Page 34 - DMGT408DMGT203_Marketing Management

Unit 2: Understanding the Marketplace and Consumers

Identify the constituents to micro and macro environment Notes
Explain the concept of Management Information Systems
Realise how MIS helps in gaining consumer insight

Discuss the marketing research process
Introduction

Many people believe that organisations can survive if they are sure about the management of
their internal systems like business processes, flow of goods and internal practices of quality
and cost control. Most organisations devote a large part of their effort in managing the internal
controllable elements, whereas they need to respond and adapt to the external environmental
changes. Though they cannot significantly influence the external environment but they can be
responsive to larger social and other environmental changes, which is likely to affect their
business in both short run and long run. It is imperative for an organisation to understand the
market as well their consumers really well.

To gain a better understanding of the marketplace and consumers, modern marketers use
Marketing Information System (MIS). MIS assesses the information needs of different managers
and develops the required information from supplied data in time regarding competition,
prices, advertising, sales, distribution and market intelligence etc. Most of today’s information
systems are computer applications in a sophisticated data-driven age. These enable marketers to
be better informed about their customers, potential customers and competitors. New applications
are being developed at a faster pace.

In this unit, you will be introduced to various constituents of the marketing environment that
affect an organisation. In addition to this, you will also learn the techniques used by the companies
to analyse the marketplace and how companies use MIS and market research to gain consumer
insight.

2.1 Environmental Analysis

Environment plays a critical role in business, especially in marketing. The marketing environment
is constantly changing and thus presenting new opportunities and threats. A marketer’s task is
to correctly analyse the environment and design a marketing mix, which will fit the environment.
The ultimate purpose of the environmental analysis is to facilitate the firm’s strategic response
to the environmental changes. The firm can attain its objective with strategic planning in order
to cash in on environmental opportunities.

2.1.1 Structure of the Marketing Environment

The consumer occupies the core/central position of all business activities and hence occupies the
centre of the marketing environment. The organisation with its resources and having a policy
and structure surrounds the consumer with its particular market offering as do its competitors,
suppliers and other intermediaries. This microenvironment of marketing is again affected by
the macro environment, which consists of the government, technical, political, social, economic
factors. This is graphically represented by Figure 2.1.

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