Marketing Information System and Demand Measurement

1. Marketing Information
System and
Demand Measurement
Dr. Gopal Thapa
Tribhuvan University

2. Marketing Information System
 A marketing information system (MKIS) consists
of people, equipment and procedures to gather,
sort, analysis, evaluate, and distribute needed,
timely and accurate information to marketing
decision makers
 Kotler & Armstrong
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3. Marketing Information System
 MKIS consists of people and procedures dedicated
to accessing information needs, developing
needed information and helping decision makers
use the information to generate and validate
actionable customer and market insights.
 Kotler and Armstorng, 2o16
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4. Marketing Information System
 A marketing information system is a set of
procedures and methods for the regular, planned
collection, analysis and presentation of
information for use in marketing decisions.
 American Marketing Association
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6. Components of MKIS
 Internal record system
 Marketing intelligence
 Decision support system
 Marketing research
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7. Components of MKIS
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8. Internal Record System
 Internal databases are electronic collections of
information obtained from data sources within the
company.
 Kotler & Armstrong
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9. Internal Record System
 Marketing managers rely on data from internal
reports about orders, sales, prices, costs, inventory
levels, receivables, payables and so on.
 The heart of the internal record system is the
order-to-payment cycle.
 Sales representatives, dealers, and customers
dispatch orders to the firm.
 The sales department prepares invoices and
transmits copies to various departments, Out-of-
stock items are back ordered.
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10. Internal Record System
 Shipped items are accompanied by shipping and
billing documents that are sent to various
departments
 Companies need to perform these steps quickly
and accurately, because customers favor firms that
can promise timely delivery.
 Today many companies organize information in
databases- customer databases, product databases,
salesperson databases and so forth- and then
combine data from the different databases.
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11. Internal Record System
 The customer database will contain every
customer’s name, address, past transactions, and
even demographics and psychographics (activities,
interests and opinions) in some instances.
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12. Marketing Intelligence System
 A marketing intelligence system is a set of
procedures and sources managers use to obtain
everyday information about developments in the
marketing environment.
 Kotler & Armstrong
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13. Sources of Marketing Intelligence
 Marketing Managers
 Sales Forces
 Middlemen
 Specialists
 Outsourcing
 Marketing information section
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14. Marketing Decision Support
System
 Marketing decision support system (MDSS) is a
coordinated collection of data, systems, tools, and
techniques with supporting software and hardware
by which an organization gathers and interprets
information from business and the environment
and turns it into a basis for marketing action.
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15. Marketing Decision Support
System
 A decision support system is a procedure that
allows a manager to interact with data and
methods of analysis to gather, analyze, and
interpret information.”
--- Stanton
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16. Components of MDSS
 Data Bank
 Methods Bank
 Model Bank
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17. Marketing Research
 Marketing research as the systematic design,
collection, analysis and reporting of data and
findings that are relevant to a specific marketing
situation facing the company.
 Most large companies have their own marketing
research departments.
 Some small companies can hire the services of a
marketing research firm or conduct research in
creative and affordable ways.
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18. Features of Marketing Research
 Systematic
 Problem oriented
 Objective
 Decision making
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19. Areas of Marketing Research
 Product research
 Advertising research
 Consumer research
 Sales research
 Corporate research
 Competitor research
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20. Marketing Research Process
 Define the problem and research objectives
 Develop the research plan
 Collect the information
 Analyze the information
 Present the findings
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21. Major Concepts in Demand
Measurement
Dr. Gopal Thapa
Member Secretary
Marketing Subject Standing Committee
Tribhuvan University

22. Meaning of Demand and Market
 Demand is want for specific product backed by
purchasing power and willingness to spend
 Market is the set of all actual and potential
customers of a product with demnad
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23. Market
 Potential market
 Available market
 Target/ served market
 Penetrated market
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24. Market
 Potential market: The set of consumers who
profess a sufficient level of interest in a market
offer
 .Available market: The set of consumers who have
interest, income, and access to a particular offer.
 Target market: Part of the qualified available
market the company decides to pursue.
 Penetrated market: The set of consumers who are
buying the company’s products
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25. Levels of Demand Measurement
 Market Demand
 Company Demand
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26. Market Demand
 Market demand for a product is the total volume
that would be bought by a defined customer group
in a defined geographical area in a defined time
period in a defined marketing environment under a
defined marketing program
 Kotler and Keller
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27. Market Demand
 Market demand is the total volume of product in a
:
 Defined customer group
 Defined geographical area
 Defined time period
 Defined marketing environment
 Defined marketing programme
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28. Market Demand
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29. Company Demand
 Estimated share of market demand that a company
could expect to achieve at alternative levels of
marketing expenditure in a defined time period
 Effected by marketing mix
 Based on sales forecasting
 Based on chosen marketing expenditure plan

30. Methods of Estimating Current
Market Demand
 Total market potential
 Area market potential
 Company Market Share

31. Total market potential
It is maximum amount of sales that might be
available to an industry under a given level of market
expenditure during a given time period in given
environmental conditions
Total market potential
= Potential buyer × Average quantity per
buyer × price

32. Demand forecasting
 Potential buyer=10 lakhs
 Average qty per buyer =5
 Price =Rs. 2/unit
 Demand=?
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33. Area Market Potential
 This estimates the market potential of different
territories such as nation, province, region, zone,
district
 Methods
1. Market Build up method
2. Market Factor method

34. Market Build-up Method
 It is based on identifying all the potential buyers in
each area and estimating their potential purchase
in a given period
 This method is used for business markets.
 The calculation is:
Area Market Potential
= Potential buyers × Potential purchase per buyer

35. Market Factor Analysis Method
(Index Method)
 A single market factor is used as an index to
calculate the market potential.
 Suppose, book market potential in Nepal is
directly related to population size and Kathmandu
valley has 10% of total population.
 Then 10% of total book sales is the area market
potential for book in Kathmandu valley
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36. Multiple-factor Index Method
 Multiple-factor index can be calculated by
introducing additional variables and assigning
weights to each variable.
 This method is used for consumer markets
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37. Multiple Factor Index Method
 Suppose, Kathmandu Valley has 10% of Nepal’s
population, 25% of Nepal’s disposable income
and 50% of Nepal’s retail sales.
 Weight given to different factors are;
 0.2for population size
 0.5 for disposable income
 0.3 for retail sales
Area market potential = (0.2×10)+(0.5×25)+(0.3×50)
= 2+12.5+15
= 29.5%
Thus, area market potential in Kathmandu is 29.5% of
Nepal’s total book sales

38. Company Market Share
 Company Market Share
= Company sales × 100
Industry sales

39. Methods of Estimating Future
Demand
 Executive Judgement
 Survey
Survey of Buyer’s intention
Composite of sales force opinion
Survey of Expert opinion
Market test method
Past sales analysis: Time series, statistical demand
analysis, econometrics

40. Practices of MKIS in Nepal
Lack of proper information while taking marketing
decisions
Investment in information system is taken as an
unnecessary expenditure in Nepalese business
scenario.
No separate marketing information system
 Development of MKIS in Nepalese organization is
in tortoise’s pace.

41. Practices of MKIS in Nepal
Marketing decision making is based on past
experience and intuition or rule of thumb.
Marketing information system in private sector is
better than government sector
Internal record system is major portion of MKIS
in Nepalese organization.
There is growing use of computer to maintain
data warehouse.
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42. Practices of MKIS in Nepal
 Internal record system in government organization
is very poor.
Eg: information about citizenship, land
ownership, driving license, vehicles, etc.
 Use of marketing intelligence system is very
limited.
 It is considered as a waste of financial resources.
 Usually, marketers use newspaper ad tracking,
visiting competitors' website, etc.
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43. Practices of MKIS in Nepal
 Some marketers use college students who works
as an intern to collect information about
competitors.
 Nepal police, government staffs are also used for
marketing intelligence.
 Presence of business spy is not heard till date in
Nepal.
 Marketing research is still luxury in Nepal.
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44. Practices of MKIS in Nepal
 Most of the research are conducted by university
students, Nepal Rastra Bank or donors such as
Asian Development Bank, World Bank, etc.
 Research conducted by students are mainly
academic research.
 Research wings of most of the University are at
survival stage.
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45. Practices of MKIS in Nepal
 Multi-National Companies sometimes use
outsourcing techniques for marketing research.
 Full service ad agencies are also providing
marketing research service to their clients based
on their requirements
 Some popular media are also conducting
marketing research
 Medium scale marketing research is dominated by
ad agencies and freelance researchers
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46. Practices of MKIS in Nepal
 Marketing research and Consulting firms are
increasing in Nepal day by day.
 Nepal Government is not research friendly till date
 Use of decision support system in Nepal is getting
popular day by day.
 Use of software for data analysis is increasing.
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47. Practices of MKIS in Nepal
 Even private sector organization and college or
university are also conducting research and data
analysis training frequently.
 Global research firms have already entered in
Nepalese market to conduct research, research
training and data processing.
 Scope and importance of marketing information
system will definitely increase in the days to
come.
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48. Any Queries?
Thank You
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