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BA230

MACRO AND MICRO

ENVIRONMENTS

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The environment
• Macroenvironment – major trends
• Demographic – age, subcultures, education, geographic
clustering
• Economic – income groups, sources of income
• Socio-cultural – values, attitudes, beliefs, lifestyles
• Technology – available technologies, acceptable
technologies

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PEST Framework
• Political – government rules and regulations
imposed on the industry, home market,
regulatory bodies, funding, grants initiatives,
trading policies and the like
• Economic – home economy situation, trends,
taxations, seasonality, weather issues, market
and trade cycles, etc.

PEST Framework
• Socio-cultural – demographics of target
customer, lifestyle trends, consumer attitudes and
opinions, social factors, brand, company, etc.
• Technological – effect of information technology,
research funding, replacement technology/
solutions, maturity of technology, information and
communications, etc.

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PESTLE Framework
• Legal – Rules and regulations, upcoming rules
and regulations (national, regional, city,
industry, trade, etc.)
• Ecological – Environmental issues, trends and
sentiments, new materials, depleting materials,
etc.

The environment
• Microenvironment – competitive arena
• 5 Forces
• Buyers
• Suppliers
• Competitors
• Substitutes
• Potential entrants
• Internal capabilities and resources

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The VRIO Framework

• Value - seeks to know if the company has competitive
advantage
• Rareness - seeks to find whether competitors possess
the same advantages or not
• Imitability - describes the costliness to imitate such
advantage
• Organization - defines how ready the firm is to take
advantage of the resources

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Sources of competitive advantage

• Unique resources
• Assets
• Capabilities
• Knowledge
• Raw materials
• Networks

SWOT Analysis Framework

Environmental Scan

Internal Analysis External Analysis

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

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Strengths
• Competitive advantages
• “Unfair advantages”
• “What you have that others don’t”
• Short-term or Long-term

Sample Strengths
• patents
• strong brand names
• good reputation among customers
• cost advantages from proprietary know-how
• exclusive access to high grade natural resources
• favorable access to distribution networks

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Weaknesses
• Structural weaknesses
• Resource-based weaknesses
• “What others have that you don’t”
• Short-term or Long-term

Sample Weaknesses
• lack of patent protection
• a weak brand name
• poor reputation among customers
• high cost structure
• lack of access to the best natural resources
• lack of access to key distribution channels

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Sample Opportunities
• an unfulfilled customer need
• arrival of new technologies
• loosening of regulations
• removal of international trade barriers

Sample Threats
• shifts in consumer tastes away from the firm's products
• emergence of substitute products
• new regulations
• increased trade barriers

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THE MARKETING
INFORMATION SYSTEM

The Marketing Information System

• Internal records (“results data”)
• Marketing intelligence (“happenings data”)
• Marketing research (“scientific data”)

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Some sources of information

• Published sources – includes periodicals, journals,
reports, government documents, abstracts, books,
directories, manuals, and newspapers
• Unpublished sources – customer survey, market
research, speeches at meetings, television programs,
interviews, and conversation with stakeholders

Examples of Information Tools

• Surveys
• Mystery shoppers
• Focus Group Discussions
• Data mining

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Market Information Systems 23

MARKET RESEARCH

Market Information Systems 24

The Market Research Process

1. Define the Problem and Research Objectives
• Problem should not be defined too broadly nor too
narrowly
2. Develop the Research Plan
• Data Sources
• Research Approaches
• Research Instruments
• Sampling Plan
• Contact Methods

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Research approaches
• Observational research
• Unobtrusive observation
• Personal, or through devices
• Video cameras
• Sensors
• Other recording devices
• Answers the question of “How”

Market Information Systems 25

Research approaches
• Ethnographic research
• Immersion into market’s lives
• In-depth observation
• “Case method”
• May reveal unarticulated desires that do not
emerge through other research methods

Market Information Systems 26

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Research Approaches
• Focus Group Discussions
• 6 to 10 people
• Paid or given tokens
• Quiet location
• Have “rapporteur” and assistant
• Monitored by client or marketing managers

Market Information Systems 27

The Marketing Research Process (cont.)

The Sampling Plan
• Sampling Unit - Who is to be surveyed?

• Sample Size - How many people should be surveyed?

• Sampling Procedure - How should they be chosen?

Contact Methods
• Mail/email questionnaires, Telephone, Personal
interviews

Market Information Systems 28

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The Marketing Research Process (cont.)

• Collect the Information

• Analyze the Information

• Present the Findings

• Make the Decision

Market Information Systems 29

Quantitative vs. Qualitative

• Quantitative research
• Yields statistical significance
• Projectable, provides measurement
• Answers who, what, when, how many, how
often
• Not as rich, issues only measured if known prior
to survey
• Sidelines extraneous data

Market Information Systems 30

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Quantitative vs. Qualitative

• Qualitative research
• Depth and detail
• Not limited to rigidly defined variables
• Flexibility
• Answers why, how
• Not projectable
• Lacks statistical reliability
• Dependent on researcher skills

Market Information Systems 31

DEMAND FORECASTING

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Demand Forecasting
• Potential market – consumers with sufficient level of
interest in product
• Available market – those with interest, income and access
• Target market – the qualified, available market
• Penetrated market – the actual buyers

Total Market Potential

Potential buyers
x Ave. quantity purchased
x Price

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Chain ratio method

• Identify details of target market segment
• Calculate market size via demographic data
• Ex: target women aged 20 to 28 in Metro Manila
• Find: Population in Metro Manila
• Find: Percentage that are women
• Find: Percentage who are 20 to 28 years old

Forecasting future demand

• Expert opinion
• Past data
• Buyer intentions
• Test markets

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