Components of a Modern Marketing Information System

The major responsibility for identifying significant marketplace changes falls to the company’s marketers. 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,

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. 1. 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

Marketing Intelligence

1. 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

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Analyzing the Macroenvironment

Successful companies recognize and respond profitably to unmet needs and trends. 1. NEEDS AND TRENDS Dockers was created to meet the needs of baby boomers who could no longer fit into their jeans and wanted a physically and psychologically comfortable pair of pants. Enterprising individuals and companies create new solutions to similarly unmet needs.

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Forecasting and Demand Measurement

Understanding the marketing environment and conducting marketing research (described in Chapter 4) can help to identify marketing opportunities. The company must then measure and forecast the size, growth, and profit potential of each new opportunity. Sales forecasts prepared by marketing are used by finance to raise cash for investment and operations; by manufacturing to

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The Scope of Marketing Research

Marketing managers often commission formal marketing studies of specific problems and opportunities, like a market survey, a product-preference test, a sales forecast by region, or an advertising evaluation. It’s the job of the marketing researcher to produce insight to help the marketing manager’s decision making. Formally, the American Marketing Association says:2 Marketing research is

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The Marketing Research Process

To take advantage of all the resources and practices available, good marketers adopt a formal marketing research process that follows the six steps shown in Figure 4.1. We illustrate these steps in the following situation.17 American Airlines (AA) was one of the first companies to install phone handsets on its planes. Now it’s reviewing

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Measuring Marketing Productivity

Although we can easily quantify marketing expenses and investments as inputs in the short run, the resulting outputs such as broader brand awareness, enhanced brand image, greater customer loyalty, and improved new product prospects may take months or years to manifest themselves. Meanwhile internal changes within the or­ganization and external changes in the marketing

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MARKETING EXCELLENCE IDEO

IDEO is the largest and one of the most influential design consultancy firms in the United States. The company has created many recognizable design icons of the technol­ogy age, including the first laptop computer, the first mouse for Apple, the Palm V PDA, and the TiVo digital video recorder. Beyond its high-tech wizardry, the

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MARKETING EXCELLENCE INTUIT

Intuit develops and sells financial and tax solution software for consumers and small and medium-sized businesses. The company was founded in 1983 by a former Procter & Gamble employee, Scott Cook, and a Stanford University programmer, Tom Proulx, after Cook realized there must be a better way to automate his bill-paying process. For almost

Building Customer Value, Satisfaction, and Loyalty

Managers who believe the customer is the company’s only true “profit center” consider the traditional organiza­tion chart in Figure 5.1(a)—a pyramid with the president at the top, management in the middle, and frontline people and customers at the bottom—obsolete.2 Successful marketing companies invert the chart to look like Figure 5.1(b). At the top are

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Maximizing Customer Lifetime Value

Ultimately, marketing is the art of attracting and keeping profitable customers. Yet every company loses money on some of its customers. The well-known 80-20 rule states that 80 percent or more of the company’s profits come from the top 20 percent of its customers. Some cases may be more extreme—the most profitable 20 percent

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Cultivating Customer Relationships

Companies are using information about customers to enact precision marketing designed to build strong long­term relationships.74 Information is easy to differentiate, customize, personalize, and dispatch over networks at incredible speed. But that capability cuts both ways. For instance, customers now comparison-shop quickly and easily through sites such as Bizrate.com, Shopping.com, and PriceGrabber.com, and Epinions.com

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MARKETING EXCELLENCE AUDI

The year 1899 marked the establishment of August Horch & Cie, the first car manufacturing company founded by August Horch. As a pioneer in automotive engineering, Horch had previously worked with Carl Benz, inventor of modern automobiles with combustion engines. Horch left his company in 1909 because of dif­ferences with its co-management and supervisory

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MARKETING EXCELLENCE Harley-Davidson

Harley-Davidson, a U.S. brand synonymous with beauti­ful motorbikes, inspires many to own its customized bike with iconic engine. Today the brand is sought after not only in the United States but globally too. What explains its wide global acceptance, and the strong sense of brand loyalty among Harley-Davidson motorbike owners? Harley-Davidson dealers, ranging from

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What Influences Consumer Behavior?

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.2 Marketers must fully understand both the theory and the reality of consumer behavior. Table 6.1 provides a snapshot profile of U.S. consumers. A consumer’s buying behavior

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Key Psychological Processes

The starting point for understanding consumer behavior is the stimulus-response model shown in Figure 6.1. Marketing and environmental stimuli enter the consumer’s consciousness, and a set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions. The mar­keter’s task is to understand what happens in the consumer’s consciousness

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The Buying Decision Process: The Five-Stage Model

The basic psychological processes we’ve reviewed play an important role in consumers’ actual buying decisions. Table 6.2 provides a list of some key consumer behavior questions marketers should ask in terms of who, what, when, where, how, and why. Smart companies try to fully understand customers’ buying decision process—all the experiences in learn­ing, choosing,

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Behavioral Decision Theory and Behavioral Economics

As you might guess from low-involvement decision making and variety seeking, consumers don’t always process information or make decisions in a deliberate, rational manner. One of the most active academic research areas in marketing over the past three decades has been behavioral decision theory (BDT). Behavioral decision theorists have identified many situations in which

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MARKETING EXCELLENCE DISNEY

Few companies have been able to connect with their audience as well as Disney has. From its founding by brothers Walt and Roy Disney in 1923, the Disney brand has always been synonymous with trust, fun, and qual­ity entertainment for the entire family. Walt Disney once stated, “I am interested in entertaining people, in

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