Scanning the marketing

environment for opportunities

 Objectives
• At the end of the chapter, the learners are able to;
1. Design marketing information system.
2. Appraise forces in the macro environment of the company;
3. Evaluate the competitive environment of the company; and
4. Illustrate market opportunity analysis.
 Environmental Scanning
• Compels an organization to dig deeper into the external
environment and discover important lessons, trends,
opportunities or threats that can unfavorably influence the
company and its industry.
• Once spotted, these external market factors are made used to
create new strategies.
 Marketing Information System
• Is a management information system designed to support marketing
decision making.
• It brings together many different kinds of data, people, equipment, and
procedures to help an organization make better decisions.
• Not to be confused to a management information system , marketing
information are designed specifically for managing the marketing aspects
of a business.
 Components of Marketing Information
System
• MIS collects, analyzes, and supplies a lot of relevant information to the
marketing managers. It is valuable tool for planning implementing and
controlling the marketing activities.
• The role of MIS is to identify (find out) what sort of information is
required by the marketing managers. It then collect and analyzes the
information. It supplies this information to the marketing manager at the
right time.
• MIS collect its information through its subsystems.
Four main components of MIS
 Internal Records
• The information can be collected Companies maintain several
from the documents such as
data bases such as;
invoices, transmit copies, billing
documents prepared from the 1. Customer database
firms once they receive the order
for the goods and services from
2. Product database
the customers, dealers, or the 3. Sales person database
sales representatives.
 Marketing Intelligence
• Marketing intelligence is used by • This scanning of the economic and
marketing managers to sift information
business environment can be
from the external environment to used
undertaken in a variety of ways;
in the decision making. Its also
including ;
includes the information about the
competitors pricing strategy, change in 1. Unfocused Scanning
the costumers tastes and preferences, 2. Semi-Focused Scanning
new product launched in the market,
promotion strategy of the competitors 3. Informal Search
and so on. 4. Formal Search
 Marketing Research
• A marketing Research is a systematic
collection, organization, analysis and
interpretation of the primary or the
secondary data to find out the
solutions to the marketing problems.
• Marketing Research provides
information to the marketing
managers. this information is specific
information. It can be used only for a
particular purpose.
• Primary data- are the data which are
collected first hand especially for the
purpose of the study. The main sources of
collecting primary data are;
1. Salesmen
2. Dealers
3. Consumers
• Secondary data – are the data that have
been already collected by and readily
available from other sources.
 Marketing Decision Support System
• Is a tools which help the marketing • A good MMDS should have the
managers to analyze data and to take following characteristics:
better marketing decisions. They
include hardware, like computer and 1. Interactive
soft ware programs. 2. Flexible
• The marketers need to keep a check on 3. Discovery Oriented
the marketing environment both
internal and external, so that marketing 4. User Friendly
policies, procedures, and strategies can
be designed accordingly.
 Major Forces in the Macroenvironment
• Companies and their suppliers, marketing intermediaries, customers,
competitor, publics al operate in a macro environment of forces and trends
that shape opportunities and pose threats.
• The beginning of the new century brought a series of new challenges such
as the steep decline of the stock market, which affect savings,
investments, and retirements fund; increasing unemployment; corporate
scandals; and of course the rise of terrorism.
 What Is a Macro Environment?

A macro environment refers to the set of conditions that exist in the

economy as a whole, rather than in a particular sector or region. In
general, the macro environment includes trends in the gross domestic
product (GDP), inflation, employment, spending, and monetary and fiscal
policy.
 Political
• The political environment includes laws, government agencies, and pressure
group that influence and limit various organizations and individuals in a
given society.
• Government is controlling the marketing of fast food restaurant because of
health concerns such as cardiovascular and cholesterol issue and obesity
among the young and children in the country.
• Good relationship with government in giving mutual benefits such as
employment and tax is a must for the company to succeed in any foreign
market
 Economic
• The climate of the economy dictates how consumers, suppliers, and other
organizational stake holder such as suppliers and creditors behave within
society.
• An economy undergoing recession will have high unemployment, low
spending power and low stakeholder confidence. Conversely a booming or
growing economy will have low unemployment, high spending power, and
high stakeholder confidence.
• A successful organization will respond to economic condition and stakeholder
behavior.
 Economics
Economics is the social science that studies the production, 
distribution, and consumption of goods and services.

Socio-Cultural
• Social factor focuses its
attention on forces within
society such as family,
friends, colleagues, neighbors
and the media. Social forces
affect the attitudes, interest
and opinions.
• Cultural factors consist of
opinion people have towards
themselves, other organization
and society in general
• Among the most dynamic cultural
characteristics are;
1. Persistence of cultural values
2. Shift in secondary cultural values
a) People’s view of themselves
b) People’s view of others
c) People’s view of organization
d) People’s view of society
e) People’s view of nature
f) People’s view of the universe
 Demographic
• Demography is the study of
human populations in terms of
size, density, location, age, sex,
race, occupation, and other
statistics.
• It is of major interest to marketers
being associated with changing
nature and volume of population.
• Demographic trends are
constantly changing. Some more
interesting ones are the following;
1. The worlds population
2. Age structure of the population
a) Generation x
b) Echo boomers (baby boomlets)
 Ecological
It consist of natural resource composition in a given country.
• During the past two decades environmental concerns have steadily grown.
Some trends analysts labeled the specific areas of concern were:
1. Shortage of raw materials
2. Increased pollution is a worldwide problem
3. Government intervention in natural resources management
4. Environmentally sustainable strategies
 Technological
• Technology has created a society which expects instant results. A faster
exchange of information can benefit businesses as they are able to react
quickly to changes within their operating environment.
• Technology is utilized by all age groups, children are exposed to
technology from birth and new generations of technology savvy
pensioners known as “ silver suffers” have emerged.
• Technology will continue to evolve and impact consumer habits and
expectations, organizations that ignore this will hinder their success.
 Analyzing the Competitive Environment

Competitive forces
The competitive environment, also known as the market structure, is the
dynamic system in which a business competes.
The state of the system as a whole limits the flexibility of a business.
1. Direct competitors
2. Indirect competitors
 Identifying and Analyzing Competitors
• Here are the five forces as a foundation for developing a strong analysis of
a competition.
1. Threat of New Potential Entrants
2. Threat of Substitute Product
3. Bargaining Power of Suppliers
4. Bargaining Power of Buyers
5. Rivalry among Competitors
 Market Opportunity Analysis
The following procedures involved in analysis
 Is a kind of business planning of market opportunity is presented below;
that emphasizes on discovering Identify what’s currently happening in the
the future opportunities and business environment
evaluating the company’s Define the industry and determine the outlook
technological, financial, and Look into the details of competitors
competitive willingness to Describe the target market
make use of them. Create projections
 Marketing Strategies Based on Market
Dominance
• A market dominance is a measure of
the strength of a brand, product,
service, or firm, related to
competitive offerings.
• There are four types of market
dominance strategies that a marketer
will consider; These are the market
leader, market challenger, market
follower, and market nicher.
Market leader
• Is a dominant in its industry. It
typically is the industry leader in
developing innovative new
business models and new
products. Of the four dominance
strategies, it has the most
flexibility in crafting strategy.
 The main options available to market leaders are;

1. Expanding total market- the leader normally gains more when the
total market expands. When total market or the industry expands, major
player will gain more.
a. Add new users
b. Discover new users
c. More usage per occasion/time
d. More frequent uses
The main options available to market leaders are;

2. Defending/ maintaining current c. Preemptive or preventive defense

market share- this strategy is based d. Counter offensive defense
on the theme: “customer-retention is e. Mobile defense
more profitable than customer-
creation”. At any cost, the current i. Market broadening
market share must not be endangered. ii. Market diversification
a. Position defense f. Contract defense
b. Flank defense
 The main options available to market leaders
are;
3. Expanding market share d. Increasing promotion efforts
- The market leader prefers to improve e. Improving distribution system
profitability by increasing market
f. Deploying aggressive sales force
share.
g. Applying price-cut
a. Adding new product lines
h. Improving product efficiency
b. Expanding existing product lines
c. Improving product qualities
 Market Challenger
• A market challenger is a company in a strong, but not dominant
position that is following an aggressive strategy of trying to
gain market share. It typically targets the industry leader, but it
could also target smaller, vulnerable competitors
Some of the options open to a market challenger are;
1. Defining strategic objectives and a. Price-discount strategy
opponents
b. Cheaper-good strategy
2. Choosing general attack strategies c. Prestige-good strategy
a. Frontal attack d. Product-proliferation strategy
b. Flank attack e. Product-innovation strategy
c. Encirclement/all-around attack f. Improved-services strategy
d. Bypass attack g. Distribution-innovation strategy
e. Guerilla attack h. Manufacturing-cost reduction strategy
3. Choosing specific attack strategies or i. Intensive advertising and promotion
attacking tools
 Market Follower
Is a company in a strong, but not dominant position that is content to stay at
that position. The rational is that by developing strategies that are parallel to
those of the market leader, they will gain much of the market from the leader
while being exposed to very little risk.
1. Counterfeiter/fraudster
2. Cloner/emulator
3. Imitator
4. Adaptor
 Market Nicher
In this niche strategy, the company concentrates on a select few target markets. It is also
called a focused strategy.
1. End-user specialist
2. Vertical level specialist
3. Customer size specialist
4. Specific customer specialist
5. Geographic specialist
6. Product or product line specialist
7. Event specialist
 Entrant Strategy
• According to Lieberman and Montgomery, every entrant into a market, be it
new or not, is classified under the following;
1. Pioneers- are known to open a new market to consumers based off a major
innovation.
2. Close followers- these entrants into the market can also be seen as challengers
to the market pioneers and the late followers.
3. Late followers- those who follow after the close followers are known as the
late entrants. Being a late entrant can seem very daunting, there are some
perks of being a latecomer
Thankyou !