kerinmarketing80

STEP 3: COLLECT
RELEVANT INFORMATION

•Using Information Technology to
Trigger Marketing Actions

•The Marketing Manager’s View of
Sales “Drivers”

•

•Key Elements of an Information System

•The Challenge in Mining Marketing Data

•Data Mining: A New Approach to Searching the Data Ocean

Information Technology

Information technology involves designing and managing computer and communication networks to provide a system to satisfy an organization’s needs for data storage, processing, and access.

Data mining is the extraction of hidden predictive information from large databases.

FIGURE 8-8 Product and brand drivers: factors that influence sales

FIGURE 8-9 How marketing researchers and managers use information technology . . .

STEP 4: DEVELOP FINDINGS

•Analyze the Data
•Present the Findings

FIGURE 8-10 Converting data into marketing actions: What to do about supermarket chains . . .

STEP 5: TAKE
MARKETING ACTIONS

•Identify the Action Recommendations
•Implement the Action Recommendations
•Evaluate the Results

1. What does a marketing manager mean when she talks about a sales driver?

A: “Drivers” are the factors that influence buying decisions of a household or organization and, hence, sales.

2. How does data mining differ from traditional marketing research?

A: Traditional marketing research typically involves developing a hypothesis about a driver and then collecting data; marketing researchers than try to collect information to attempt to verify the truth of the hypothesis. In contrast, data mining is the extraction of hidden predictive information from large databases.

3. In the marketing research for Kellogg Pop Tarts, what is an example of (a) a finding and (b) and action?

A: Examples of a finding can be found in Figure 8-10, which summarizes results—7% of chains raised price over 20 cents; these chains are concentrated in New York. Examples of an action from Figure 8-10 include “Team schedules visits to key NY supermarket accounts with price increases over 20 cents.

MARKET AND
SALES FORECASTING

•Basic Forecasting Terms

•Market or Industry Potential
•Sales or Company Forecast

•Two Basic Approaches to Forecasting

•Top-Down Forecast
•Buildup Forecast

•Specific Sales Forecasting Techniques

• Judgments of the Decision Maker

§Direct forecast
§Lost-horse forecast

•

• Surveys of Knowledgeable Groups

§Survey of buyers’ intentions forecast
§Salesforce survey forecast
§Jury of executive opinion forecast
§Survey of experts forecast

• Statistical Methods

§Trend extrapolation

Market Potential

Market potential (or industry potential) refers to the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firms.

Sales forecast (or company forecast) refers to the maximum total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts.

Top-Down Forecast

A top-down forecast involves subdividing an aggregate forecast into its principal components.

Buildup Forecast

A buildup forecast involves summing the sales forecasts of each of the components to arrive at the total forecast.

A direct forecast involves estimating the value to be forecast without any intervening steps.

Lost-Horse Forecast

A lost-horse forecast involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast.

Survey of Buyers’
Intentions Forecast

A survey of buyers’ intentions forecast involves asking prospective customers whether they are likely to buy the product during some future time periods.

Salesforce Survey Forecast

A salesforce survey forecast involves asking the firm’s salespeople to estimate sales during a coming period.

Jury of Executive
Opinion Forecast

A jury of executive opinion forecast involves asking knowledgeable executives inside the firm about likely sales for a coming period.

Survey of Experts Forecast

A survey of experts forecast involves asking experts on a topic to make a judgment about some future event.

Trend Extrapolation

Trend extrapolation involves extending a pattern observed in past data into the future.

FIGURE 8-11 Buildup approach to a two-quarter sales forecast for Apple Computer products

FIGURE 8-12 Linear trend extrapolation of sales revenues of Xerox . . . 1999

1. What is the difference between the top-down and buildup approaches to forecasting sales?

A: A top-down forecast involves subdividing an aggregate forecast into its principal components. A buildup forecast involves summing the sales forecasts of each of the components to arrive at the total forecast.

2. How do you make a lost-horse forecast?

A: Starting with the last known value of the item being forecast, Listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast.

3. What is linear trend extrapolation?

A: A linear trend extrapolation involves extending a pattern observed in past data into the future. To draw a trend line, plot the sales revenue data from past time periods, fit a straight line between these points, and extend the line to future time periods to give forecast values.

Chapter 8 - Summary

Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions to improve an organization's marketing activities. The chapter uses a five-step marketing research sequence that can lead to better decisions.
Defining the problem, step 1 in the sequence, involves setting the research objectives and identifying possible marketing actions.
Developing the research plan, step 2, requires specifying constraints on the problem, identifying data needed, and determining how to collect it.
Collecting relevant information, step 3, includes considering pertinent secondary and primary data. Secondary data have been recorded prior to the project and include those pieces of information internal and external to the organization. Primary data are collected specifically for the project and are obtained by either observing or questioning people.
Information technology enables massive amounts of marketing data to be stored, processed, and accessed. Databases can be queried using data mining to find statistical relationships useful in marketing.
Developing findings is step 4. It involves analyzing data and presenting findings to decision makers.
Step 5 in the sequence involves identifying and implementing marketing action recommendations and evaluating results.
Two basic approaches to forecasting sales are the top-down and buildup methods. Three forecasting techniques are judgments of individuals, surveys of groups, and statistical methods.
Individual judgments are the most widely used forecasting methods. Two common examples are direct and lost-horse forecasts.
Asking questions of groups of people who are knowledgeable about likely future sales is another frequently used method of forecasting. Four such groups are prospective buyers, the salesforce, executives, and experts.
Statistical forecasting methods, such as linear trend extrapolation, extend a pattern in past data into the future.

Chapter 8 ( conti..)

Marketing: Turning Marketing Information into Action