and the market, whereas
marketing research is the study of all aspects of marketing.
• Market research is reliant, whereas marketing research is
autonomous.
• Marketing research has a much broader reach since it involves
doing product research and customer preferences, whereas
market research just involves gathering market information.
• Market research investigates the market success of a product
or service, whereas marketing research collects data for
marketing intelligence activities and decision-making.
• Market research is focused on answering particular questions,
whereas marketing research is more general and utilized to
solve various marketing challenges.
 Similarities Between Market Research and Marketing Research

• Both are important to the success of a business.

• Both types of research generate useful data.
• Surveys, focus groups, questionnaires, and interviews are
examples of quantitative and qualitative tools and approaches
that may be used to acquire information.
• Effective for making judgments on the type and quality of items
and services given to clients, appropriate company sites, the best
advertising, and the most efficient distribution methods and
networks.
 Types of Marketing Research
• So what is an example of marketing research? It depends on what
type you’re looking for.
• Within the broader category of marketing research, there are several
different types.
• The following list is just a sampling:
1. Analysis of marketing performance
2. Brand awareness research
3. Brand association research
4. Demand estimation
5. Marketing effectiveness
6. Mystery shopping
7. Sales forecasting
8. Trend spotting
• 1. Define the problem. Focus on the core customer challenge to solve.
• 2. Develop your research plan. Create a roadmap that includes identifying
your target audience as well as determining what research tools to use,
and the timeline and resources for the project.
• 3. Gather your information. Whether you use surveys, interviews or other
methods, you will gather and organize your data. You can rely
on qualitative and/or quantitative data to help you get started.
• 4. Analyze your data. Review the data for meaningful insights and home in
on key points that will help inform your marketing campaigns and
strategies.
• 5. Develop a strategy. Determine how your business can shape your future
products and services with the marketing research you’ve just done.
• 6. Take action. Plan those next steps, which may include new product
development, further concept testing, a new product launch, or fresh
Types of Marketing Research
 Types of marketing research

• Exploratory research
• Have a fresh idea that no one has researched before? That’s the goal of
exploratory research -- to collect information about a problem and insights
about how to solve the problem.
• Descriptive research
• Descriptive research tests the research question to discover if it is accurate or
inaccurate. This method measures how often and to what extent variables in
the study are correlated.
• Causal research
• Causal research looks at the cause-and-effect relationship between variables. If
one variable changes, the researcher can record the impact on another
variable. Causal research can answer “what if” questions that include price
changes, packaging changes, adding or removing product changes and more.
• Predictive research
• As the name implies, researchers are looking for what will happen in the
 The features of marketing research

• Search for data

• It is systematic
• It should be objective
• It is a process
 Limitations of Marketing Research:
• 1. It is not a Panacea:
• 2. Not an exact science:
• 3. Limitation of time:
• 4. Erroneous findings:
• 5. Not an exact tool of forecasting:
• 6. In experienced research staff:
• 7. Narrow Conception:
• 8. Involves high cost:
• 9. Limitations of tools and techniques:
• 10. It is passive:
 Marketing Information System
• The marketing information system distributes the relevant
information to the marketers who can make the efficient decisions
related to the marketing operations viz.
• Pricing, packaging, new product development, distribution, media,
promotion, etc.
• Every marketing operation works in unison with the conditions
prevailing both inside and outside the organization, and, therefore,
there are several sources ( viz. Internal, Marketing Intelligence,
Marketing Research) through which the relevant information about
the market can be obtained.
 Further
• A marketing information system, or an MIS, is a system for
gathering, storing, analyzing and distributing valuable
marketing data to help marketers make better decisions.
• The input of a marketing information system focuses on
collecting relevant internal and external data to analyze and
interpret.
 Marketing Information System

• The Marketing Information System refers to the systematic

collection, analysis, interpretation, storage and dissemination
of the market information, from both the internal and external
sources, to the marketers on a regular, continuous basis.
 Example of Marketing Information System

• The use of MIS can be seen with the membership that big retail
stores like Big Bazaar, Reliance Fresh provide with their
membership programs.
• They integrate the user preferences with the help of some
unique reference ID or card that they provide.
• With the help of that they are able to track the frequency of visit
the customer has and at the same time they are able to tailor
offers for the customer with the help of previous purchase data.
• The membership at the same time invokes the customer to
come to the store for repeat purchases.
Components of MiS
• Internal reports
• Internal reports or records include the data from within the company.
• Referencing this data can provide you with valuable insights, particularly
regarding a company's capabilities, successes and opportunities for
improvement.
• Some examples of data internal reports may include are:
1. Cash flows
2. Inventories
3. Marketing personnel costs
4. Payables
5. Product costs
6. Receivables
7. Sales records
• Marketing data support systems
• A marketing data support system includes the software programs and
tools companies may use to collect, organize and analyze data.
• A system may include multiple applications or tools to include specific
tools for specific tasks.
• As the programs work together, the system provides the core for how
the marketing information system functions.
• Marketing intelligence
• Marketing intelligence refers to the data or information from
external sources, such as industry associations or trade journals.
• It includes data related to the general marketing environment
outside of the organization and the specific data within the
market.
• Leveraging this information helps the company better understand
their specific marketing and competitors within the market.
• Some examples of what marketing intelligence may include are:
1. Changes in customer preferences and tastes
2. Competitors' pricing strategies
3. Competitors' promotion strategies
4. Marketing trends
5. New products in the market
• Marketing research
• Marketing research includes project-based research aiming to
answer specific marketing questions.
• It may include internal and external data and often uses a
variety of statistical tools.
• Processing marketing research includes collecting, organizing,
analyzing and interpreting the data.
• Some examples of what marketing research may pertain to
include:
1. Changes in the marketing environment
2. Competitor strategies
3. Customer preference or taste changes
4. New product launches
• A marketing information system can be beneficial for multiple types of
marketing decisions, such as:
• Control decisions
• Operational decisions
• Strategic decisions
• Other benefits of using a marketing information system include the
following ones
• A thorough analysis of demand and supply;
• Increased competitiveness and your market share;
• Identifying business development opportunities;
• Implementing consumer-oriented approach;
• Identifying and managing business risks;
• Improving the overall marketing strategy of your company;
• Keeping an eye on your competition;
 Marketing information system process
• Marketing information systems use a sequential process to
synthesize data and share findings to influence decision-
making.
• Here are the steps of the marketing information system
process:
1. Determine the appropriate marketing metrics.
2. Gather relevant data from external and internal sources.
3. Graph the data to visualize trends.
4. Distribute the trend information to the appropriate
departments.
5. Use the data to determine the right course of action to take.
 Disadvantages of Marketing Information System

• 1. There is a high amount of initial labour and capital involved

which has acted as a great hurdle for companies not that big in
stature and financial might
• 2. Too much reliance on MIS can make marketers miss trends
in the industry
• 3. There is always some lag between the implementation and
fruition of marketing activities which can be misjudged with
MIS
• 4. The complexity of MIS brings in other challenges on the
operational aspect for managers and the time spent on
understanding these take a toll on the bottom line
 What Is Consumer Behaviour?

• Consumer behavior is the study of consumers and the

processes they use to choose, use (consume), and dispose of
products and services, including consumers’ emotional,
mental, and behavioral responses.
• Understanding consumer behavior is crucial for businesses to
create effective marketing strategies that can influence
consumers’ decision-making processes.
• Definition: Consumer Behavior is the observational activity
conducted to study the behavior of the consumers in the
marketplace from the time they enter the market and initiate
the buying decision till the final purchase is made.
 A consumer behavior analysis should reveal:

• What consumers think and how they feel about various

alternatives (brands, products, etc.);
• What influences consumers to choose between various
options;
• Consumers’ behavior while researching and shopping;
• How consumers’ environment (friends, family, media, etc.)
influences their behavior.
 The Types Of Consumer Behaviour
• Complex buying behaviour: It is a situation where consumer is
purchasing and there are difference in brands.
• Dissonance-reducing buying behaviour: Such behavior occur when
consumer is highly involved but notices little difference between
brands.
• Habitual buying behaviour: Habitual buying behavior happens
when consumer involvement is low and the difference between
brands is small.
• Variety-seeking behaviour: In this situation consumers switch
among products, categories or brands to avoid decreasing utility
for repeat purchases or consumption of similar products.
 Consumer Buying Process

• Now consumer behaviour eventually boils down to this step.

How a consumer decides on which product he is going to buy.
• This is based on a set of steps each consumer follows:
 7o’s of Consumer Behavior
• 7 O’s Framework for Consumer Behavior
• The 7 O’s Framework to understand Consumer Behavior is
discussed as under:
• Occupants – Who is the Consumer?: This questions makes it easier to
know about the consumer’s overall profile in relation to geographic,
psychographic, demographic
• Object – What does the Consumer Buy?: It determines the product
proposition which the consumer purchases, i.e. the brand, product or
product form. Further, it will also identify the specification, colour,
size, type, variant, etc which the customer seeks to buy.
• Objective – Why is Consumer Buying?: It gives reason for the
purchase of the product by the customer, in terms of the needs
satisfied or benefits expected from the product.
For example, Complan is expected to increase the height of the child.
• management of the sources of information which influence the buying
decision of the consumer.
• Occasion- When do they Buy?: It ascertains the buying frequency (how often)
and the occasion on which the customer tend to buy the product or services.
• Outlet – Where do they Buy?: It identifies the outlet, be it a retail shop, online
platform i.e. app or website, departmental store or any other location from
where the customer makes the buying decision.
For example: Do customers buy a mobile phone from a retail outlet or online via
Amazon or Flipkart?
• Operations – How do they Buy?: It determines the background information
which the consumer collects from various sources, before making the purchase.
For example: Before buying a laptop consumers often look for the reviews of
the latest laptops, as well as ask various questions from the company’s
representatives to get assured of the product quality.
• Organization – Who is Involved?: It determines the management of the
sources of information which influence the buying decision of the consumer.
• What are the factors influencing consumer behavior?
• In a general scenario, we’ve got five main factors that
determine consumer behavior, i.e these factors regulate if a
target customer purchases a product or not.
• These factors are namely Psychological, Social, Cultural,
Personal, and Economic factors.
 What Is Business-to-Business Market?
• Business-to-business (B2B) is a business model where a business
sells or purchases products or services to and from another
business.
• This type of relationship is common among manufacturers,
wholesalers, distributors, and retailers that will resell the products
or services.
• Generally, B2B transactions occur in the supply chain, where a
specific company will purchase raw materials from another
company for manufacturing purposes.
• B2B products or services are also more valuable than those at the
consumer level.
• Business-to-business (B2B), also called B-to-B, is a form of
transaction between businesses, such as one involving a
manufacturer and wholesaler, or a wholesaler and a retailer.
• Business-to-business refers to business that is conducted
between companies, rather than between a company and
individual consumer.
• Business-to-business stands in contrast to business-to-consumer
(B2C) and business-to-government (B2G) transactions.
 A VIEW
• Business-to-business (B2B) is a transaction or business
conducted between one business and another, such as a
wholesaler and retailer.
• B2B transactions tend to happen in the supply chain, where
one company will purchase raw materials from another to be
used in the manufacturing process.
• B2B transactions are also commonplace for auto industry
companies, as well as property management, housekeeping,
and industrial cleanup companies.
• Meanwhile, business-to-consumer transactions (B2C) are those
made between a company and individual consumers.
 What Is Business-to-Consumer (B2C)?

• The term business-to-consumer (B2C) refers to the process of

selling products and services directly between a business and
consumers who are the end-users of its products or services.
Most companies that sell directly to consumers can be referred
to as B2C companies.
 KEY TAKEAWAYS

• Business-to-consumer refers to the process of businesses

selling products and services directly to consumers, with no
middle person.
• B2C typically refers to online retailers who sell products and
services to consumers through the internet.
• Online B2C became a threat to traditional retailers, who
profited from adding a markup to the price.
• However, companies like Amazon, eBay, and Price
Difference