CHAPTER 4

MARKETING ENVIRONMENT
Collecting & analyzing marketing information

By
Sang Monica, PhD
 contents
• Introduction
• Conducting a situation analysis
• The internal environment
• The customer environment
• The external environment
• Collecting marketing data
• Conclusion
• Reference
 Objectives
• Define situation analysis
• Differentiate the following: internal
environment, customer environment and
external environment.
• Know the different sources of data and
information
 Introduction
• This chapter examines key issues in collecting
and structuring marketing information to
assist in the formulation of marketing
strategies.
• Managers in all organizations, large and small
devote a major portion of their time and
energy to developing plans and making
decisions.
Introduction cont…
• Continuous tracking of the buying preference of
target consumers over time is critical. This requires
access to and analysis of data to generate usable
information in a timely manner.
• Marketing managers have to stay abreast with the
trends in the marketing environment since planning
and decision making depends on how well this
analysis is done.
• The most widely used approaches in collection and
analysis of marketing information is situation
analysis.
• the purpose of situation analysis is to describe
current and future issues and key trends as they
affect the three key environments: the internal
environment, the customer environment, and the
external environment.
• Data collected during situation analysis give
the organization a big picture of the issues and
trends that affect its ability to deliver value to
stakeholders. (Charles Lamb, et al; 2004).
 Conducting a situation analysis
• Is perhaps the most important task of the
marketing manager because practically all
decision making and planning depends on
how well he or she conducts the analysis.
• Should be an ongoing effort that is well
organized, systematic, and supported by
sufficient resources.
Cont..
• Situation analysis involves analysis and synthesis to
understand why people, products and organizations
perform they way they do.
• Is not intended to replace the marketing manager in
the decision-making process but to empower him
or her with information for decision making.
Cont..
• Recognizes that data and information are not the
same. Data are not useful until converted into
information.
• It forces managers to ask continually, “How much
data and information do I need?”
Cont..
• Situation analysis is valuable only to the extent that
it improves the quality of the resulting decisions.
Marketing managers must avoid paralysis by
analysis.
• It should provide a complete picture about the
organization’s current and future situation with
respect to the internal, customer, and external
environments.
 Analysis of the internal environment
• Analysis of the internal environment involves a
critical evaluation of the firm’s internal
environment with respect to its objectives,
strategy, performance, allocation of resources,
structural characteristics, and political climate.
 A framework for analyzing the internal
environment
Kottler P. (2017;2012; 2003) provides the
framework: Review of current marketing
objectives, strategy, and performance
1. What are the current marketing goals and
objectives?
2. Are the marketing goals and objectives
consistent with recent changes in the
customer or external environments? Why or
why not?
3. How are current marketing strategies performing
with respect to anticipated outcomes e.g. sales
volume, market share, profitability,
communication, brand awareness, customer
preference, customer satisfaction?
4. How does current performance compare with
other organizations in the industry? Is the
performance of the industry as a whole improving
or declining? Why?
5. If performance is declining, what are the most
likely causes? Are marketing objectives
inconsistent? Is the strategy flawed? Was the
strategy poorly implemented?
6. If performance is improving, what actions can be
taken to ensure that performance continues to
improve? Is the improvement in performance
due to a better-than-anticipated environment or
superior planning and implementation?
• Review of current and anticipated organizational
resources
1. What is the state of current organizational
resources e.g. financial, human, experience,
relationships with key suppliers or customers?
2. Are these resources likely to change for the better
or worse in the near future? How?
3. If the changes are for the better, how can these
added resources be used to meet customer
needs better than competitors?
4. If the changes are for the worse, what can be
done to compensate for these new resource
constraints?
• Review of current and anticipated cultural and
structural issues
1. What are the positive and negative aspects of the
current and anticipated organizational culture?
2. What issues related to internal politics or
management struggles might affect the
organization’s marketing activities
3. What is the overall position and importance of the
marketing function as seen by other functional
areas? Are key executive positions expected to
change in the future?
4. How will the overall market or customer
orientation of the organization (or lack thereof)
affect marketing activities?
5. Does the organization emphasize a long or short-
term planning horizon? How will this emphasis
affect marketing activities?
6. currently, are these positive or negative issues with
respect to motivating employees, especially those in
frontline positions e.g. sales and customer service?
 Analysis of customer environment
• Determines the firm’s current customers in its
target markets, as well as potential customers that
currently do not purchase the firm’s product
offering.
• Can be conducted using the expanded 5W model:
5w model cont..
Who are our current and potential customers?
What do customers do with out products?
Where do customers purchase our products
When do customers purchase our products?
Why (and how) do customers select our products?
Why do potential customers not purchase our
products?
 Analysis of the external environment
• Examines the competitive, economic, political, legal
and regulatory, technological, and sociocultural
factors in the firm’s external environment.
• Includes an examination of the four basic types of
competitors faced by all businesses: brand
competitors, product competitors, generic
competitors, and total budget competitors.
• The analysis of the external environment is
often handled by a team of specialists within
an organization’s corporate affairs
department.
 Marketing data and information
• Can be collected from a wide array of internal,
government, periodical, book, and commercial
sources, as well as through primary and
marketing research.
• Marketing data and information are often
collected through four different types of
primary research: direct observation, focus
groups, surveys and experiments.
• Must be blended from many different sources
to be the most useful for planning purposes.
 Problems that can occur during data
collection
• An incomplete or inaccurate definition of the
marketing problem
• Ambiguity about the usefulness or relevance of
the collected data.
• Severe information overload
• The expense and time associated with data
collection.
• Finding ways to organize the vast amount of
collected data and information.
 conclusion
• This chapter examined several issues related
to conducting a situation analysis, the
components of situation analysis, and the
collection of marketing data and information
to facilitate strategic marketing planning.
• Although situation analysis has traditionally
been one of the most difficult aspects of
market planning, recent advances in
technology have made the collection of
market data and information much easier and
more efficient. A wealth of valuable data and
information are freely available online.
• This chapter also examined the different types
of marketing data and information needed for
planning, as well as many sources where such
data may be obtained.
 References

O. C. Ferrell and Michael D. Hartline, (2008),

marketing strategy. Southwestern publishers.
The society of competitive intelligence
professionals, http://www.scip.org/ci/.
Charles W. Lamb et al;(2004) Marketing, 7th ed.
Southwestern publishers .
Philip Kotler, (2003) a framework for marketing
management. 2nd ed. Prentice Hall.