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TEST BANK FOR
MARKETING MANAGEMENT 15TH
EDITION BY KOTLER AND
KELLER
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3. Collecting Information and
Forecasting Demand
Components of a Modern Information System
• Making marketing decisions in a fast-changing world is both an art and a science.
• Marketers have two advantages for the task: (1) disciplined methods for
collecting information and (2) time spent interacting with customers and observing
competitors and other outside groups. Some firms have marketing Information
systems that provide rich detail about buyer wants, preferences, and behavior.
Marketers also have extensive information about how consumption patterns vary across
and within countries.
On a per capita annual basis, for example, the Irish consume the most chocolate (24.7
lbs.), Czechs the most beer (131.7 liters), the French the most wine (45.7 liters), and
Greeks the most cigarettes (4,313).3 Table 3.1 summarizes other comparisons across
countries. Consider regional differences: Seattle’s residents buy more sunglasses per
person than in any other U.S. city; people in Salt Lake City (and Utah) eat the most Jell-O;
Long Beach, CA, residents eat the most ice cream; and New York City dwellers buy the
most music CDs.4
A marketing information system (MIS) consists of people, equipment, and procedures to
gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers. It relies on internal company records, marketing intelligence
activities, and marketing research.
The company’s marketing information system should combine what managers think they
need, what they really need, and what is economically feasible.
INTERNAL RECORDS
To spot important opportunities and potential problems, marketing managers rely on
internal reports of orders, sales, prices, costs, inventory levels, receivables, and payables.
The Order-to -Payment Cycle
The heart of the internal records system is the order-to-payment cycle. Sales
representatives, dealers, and customers send orders to the firm. The sales department
prepares invoices, transmits copies to various departments, and back-orders out-of-stock
items. Shipped items generate shipping and billing documents that go to various
departments. Because customers favor firms that can promise timely delivery, companies
need to perform these steps quickly and accurately.
Sales Information Systems
Marketing managers need timely and accurate reports on current sales. Walmart operates
a sales and inventory data warehouse that captures data on every item for every
customer, every store, every day and refreshes it every hour.
Companies that make good use of “cookies,” records of Web site usage stored on
personal browsers, are smart users of targeted marketing. Many consumers are happy
to cooperate: Not
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only do they not delete cookies, but they also expect customized marketing appeals and
deals once they accept them. Marketers must carefully interpret sales data, however, to
avoid drawing wrong conclusions. Michael Dell illustrates:
“If you have three yellow Mustangs sitting on a dealer’s lot and a customer wants a red
one, the salesman may be really good at figuring out how to sell the yellow Mustang. So
the yellow Mustang gets sold, and a signal gets sent back to the factory that, hey, people
want yellow Mustangs.”
Databases, Data Warehousing, and Data Mining
The explosion of data brought by the maturation of the Internet and mobile technology
gives companies unprecedented opportunities to engage their customers. It also threatens
to overwhelm decision makers.
“Marketing Insight: Digging into Big Data” describes opportunities and challenges in
managing massive data sets
Digging Into Big Data
Although unverified, one popular estimate says 90 percent of the data that has ever
existed was created in the past two years. In one year, people stored enough data to fill
60,00 Libraries of Congress. YouTube receives 24 hours of video every minute. The
world’s 4 billion mobile phone users provide a steady source of data. Manufacturers are
putting sensors and chips into appliances and products, generating even more data.
The danger, of course, is information overload. More data are not better unless they can
be correctly processed, analyzed, and interpreted. In poll of North American senior
business executives, more than 90 percent reported collecting more information—86
percent more on average—than in years past. Unfortunately, roughly as many said they
were missing out on new revenue growth because they could not gather the appropriate
insights from those data.
Some companies are harnessing Big Data. UK supermarket giant Tesco collects 1.5 billion
pieces of data every month to set prices and promotions; U.S. kitchenware retailer
Williams-Sonoma uses its customer knowledge to customize versions of its catalog.
Amazon report generating 30 percent of its sales through its recommendation engine
(“You may also like”). Many financial brands are putting more emphasis on Big Data.
Bank of America is tracking spending and demographic data and tailoring promotions—for
example, offering back-to-school deals to cardholders with children. JPMorgan Chase has
improved communications to new cardholders to gain more engagement.
The 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. The
internal records system supplies results data, but the marketing intelligence system
supplies happenings data. Marketing managers collect marketing intelligence by reading
books, newspapers, and trade
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, Stuvia.com - The Marketplace to Buy and Sell your Study Material
publications; talking to customers, suppliers, distributors, and other company managers;
and monitoring online social media.
Marketing intelligence gathering must be legal and ethical.
A company can take eight possible actions to improve the quantity and quality of its
marketing intelligence. After describing the first seven, we devote special attention to the
eighth: collecting marketing intelligence on the Internet.
Train and motivate the sales force to spot and report new developments.
Motivate distributors, retailers, and other intermediaries to pass along important
intelligence Hire external experts to collect intelligence.
Network internally and externally (as read competitors' publichsed reports…)
Set up a customer advisory panel (Members of advisory panels might include the
company’s largest, most outspoken, most sophisticated, or most representative
customers. GlaxoSmithKline sponsored an online community devoted to weight loss,
where marketers felt they learned far more than they could have gleaned from focus
groups on topics from packaging its weight-loss pill to where to place in-store marketing)
Take advantage of government-related data resources. The U.S. Census Bureau provides
an in- depth look at the population swings, demographic groups, regional migrations, and
changing family structure of the more than 311,591,917 people in the United States.
Census marketer Nielsen Claritas SiteReports cross-references census figures with
consumer surveys and its own grassroots research for clients such as The Weather
Channel, BMW, and Sovereign Bank. SiteReports offers more than 50 reports and maps
that help companies analyze markets, select site locations, and target customers
effectively
Purchase information from outside research firms and
vendors. Collecting Marketing Intelligence on the Internet
Online customer review boards, discussion forums, chat rooms, and blogs can distribute
one customer’s experiences or evaluation to other potential buyers and, of course, to
marketers seeking information. Here are five places to find competitors’ product strengths
and weaknesses online.
Independent customer goods and service review forums. Independent forums include Web
sites such as Epinions.com, RateItAll.com, ConsumerReview.com, and Bizrate.com.
Bizrate.com collects millions of consumer reviews of stores and products each year from
two sources: its 1.3 million volunteer members and feedback from stores that allow
Bizrate.com to collect it directly from customers as they buy.
Distributor or sales agent feedback sites. Feedback sites offer positive and negative
product or service reviews, but the stores or distributors have built the sites themselves.
Amazon.com offers an interactive feedback opportunity through which buyers, readers,
editors, and others can review all products on the site, especially books.
Combo sites offering customer reviews and expert opinions. Combination sites are
concentrated in financial services and high-tech products that require professional
knowledge. ZDNet.com offers customer and expert evaluations of technology products
based on ease of use, features, and stability.
Customer complaint sites. Customer complaint forums are designed mainly for dissatisfied
customers.
Downloaded by: Ariah |
Distribution of this document is illegal
TEST BANK FOR
MARKETING MANAGEMENT 15TH
EDITION BY KOTLER AND
KELLER
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
3. Collecting Information and
Forecasting Demand
Components of a Modern Information System
• Making marketing decisions in a fast-changing world is both an art and a science.
• Marketers have two advantages for the task: (1) disciplined methods for
collecting information and (2) time spent interacting with customers and observing
competitors and other outside groups. Some firms have marketing Information
systems that provide rich detail about buyer wants, preferences, and behavior.
Marketers also have extensive information about how consumption patterns vary across
and within countries.
On a per capita annual basis, for example, the Irish consume the most chocolate (24.7
lbs.), Czechs the most beer (131.7 liters), the French the most wine (45.7 liters), and
Greeks the most cigarettes (4,313).3 Table 3.1 summarizes other comparisons across
countries. Consider regional differences: Seattle’s residents buy more sunglasses per
person than in any other U.S. city; people in Salt Lake City (and Utah) eat the most Jell-O;
Long Beach, CA, residents eat the most ice cream; and New York City dwellers buy the
most music CDs.4
A marketing information system (MIS) consists of people, equipment, and procedures to
gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to
marketing decision makers. It relies on internal company records, marketing intelligence
activities, and marketing research.
The company’s marketing information system should combine what managers think they
need, what they really need, and what is economically feasible.
INTERNAL RECORDS
To spot important opportunities and potential problems, marketing managers rely on
internal reports of orders, sales, prices, costs, inventory levels, receivables, and payables.
The Order-to -Payment Cycle
The heart of the internal records system is the order-to-payment cycle. Sales
representatives, dealers, and customers send orders to the firm. The sales department
prepares invoices, transmits copies to various departments, and back-orders out-of-stock
items. Shipped items generate shipping and billing documents that go to various
departments. Because customers favor firms that can promise timely delivery, companies
need to perform these steps quickly and accurately.
Sales Information Systems
Marketing managers need timely and accurate reports on current sales. Walmart operates
a sales and inventory data warehouse that captures data on every item for every
customer, every store, every day and refreshes it every hour.
Companies that make good use of “cookies,” records of Web site usage stored on
personal browsers, are smart users of targeted marketing. Many consumers are happy
to cooperate: Not
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
only do they not delete cookies, but they also expect customized marketing appeals and
deals once they accept them. Marketers must carefully interpret sales data, however, to
avoid drawing wrong conclusions. Michael Dell illustrates:
“If you have three yellow Mustangs sitting on a dealer’s lot and a customer wants a red
one, the salesman may be really good at figuring out how to sell the yellow Mustang. So
the yellow Mustang gets sold, and a signal gets sent back to the factory that, hey, people
want yellow Mustangs.”
Databases, Data Warehousing, and Data Mining
The explosion of data brought by the maturation of the Internet and mobile technology
gives companies unprecedented opportunities to engage their customers. It also threatens
to overwhelm decision makers.
“Marketing Insight: Digging into Big Data” describes opportunities and challenges in
managing massive data sets
Digging Into Big Data
Although unverified, one popular estimate says 90 percent of the data that has ever
existed was created in the past two years. In one year, people stored enough data to fill
60,00 Libraries of Congress. YouTube receives 24 hours of video every minute. The
world’s 4 billion mobile phone users provide a steady source of data. Manufacturers are
putting sensors and chips into appliances and products, generating even more data.
The danger, of course, is information overload. More data are not better unless they can
be correctly processed, analyzed, and interpreted. In poll of North American senior
business executives, more than 90 percent reported collecting more information—86
percent more on average—than in years past. Unfortunately, roughly as many said they
were missing out on new revenue growth because they could not gather the appropriate
insights from those data.
Some companies are harnessing Big Data. UK supermarket giant Tesco collects 1.5 billion
pieces of data every month to set prices and promotions; U.S. kitchenware retailer
Williams-Sonoma uses its customer knowledge to customize versions of its catalog.
Amazon report generating 30 percent of its sales through its recommendation engine
(“You may also like”). Many financial brands are putting more emphasis on Big Data.
Bank of America is tracking spending and demographic data and tailoring promotions—for
example, offering back-to-school deals to cardholders with children. JPMorgan Chase has
improved communications to new cardholders to gain more engagement.
The 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. The
internal records system supplies results data, but the marketing intelligence system
supplies happenings data. Marketing managers collect marketing intelligence by reading
books, newspapers, and trade
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
publications; talking to customers, suppliers, distributors, and other company managers;
and monitoring online social media.
Marketing intelligence gathering must be legal and ethical.
A company can take eight possible actions to improve the quantity and quality of its
marketing intelligence. After describing the first seven, we devote special attention to the
eighth: collecting marketing intelligence on the Internet.
Train and motivate the sales force to spot and report new developments.
Motivate distributors, retailers, and other intermediaries to pass along important
intelligence Hire external experts to collect intelligence.
Network internally and externally (as read competitors' publichsed reports…)
Set up a customer advisory panel (Members of advisory panels might include the
company’s largest, most outspoken, most sophisticated, or most representative
customers. GlaxoSmithKline sponsored an online community devoted to weight loss,
where marketers felt they learned far more than they could have gleaned from focus
groups on topics from packaging its weight-loss pill to where to place in-store marketing)
Take advantage of government-related data resources. The U.S. Census Bureau provides
an in- depth look at the population swings, demographic groups, regional migrations, and
changing family structure of the more than 311,591,917 people in the United States.
Census marketer Nielsen Claritas SiteReports cross-references census figures with
consumer surveys and its own grassroots research for clients such as The Weather
Channel, BMW, and Sovereign Bank. SiteReports offers more than 50 reports and maps
that help companies analyze markets, select site locations, and target customers
effectively
Purchase information from outside research firms and
vendors. Collecting Marketing Intelligence on the Internet
Online customer review boards, discussion forums, chat rooms, and blogs can distribute
one customer’s experiences or evaluation to other potential buyers and, of course, to
marketers seeking information. Here are five places to find competitors’ product strengths
and weaknesses online.
Independent customer goods and service review forums. Independent forums include Web
sites such as Epinions.com, RateItAll.com, ConsumerReview.com, and Bizrate.com.
Bizrate.com collects millions of consumer reviews of stores and products each year from
two sources: its 1.3 million volunteer members and feedback from stores that allow
Bizrate.com to collect it directly from customers as they buy.
Distributor or sales agent feedback sites. Feedback sites offer positive and negative
product or service reviews, but the stores or distributors have built the sites themselves.
Amazon.com offers an interactive feedback opportunity through which buyers, readers,
editors, and others can review all products on the site, especially books.
Combo sites offering customer reviews and expert opinions. Combination sites are
concentrated in financial services and high-tech products that require professional
knowledge. ZDNet.com offers customer and expert evaluations of technology products
based on ease of use, features, and stability.
Customer complaint sites. Customer complaint forums are designed mainly for dissatisfied
customers.
Downloaded by: Ariah |
Distribution of this document is illegal
