Marketing Management

UNIT-1
INTRODUCTION
 Syllabus:
1. Introduction
2. Marketing opportunity Analysis
3. Marketing Information System and Demand analysis
4. Identifying Market Segment, Target and Position Strategies
5. Competitors Analysis
6. Implementation of marketing Program: Product Strategies
7. Implementation of Marketing Program: Pricing Strategies
8. Implementation of Marketing Program: Channel and logistic Strategies
9. Implementation of Marketing Program: Integrated Marketing
Communication Strategies
[Link] and Control of Marketing
 Meaning of MARKETING
•Marketing activities are all around us. It is a part of human beings.
Marketing is performing in different types of organizations ,professions
and businesses. It is by the society ,for the society .so, it is a social activities
by which an individual or groups obtain what they need and want.
Marketing is defined as the activities between the buyers and sellers to
transfer the ownership of product from the production to consumption
through the medium of exchange.
•Marketing is an organizational function and activities for creating,
communicating and delivering values to costumers by maintain long term
relationship.
•So, we can say that it is a process which consists of understanding
consumer’s needs and wants, building costumers relationships and
capturing value to create profit and costumers [Link] is basically
meeting various needs for targeted markets ,identifying those needs and
planning how to get them through product ,services ideas and methods.
Philip Kotler defined marketing as "Satisfying needs and
wants through an exchange process" and a decade later
defines it as “a social and managerial process by which
individuals and groups obtain what they want and need
through creating, offering and exchanging products of value
with others.

NOTE
Yesterday :marketing-selling
Today: marketing-satisfying costumers
Tomorrow-marketing-building relationship and networks with
costumers
 Characteristics of marketing
Social process
Activities:
I. Product related
[Link] related
[Link] related
[Link] related
Costumer satisfaction
Exchange relation
Achieve objectives
Dynamic environment
 Core marketing concepts
[Link] , wants and demands
Need: It is state of feeling deprivation. They include basic physical
needs for food, clothing, warmth and safety, Social needs for belonging
and affection and individual needs for knowledge and self expression. :
Physiological, Social, Safety, Esteem ,Self actualization .
Want: It is the form of needs that is shaped by culture and individual
personality. A want is a desire for a specific product or service to satisfy
the underlying need.
Demand: It refers to the amount of products or services that customers
wish to buy at any given price level.
2 Products , service and experiences
3. Customer value and satisfaction: Value= Benefit/ cost = ( Functional
+ Emotional ) benefit/ ( Monetary+ time+ Energy+ Psychic)Cost .
The main aim of marketing is to create satisfied customer. It can be
measured by comparing between customer’s expectation and product
performance.
4. Exchange and transaction
[Link] channels
Communication channels : Radio ,tv ,mail ,telephone, mobile, websites
etc.
Distribution channels : Agents, wholesalers, retailers , distributers etc.
Service channels : Warehouses, transportation companies, banks
insurance companies, etc.
[Link] chain: Participating companies or stakeholders. It is a
longer channel stretching from raw materials to components to
finished products carried to final buyers.
8. Competition: Brand competition , product type competition,
generic competition, geographic competition
9. Market:
10. Marketer:
11. Marketing environment:
12. Marketing mix: 7Ps ( product , price, place, promotion ,people ,
physical evidence, process )
13. Marketing planning
 Company Orientation towards the Market place

1) Production concept: It believes that the customer buy those

products which are widely available and low in cost. This concept
ignores the customer’s needs. Although it is one of the oldest concept,
Chinese companies are still implementing this concept, because
Chinese products are cheaper and widely available in market.

Starting Point Focus Means Organizational

Goal

Factory Mass production Low price and Profit through

mass production mass production
 2) Product Concept
Starting Point Focus means Organizational goal

Factory Product quality High quality Profit through long

Innovation -lasting and high
Performance performance
guarantee product

It focuses that customers will favor those products that offers the
most in quality, performance and innovative features.
 3) The Selling Concept
Starting Point Focus Means Goals

Factory Existing Product Aggressive selling Profit through high

Heavy promotion sales volume

It is very popular concept which focuses on “we sell what we make”

rather than what customers want .Goods are not bought but sold-
Philosophy.
 4) Marketing Concept
Starting Point Focus Means Goals

Target Market Customer’s needs Integrated Profit through

and wants marketing customer’s
satisfaction

It is concerned with the achievement of organizational goal rather

than an increased in sales volume . It is consumerist concept. It
believes in “we make what we can sell”.
 5) The Societal Marketing Concept
It holds that the social responsibilities of marketing. It focuses on the marketing
activities from social point of view. It believes that marketing strategies should
deliver value to customers in a way that maintains and improves both the
consumer’s and society’s well-being.

society Starting focus means ends/

point goal

market Social Responsib Profit

Societal needs le for through
marketing social and consumer
concept ethical and social
issues. wellbeing.
consumer company
 [Link] marketing concept :Nowadays marketing is complex and comprehensive. People’s
needs and a=demands are interrelated with various dimensions of life. It focuses that “everything matters”.

g nagement Products and

tin ent ma
e
rk m Senior services
Ma part Other departments
Channels
de communication

Internal
Integrated
marketing
marketing

comm Holistic
unity
marketing
ics
eth Social
responsible Relationship
marketing marketing Employee

legal customers
d and Marketing
n r
Bra tome ent Financial entity partners
us i ro nm
c env
 HOLISTIC MARKETING CONCEPT

• It recognizes that a broad ,integrated perspective is necessary to get

success in marketing so according to Philip Kotler “Holistic marketing
concept is based on the development , design and implementation of
marketing programs , processes and activities that recognizes their
breadth and interdependencies. It is based on four broad themes .They
are:
1) Relationship Marketing
2) Integrated Marketing: 4 Ps with 4cs
4Ps:Product,price,place,promotion
4Cs:Customer solution , customer cost , customer
convenience , communication
3) Internal Marketing : marketing department ,other departments
4) Performance Marketing: financial accountability, social responsibility
 Holistic Marketing Concept
Starting Focus Means Goal
point

Target All Integrated marketing , Profit through

market marketin relationship , internal , marketing
g matters social responsibility think and wide
and performance marketing
marketing activities
 Concept of customer value:
•Value= Benefits/costs
• Customer buy products and services that have the highest delivered
value. so, customer value is the difference between benefits and cost.
So, marketing firms can create values in nine activities of value chain
analysis. The value chain is a systematic approach to examining the
development of competitive advantage. The chain consists of series of
activities that create and build values.
•1) Primary activities: i) Inbound logistics ii) Operations iii) Outbound
logistics iv) Marketing and sales v) Service
•2) Support activities: i) Procurement ii) Technology development iii)
Human resource management
• iv) Firm’s infrastructure
•
•
 Value chain Analysis:

• Value chain analysis is a strategy tool

used to analyze internal firm
activities. ... Value chain represents all
the internal activities a firm engages
in to produce goods and services. VC
is formed of primary activities that
add value to the final product directly
and support activities that
add value indirectly.
• Benefits= Functional benefits + Emotional benefits
• Costs= Monetory cost +Time cost + Energy cost + Psychic cost
• Hence, Customer delivered value is the difference between total customer
value and total customer cost.
• CDV=TCV-TCC
• Where,
• CDC=Customer delivered value
• TCV=Total Customer value
• TCC=Total customer cost.

• TCV=PV+SV+PV+IV (Product value, Service Value, Personal Value, Image

Value)
• TCC = MC + TC + EC + PC ( Monetory, Time , Energy, Psychological )
• Value chain analysis is a strategy tool used to analyze internal firm activities.
Its goal is to recognize, which activities are the most valuable (i.e. are the
source of cost or differentiation advantage) to the firm and which ones could
be improved to provide competitive advantage. In other words, by looking
into internal activities, the analysis reveals where a firm’s competitive
advantages or disadvantages are. The firm that competes through
differentiation advantage will try to perform its activities better than
competitors would do. If it competes through cost advantage, it will try to
perform internal activities at lower costs than competitors would do. When a
company is capable of producing goods at lower costs than the market price
or to provide superior products, it earns profits.
• M. Porter introduced the generic value chain model in 1985. Value chain
represents all the internal activities a firm engages in to produce goods and
services. VC is formed of primary activities that add value to the final product
directly and support activities that add value indirectly.
 Customer Satisfaction
• It is the fulfillment of needs or wants of customers. Satisfaction refers to the buyer’s
state of being adequately rewarded by the purchase decision. Satisfaction is a
person’s feeling of pleasure or being adequately rewarded in a situation. Customer
satisfaction is the post-purchase outcome where a customer compares the expected
benefit with the actual benefit received from the use of product.
• It is the amount of overall positive feeling of customers towards their products. If:
• Perception is better than an expectation
• i.e P>E = Very Satisfied
• Perceptions are equal to expectations
• i.e P=E = Neutral
• Perception is worse than expectation
• i.e P<E = Very Dissatisfied
Hence: high customer satisfaction leads to high customer loyalty. It creates emotional
bond of customer with the brand.
 Creating Long Term Loyalty Relationship

• Creating loyal customers is at the heart of every business.

• Without customers no business generate profit.
• So loyalty is a willingness of the buyer to purchase from the
sellers without an extensive evaluation of alternatives.
• There are two types of loyalty:
Behavioral Loyalty
Attitudinal Loyalty
So, marketers need to build long term relationship with such
loyal customers.
• Interacting with customersBuilding Loyalty
• Developing loyalty programs
• Creating institutional ties: Manage orders, payrolls and inventory. Also supply with special
equipment or computer links.
• Integrate the voice of the customers.
• Create superior products, services and experiences for the target market.
So , company should pay attention to build loyalty and retention of customers. For that they
need to improve in different aspects . Such as:
1)Customer relationship management
2)Relationship marketing: the ongoing process of engaging in cooperative and
collaborative activities with immediate and end –user customers to create mutual
economic value.
3)Delivering customer value: best cost ,best product, best service
4)Providing customer satisfaction
5)Attracting and retaining customers
• Customer Relationship Management:
It is the combination of policies, processes, and strategies implemented by an
organization to unify its customers interactions and provide means to track
customer information.
It is developed to identify the most valuable customer, to design special
programs for different set of customers and train customer relationship
employees to take care of the customer. Customer relationship managements
involves three areas i.e.
• Marketing information system
• Sales force management
• Customer service system
• Relationship Marketing:
• It is building long –term mutually satisfying relations with customers in order to earn
and retain their long-term loyalty. In other word, it is the process of building mutually
satisfying relations with customers and other stakeholders. It creates a long term
trusting , win -win relationship with valued customers, suppliers, distributors, dealers
and other stakeholders.
Philip Kotler said, “ relationship marketing is the process of creating , maintaining, and
enhancing strong value laden relationship with customers and other stakeholders.”
Importance of relationship Marketing:
Long term Relation
Customer Satisfaction
Loyal customers
Development of new partnership
Long term profit
Identification of strength and weakness
Customer Relationship Building Process:

• Suspects
• Prospects
• First time users
• Repeat customers
• Clients
• Members
• Advocates
• Partners
 MARKETING MANAGEMENT
•It is the process of managing all marketing resources [Link] involves
planning,organizing,directing,controlling,and decision making .The main
function of marketing management are centered on 3 major activities.
[Link] demand
[Link] demand(promotional activities)
[Link] demand(marketing channels )
•Task of Marketing Management: Developing marketing strategy, capturing
marketing insights, connecting with customers, building strong brands,
shaping the market offering, delivering value.
•Key element of marketing management
[Link] planning
[Link] implementing
[Link] controlling
 PROCESS OF MARKETING MANAGEMENT
• Situation analysis
1.5C analysis(company,customers,competitors,collaborators and
climate)
[Link] analysis
[Link] analysis
• Formulation of marketing plans and programs
[Link] job to different departments
2. creating authority and responsibility relationship
[Link]fication of work
[Link] utilization of resources
[Link] channel of communication, reporting system etc.
• Program implementation
1. Assigning task
2. Preparation of organizational structures
3. Maintain coordination and cooperation
4. Creating long term relationships with customers
• Marketing control
1. Measuring and evaluating the results of plans and activities
2. Taking corrective actions.
 Chapter:-2
Marketing Opportunity Analysis
• Meaning of Environment : Marketing environment consists of
those factors or elements which directly or indirectly influence
the organization’s ability. It is made up of a micro and macro
environment . Marketing environment offers both
0pportunities and threats . These forces may affect the
performance of marketing management and maintained
successful relation with target customers. So, market
opportunities are the favorable conditions in the environment.
Market opportunities are situated in the environment and
market is the source of opportunities . customers wants,
economic benefits, product diversification etc.
• Opportunities are classified into :
•1) Target Markets
•2) Market requirements:
• Functional benefits ( Quality, shape, size, design, function, price, brands, packaging
etc.)
•Service benefits ( counseling, installation, home delivery, guarantee, warranty,
money refund, repair and maintenance etc.)
•Emotional benefits ( brand, status etc.)
•3) Market Development: advertising, personal selling, sales promotion, publicity and
public relation
•4) Market size.
Market opportunities are from different sources. Such as:
1) short supply
2) Improvement
3) Innovation
4) Weak competitors
5) Change customer’s want
 Marketing Environment
• It is the sum total of all forces or elements which influence the development of organizational activities .There are two
types of marketing environment. They are:

• 1) Micro Environment 2) Macro Environment

Internal Micro Environment:
organizational objectives
organizational polices
Organizational Resources:( Physical, Human , Finance)
Organizational culture
Organizational structure
Marketing Activities
External Micro Environment:
Suppliers
Marketing Intermediaries
Customers
Competitors
Public: i) Financial ii) Citizen-action iii) Local public iv) General public v) Internal public etc .
 Macro Environmental Trends
• According to Philip Kotler and Gray Armstrong , “A company’s marketing environment
consists of the factors and forces outside marketing that affect marketing management
ability to develop and maintain successful relationship with target customers.”
Every marketing organization can get opportunities from [Link], they need to
recognize and respond profitably to macro environmental trends such as trend and mega
trends.
Trend: It is the direction or sequence of events that has some momentum and durability .
Marketers can find many opportunities by identifying trends. The trend of buying different
goods by customers create transactions . Hence: some of the emerging trend in Nepal are
as follows.
i) Women participation in work
ii) Self- service stores
iii) Entertaining in resorts , restaurant, and bars
iv) Student’s crowds in computer education
v) Home delivery services
vi) Use of herbal products VI) Online shopping v) Use of social media vi) People joining
health club
 Mega Trends:
• Mega trends are large changes in social, economic, political and technological forces of
the environment . Some example of mega trends are :
• The booming global economy
• Free market System
• Global lifestyles and cultural nationalism
• Privatization policy
• Women on leadership
• Open university system
• Westernization of life styles
• Liberalization and globalization
• Rapid change in Technology
• Increasing use of information Hence: these mega trends and trends create marketing
opportunities for the concerned marketing firms.
 Macro Environmental Forces
• 1) Demographic environment: a) population size b) population Growth c) Age
factor d)population Distribution e) Migration f) Urbanization
• 2) Economic Environment:
• A) Economic system: i) free market economics ii) Mixed economics
• B) Economic policies: i) Monetary policy ii) fiscal policy : It deals with the collection
and spending of money by the government . iii) Industrial policy
• C) Economic conditions: i) Income distribution ii) Business cycles iii) Inflation:
Inflation refers a sustained rise in the general price level of goods and services .
Inflation reduces the purchasing power of consumers . iv) Stage of economic
development v) Natural resources
• D) Regional economic Group: SAARC, EU, ASEAN etc.
• E) Globalization
3) Natural Environment:
a) Natural resources
b) Location
c) Topography
d)Climate
4) Technological Environment:
a)Level of technology: Manual technology, Mechanized technology, Automated technology, Computerized
Technology, Robotized technology
b) Pace of technological change:
c) Technology Transfer
d) Research and Development
5)Political- Legal Environment
a) Political environment: i) Political system ii) Political institution ( Legislature, Executive,
Judiciary) iii) Political Philosophies iv) Pressure group
b) Legal Environment: i) Laws ii) Courts iii) Laws Administrators
6) Socio- Cultural forces:
a) social Environment: i) Demographics : Population size , Population growth , Age
factor, Population Distribution , Migration , Urbanization
Ii)Social Institutes: Family, Reference group, Social class,
iii) Social change and mobility
iv) Life cycle
b) Cultural Environment: i) Religion ii) Attitude iii) Values and beliefs iv)
Language

Corporate and Divisional Strategic Planning: Strategic

planning is concerned with those strategic decision which are
action oriented programs in order to give the organization in
an unified direction to achieve the company mission ,
objectives and goals . It is related with that strategic decision
which is planned course of action. Strategic planning can be
formulated at corporate level and divisional level . It is the
direction and road map of an organization over a long time. At
the corporate level, strategies are formulated according to
organization-wise policies. On the other hand at the divisional
level strategies are formulated by each business unit to make
the best use of its available resources . During the preparation
of corporate and divisional strategic planning, marketing firms
need to undertake the following activities.
 1) Defining the corporate Mission
2) Establishing Strategic Business Unit
3) Assigning Resources to each Strategic Business Unit: Under this , various models are available
such as SBU model, BCG model, GE model etc.
4) Assessing Growth Opportunities: a) Intensive growth b) Integrative Growth c) Diversification
Growth d) Downsizing and divesting older Business.
5) Organization and organizational Culture.
Business Unit Strategic Planning:
After the corporate plan is made, company go for business unit level planning. Large
organization operate several businesses. Each business may require its own strategic
plan. So they classify their business into strategic business unit for the purpose of
developing separate planning to allocate and assign their resources effectively. There
are different step involved in business unit strategic planning.
i. Defining business mission
ii. Swot analysis:
iii,. Goal formulation: “SMART”:
iv. Strategy formulation: a) differentiation b) focus c) product or service alliance d)
promotional alliance e) price collaboration f) logistics alliances
v. Program formulation:
vi. Strategic implementation
vii. Control and feed back
Assigning Resources to Strategic Business Unit
Nowadays most of the companies are multiproduct, multimarket and multiunit businesses. In such
companies strategies cannot be developed at the top management for the overall operation. So they have
to formulate strategic planning according to business units to allocate resources. For this business form
may have to use many techniques to assign resources. They can use some business portfolio evaluation
models which are as follows:
1) Strategic Business Unit Model(SBUM) : it is one 0f the popular model to assign resources
to business unit . SBU is a distinct unit of a business that develops its own strategic
vision and direction. It is profit centered which focuses on product offering and market
segment. In organization, SBU display product and customer group similarities. The SBU
has its own strategies rather than shared strategies. Its characteristics are separate
planning, own set of competitors and separate management. So SBU model can be used
as an analytical tool for evaluating marketing opportunities of units to decide resource
allocations. SBU uses two criteria:
a) Industry maturity: embryonic, growth, maturity and aging
b) Competitive position: leading, strong, favorable, tenable, weak, non-viable
Basic strategies: i build strategy
ii maintain
iii liquidate Hence: SBU model is a unit that stands alone from the rest of the firm, has its own
competitors and its own manager, and responsible for strategic planning and profits.
The BCG matrix provides a graphics presentation for an organization to examine the
different business in its portfolio on the basis of their relative market shares and
market growth rate. This model was developed by BCG( Boston Consulting Group) with
the help of Bruce D. Henderson in 1970s.
It is a portfolio analysis tool that helps manager to develop organizational strategy. It
helps to identify high growth prospect by categorizing the companies product
according to growth rate and market share. By optimizing positive cash flow in high
potential product, a company can capitalize on market share growth opportunities. It is
a business tool to evaluate the potential of business portfolio and market opportunities .
In this model the four shells of matrix have been termed as stars, cash cow, question
mark and dog. Each of these shells represent a particular type of business or SBU.
1) Star : Stars represent the high growth rate and high market share business unit.
Stars are both cash generator and users . So, it requires large amount of cash to support
their rapid market growth and they generate large amount of cash for the
organization .It has both cash outflow and inflow in huge amount. In Nepal noodles
companies, education sectors, soft drinks industries, electronic and
telecommunications, fast foods are standing in this position.
Boston Consulting Group(BCG) Model
 2) Question Marks( High growth, low market share):

• Question marks are the products with low relative market shares and high
market growth rate. They do not generate much cash . The questions are raised
to gain market share to become a star and eventually cash cows . So, question
mark must be carefully analyzed in order to determine whether they are
worth the investment to grow market share. In Nepal , carpet industries, FM
radio service, Hotel businesses etc are in this position.
• 3) Cash Cow: It is left- left cell representing business unit having a large
share market and low market growth rate. It means need more investment . It
generate stable cash flow. Cash is used only to meet the financial demands of
the organization such as to cover administration cost, research and
development cost, pay dividends to shareholders . In Nepal Chaudhary group,
Tuborg beer for Khetan, Hulas steels etc are in cash cow position.
Dogs- low Growth, Low Market Share:
Dogs are in the l0wer right quadrant representing business unit
having lower market share and lower market growth rate. They
neither generate much cash nor consume a large amount of cash.
The business units run in a loss or a very low profit. This happens
due to change in technology, out of fashion and design, economic
crises, recession, political change, etc. So company should not
invest.
From the above description of the BCG matrix, it is clear that its
major advantage is that it offers a facility for a visual examination
of the portfolio of the business of a company. So this model
applies to inputs : Market growth and Market share to a portfolio
of segment or business and then draws the attention about how
resources should be allocated across the portfolio.
 General Electric (GE) Model:
• GE Approach to Strategic Planning
• The GE / McKinsey matrix is a model used to assess the strength
of a strategic business unit (SBU) of a corporation. It
analyzes market attractiveness and competitive strength to
determine the overall strength of a SBU. The GE Matrix is plotted
in a two-dimensional, 3 x 3 grid.
 Advantages of GE model

• 1) It used 9 cells instead of 4 cells of BCG

• 2) It considers many variables and does not lead to simplistic conclusions
• 3) High/medium/low and strong/average/low classification enables a
finer distinction among business portfolio
• 4) It uses multiple factors to assess industry attractiveness and business
strength, which allow users to select criteria appropriate to their situation
 Limitations of GE model

• 1) It can get quite complicated and cumbersome with the increase in

businesses
• 2) Though industry attractiveness and business strength appear to be
objective, they are in reality subjective judgements that may vary from
one person to another
• 3) It cannot effectively depict the position of new business units in
developing industry
• The main contents of a marketing plan are:
• Executive Summary.
• Situational Analysis.: Market description, product review, competition
review, distribution review
• Opportunities / Issue Analysis - SWOT Analysis.:
• Objectives : On the basis of ‘SMART’
• Marketing Strategy: Product strategy, price strategy, place strategy,
promotion strategy
• Action Program (the operational marketing plan itself for the period under
review)
• Financial Forecast.
• Controls.
Component of swot analysis
 Chapter – 3 Marketing Information System and Demand
Measurement
• We are in the information age and IT generation . Information is power. Marketing
decisions are based on various kinds of market related data and informations.
Marketing organization need information for making better decisions. So,
marketing information system is very important to provide a constant flow of
information about such things as products, prices , places and promotions.
Marketing information system consists of people and procedures for assessing
information needs, developing the needed information to generate actions.
• A marketing information system (MKIS) is a management information system (MIS)
designed to support marketing decision making. Jobber (2007) defines it as a "system in
which marketing data is formally gathered, stored, analyzed and distributed
to managers in accordance with their informational needs on a regular basis." In addition,
the online business dictionary defines Marketing Information System (MKIS) as "a system
that analyzes and assesses marketing information, gathered continuously from sources
inside and outside an organization or a store." Furthermore, "an overall Marketing
Information System can be defined as a set structure of procedures and methods for the
regular, planned collection, analysis and presentation of information for use in making
marketing decisions”.
 Hence: Marketing information system is an integrated combination of information ,
information processing and analysis equipment and tools and informational
specialists who analyze and interpret the collected data , information and provide it to
decision makers .
According to Philip Kotler” Marketing information system consists of people,
equipment and procedures to gather, sort, analyze, evaluate and distribute need,
timely, and accurate information to marketing decision makers .”

• Marketing information can be collected from different sources such as:

• Internal Record System
• Marketing Intelligent System
• Marketing Research System.”
• Marketing Decision Support System
Components of Marketing Information System:
1) Internal Record system: It provides the informative data that is related to the
organization internally. It generates information within the firm. Marketers get
many information from internal record system such as sales, costs, inventories,
cash flows, account receivable and account payable etc. It consists:

• i) Decision by Top level Management:

• Ii) Financial Report: Income, Expenses, Equity capital, loan capital, Budget
allocation, Financial strategy etc.
• Iii) Customer Related Records: customer’s profits, order placement cycle, bills
invoices, inventory record and shipment records etc.
• Iv) Sales Related Records: Total sales, sales return, discount, commission,
market segment, sales trend, sales return trend and so on.
• V) Other Records: Financial statement, audit report, annual report and
inventory level records.
2)Marketing Intelligence System: It is organized procedures to collect regularly information
for the making better decision. It consists of procedures and sources to obtain and use strategic
information about relevant happenings and developments in the marketing conditions and macro
environment. In this system informations are collected from formal and informal sources.

• Formal sources: Sales persons, intermediaries, specialist, private agencies and marketing information center (
informations are collected from its staffs by sending to competitors) , stakeholders, international sources etc.
• Informal Sources:
• Newspapers, Magazines, trade journals etc.
• Interaction with production managers, financial manager, HR manager, Rand D manager, sales managers,
employee etc.
• Interaction with Customers, Intermediaries and Others.
• Government source: Budget speech, census, agricultural report, industrial survey, economic survey etc.
• International source: ADB, UNDP, ILO, EU, WTO, World Bank etc.
• Universities and Research Institute.
• Other sources: Books, Magazines, Media, Websites, Distributors, Customers, suppliers, competitors etc.
•
 3) Marketing Decision Support System: It is a procedure that allows a manager to
interact with data and methods of analysis to gather , analyze and interpret
information to take better decisions. It includes hardware and software programs.
it does not collect data but stores , integrates, analyze and interpret s the already
collected information .

A decision support system (DSS) is a

computerized program used
to support determinations, judgments,
and courses of action in an organization
or a business. A DSS sifts through and
analyzes massive amounts of data,
compiling comprehensive information
that can be used to solve problems and
in decision-making
1. DSS Database: It contains data from various sources, including internal data from the organization,
the data generated by different applications, and the external data mined form the Internet, etc. The
decision support systems database can be a small database or a standalone system or a huge data
warehouse supporting the information needs of an organization. To avoid the interference of decision
support system with the working of operational systems, the DSS database usually contains a copy of
the production database.

• 2. DSS Software System: It consists of various mathematical and analytical models that are used
to analyze the complex data, thereby producing the required information. A model predicts the
output in the basis of different inputs or different conditions, or finds out the combination of
conditions and input that is required to produce the desired output.
• A decision support system may compromise different models where each model performs a
specific function. The selection of models that must be included in a decision support system
family depends on user requirements and the purposes of DSS. Note that the DSS software
contains the predefined models (or routines) using which new models can be built to support
specific type of decisions.
3)Statistical Models: They contain a wide range of statistical functions, such as mean, median,
mode, deviations etc. These models are used to establish, relationships between the
occurrences of an event and various factors related to that event. It can, for example, relate
sale of product to differences in area, income, season, or other factors. In addition to
statistical functions, they contain software that can analyze series of data to project future
outcomes .
• 4) Sensitivity Analysis Models: These are used to provide answers to what-if situations occurring
frequently in an organization. During the analysis, the value of one variable is changed repeatedly
and resulting changes on other variables are observed. The sale of product, for example, is affected
by different factors such as price, expenses on advertisements, number of sales staff, productions
etc
• 5) Forecasting Models: They use various forecasting tools and techniques, including the regression
models, time series analysis, and market research methods etc., to make statements about the
future or to predict something in advance.
• 6) Methods Bank: It consists Multiple regression, Discriminants analysis, Factor analysis, Multiple
regression etc.
4) Marketing Research system : A structure of information and data collection
which provides a coherent representation of a need and potential solutions.
The system may be used as an ongoing monitor of the marketplace or on a case-by-case
evaluation of a potential product concept.

• According to American Marketing

Association (AMA), “Marketing Research
relates to the systematic collection,
recording and carefully analyzing the data
about problems related to the marketing of
goods and services.” According to Philip
Kotler, “Marketing research is a systematic
problem analysis, model building and fact
finding for the purpose of improved
decision-making and control in the
marketing of goods and services.”
Features of Marketing Research
• Wide and comprehensive scope - Marketing research has a very wide scope. It includes product research,
pricing research, market research, packaging research, sales research, etc. It is used to solve marketing
problems and to take marketing decisions. It is used to make marketing policies. It is also used to introduce
new products in the market and to identify new markets. Marketing research is used to identify channels of
distribution and select them, in advertising strategy as in for sales promotion measures.
• Systematic and scientific - Marketing research follows a step-by-step process. It is conducted in an
ordered manner. Therefore, it is systematic. Marketing research uses scientific methods. Hence, it is also
scientific.
• Science and art: A Science collects knowledge (data) while an Art uses this knowledge for solving
problems. Marketing research first collects data. It then uses this data for solving marketing problems.
Therefore, it is both, a Science and an Art.

.Tool for decision-making - The marketing manager has to take many decisions. For this, he requires a lot of
data. Marketing research provides correct and up-to-date data to the marketing manager. This helps him to

take quick and correct decisions. Therefore, marketing research is an important tool for decision-making .
:
Importance of Marketing Research i) Planned production
ii) Knowledge of Market Change
iii) First hand Marketing Information
iv) Increasing Competition
Areas of Marketing Research:
Marketing research is the systematic gathering, recording and analyzing of data about problems relating
to the marketing of products or services . It is very systematic, scientific, objective and organized. The
major areas of marketing research are:
1. Research on Products:
Products involve goods and services. This branch of marketing research covers all the issues related to
firm’s products.
It studies and solves the product-related problems, such as:
i. Study of products’ qualities and performance
ii. Study of physical and psychological characteristics of product
iii. Determining uses of the existing products
iv. Comparative study of competitive products
v. Detecting consumers’ problems related to the products
vi. Determining need for developing new products
vii. Assessing success of a new product in market, including market testing
viii. Product life cycle and consumer adoption study
ix. Study of branding, packaging, labeling, after-sales services, and remarking
• 2. Research on Market:
• This area of marketing research deals with market/consumers. It studies
characteristics and compositions of the target markets. It covers both current as
well as potential markets.
• . Defining and selecting target market
• ii. Studying needs and wants of target market
• iii. Study of size and location of current market
• iv. Assessing the current market trends and projecting the future trend
• v. Analysis of territorial sales opportunities and potential
• vi. Setting sales territories and sales quotas
• vii. Market share analysis
• viii. Studies on relative profitability of different markets
• ix. Estimating demand of a new product
• 3. Research on Sales Methods and Policies:
• This area of marketing research, particularly, concerns with study and analysis of
the sales- related activities.
• Various aspects covered under this are listed as below:
• i. Study and analysis of sales records
• ii. Analysis of sales territories in terms of products, size of orders, times, terms and
conditions and methods
• iii. Study on activities and effectiveness of salesmen
• iv. Evaluating existing selling methods
• v. Sales force management including size, compensation, training, control, etc.
• vi. Study on effect of various promotional tools such as advertising, personal selling,
sales promotion, and publicity tools on sales
• vii. Study on organization structure of sales department.
 •4. Research on Advertising:
Advertising is one of the powerful methods of market promotion. Major part of promotional budget is devoted to
advertising activities. Therefore, it is imperative to conduct research on various aspects related to advertising.
Under this area, at least following aspects are covered:
i. Comparative study of various elements of promotion
ii. Study on advertising objectives, media and media selection, advertising message, theme, copy, and advertising agency

iii. Social aspects of advertising – negative and positive effects of advertising on society at large
iv. Advertising role in different stages of product life cycle
v. Government restrictions on advertising
vi. Study on costs and contribution of advertising or evaluating advertising effectiveness
vii. Study of competitors’ advertising practices and strategy

5. Research on Pricing:
Price is an important element of marketing mix. In developing and underdeveloped countries, price plays a vital role.
Suitable pricing policies and methods can contribute positively in attainment of marketing goals. It is clear that price
has remained a major determinant of buying decision.
i. Study on pricing objectives
ii. Study on effectiveness of pricing policies and strategies
iii. Study of various methods for setting price
iv. Quality v/s value analysis
v. New product and pricing policies
6. Research on Distribution:
In today’s marketing, distribution has unique role to determine success of product. A
marketer can contribute to total consumer satisfaction by designing appropriate
distribution network. Physical distribution and distribution channel are two important
components of such research.
This area includes:
1. Assessing role of distribution decisions in achieving marketing goals
2. Comparative study of between direct and indirect distribution
3. Physical distribution and ancillary services
4. Study on various types of channels of distribution
5. Study on relevant factors affecting channel decision/selection
6. Comparing company’s distribution strategies with competitors
7. Relevance of online marketing
8. Legal issues related to distributions
• 7. Research on Business Environment and Corporate Responsibility:
• This area is not concerned with solving any marketing problem directly. In order to collect
and analyze data related to broad business environment, such research is conducted. The
study on the area helps manager formulate strategies for the current and the future
market as well. It also helps assess strengths and weaknesses of marketing department
in relation to business environment. In today’s dynamic business environment, the study
on various economic, social, and cultural variables is extremely important. Similarly, it is
necessary to analyze corporate responsibility.
• Main aspects covered under the head include:
• i. Business analysis including demand, national income, per capita income, trade and
industry, economic growth rate, fiscal monetary policies, and export-import policy.
• ii. Short-term and long-term business forecasting.
• iii. Technological aspects.
• iv. Availability and quality of productive resources.
• v. Impacts of legal provisions and Acts.
• vi. Study on consumerism and the consumer rights.
• vii. Social and cultural values affecting business policy.
• viii. Pollution and ecological imbalance, and social responsibility of business.
Process of Marketing Research:

1)Problem Identification: File study,

Experience survey, Case study,
Discussion, Brainstorming etc.
2)Research Design: sources of data,
Data collection methods, sampling
method etc
3)Data collection: Field work,
interviews, surveys, questionnaires
methods etc.
4)Data presentation and Analysis:
5)Report preparation and Presentation
 Market Demand and Its Measurement:
• Demand is a want for specific products backed by an ability to pay. Demand for a product
may be defined as the quantity bought by buyers over a certain time span, in a given
environment, and under a given marketing programme . Every organization should have to
measure the market demand of its goods and services with the help of information.
Marketing organization can use different terms to measure market demand.
• 1) Potential market
• 2) Available market
• 3) Target market
• 4) Penetrate market
• Hence: Market demand is the sum of the individual demand for a product from buyers in
the market. If more buyers enter the market and they have the ability to pay for items on
sale, then market demand at each price level will riser.
• Demand refers to consumers' desire to purchase goods and services at given prices.
• Demand can mean either market demand for a specific good or aggregate demand for the
total of all goods in an economy.
• Demand, along with supply, determines the actual prices of goods and the volume of goods
that changes hands in a market.
Methods of Estimating Market Demand : In estimating current market demand, marketing
executives want to estimate total market potential, area market potential, and total industry sales and market shares.

• Total Market Potential: Total market potential is the maximum sales available to all
firms in an industry during a given period under a given level of industry marketing
effort and environmental conditions . In this method, the firm must determine the
number of potential buyers, average quantity per buyer and price per unit of product.
• TMP = PB x AQPB x PPU
• Where, TMP= Total Market Potential
• PB = Potential Buyers
• AQPB= Average Quantity Per Buyer
• PPU = Price Per Unit
• Area Market Potential: Companies must allocate their marketing budget optimally among their best
territories, they need to estimate the market potential of different cities, states, and nations. Two major methods are
the market-buildup method, used primarily by business marketers, and the multiple-factor index method, used
primarily by consumer marketers.
i) Market Build –up method:
• In this method, a defined market area is divided into several small geographical areas . Through research , the
firm identifies all potential buyers in the divided geographical areas and collects information on the size of their
purchases. Then all the figures from the different areas are added together to arrive at a precise estimate of area
market potential.
• TD = PB x PPPB
• Where, TD = Total Demand
• PB = Potential Buyers
• PPPB = Potential purchase Per Buyers.
• Ii) Market Factor Analysis or Index Method:
• This method uses several ratios to arrive at area market potential. It is used to estimate current market demand
in that market area where number of customers are large. Example,
• Bagmati zone has
• 15% of Nepal’s population
• 25% of Nepal’s disposable income
• 20% of Nepal’s retail sales
• The weight assigned
• 0.3 for population, 0.3 for disposable income and 0.4 for retail sales.
• Hence Multiple factor index for Bagmati zone will be ( 0.3 x 15% + 0.3 x 25% + 0.4 x 20%) = 20% . It means 20%
of Nepal’s retail sales can be expected in Bagmati zone.
 iii) Company market share estimate:

• A company need to know the actual industry sales taking place in a market.
This requires identifying competitors and estimating their sales . The company
then calculate its own market share in the total industry sales.
Market shares of the Firm = Total sales of the Firm X 100
Total sales of the Industry
• Example, Total sales of WAI WAI Noodles = 200 million
• Total sales of Noodles in Nepal = 800 million
•
• Now, Market share of the Wai Wai noodles = (200/800 ) x 100%
 Methods of estimating Future Market Demand:
• 1) Opinion Survey Method
• a) Survey of buyer’s Intentions method
• b) Sales force opinions method
• c) Experts opinions
• 2) Executive Opinion
• 3) Past Sales Trend Analysis Method
• 4) Market Test Method
• Practices of Marketing Information System in Nepal:
• Components of MKIs in Nepal:
• a) Internal Record
• b) Marketing Intelligence System
• c) Marketing Research System
• d) Marketing Decision Support System
• Data For MKIs in Nepal: i) Primary data ii) Secondary data
• Use of Internet for MKIs in Nepal:
Marketing Information System in Nepal
Information is power. Marketing managers need different information to
respond the environmental changes. Information is a blood for any
organization. So business organization today develops a mechanism for
generating all the necessary information and data to the decision maker on
all marketing related issues, which is called marketing information system.
It gives regular flow of information regarding market happenings. In short
marketing information system is known as MkIS.

This is the age of information revolution. It is a regular process. In conclusion,

marketing information system is an ongoing organizational process which
includes the activities such as collection of information, sorting, analysis,
evaluation, selection distribution acquiring and dissemination of data to the
concerned information users such as marketing managers, marketing
decision makers. It is made up of four major components such as marketing
research system, marketing intelligence system, internal record system and
decision support system.
• MkIs in Nepal
• 21st century, this era belongs to information technology. Nepal has
also moved forward in the development of information technology. The
development of mobile, telephone, fax, internet etc. has made
marketing research easy and simple. After adaptation of privatization
policy in Nepal, seller's market has changed into buyer's market.
Economic globalization is increasing. Internal competition is changing
into global competition, marketing environment getting more
complicated. In this context, marketing managers in Nepal also are
gradually changing their traditional decision making style into modern
and started using marketing information system in taking marketing
decision. In past, managers had taken a decision at principle,
experience and hunches. But now tradition has changed. A mechanism,
MkIS has been started to be established in every organization.
Their practices have influenced Nepalese marketers to practice same. The situation
is expressed in the following points.
- Internal record system mostly are manual. It leads them to errors. Customer
related records and sales records are not accurate and reliable.
- Intelligence system is less used. It is considered a waste cost in such activities
everyday pertinent happenings are not used.
- Decision support system are lacking. Most organization are in lack of technology.
Moreover they have no manpower to handle them. Its use however in modern
period is increasing.
- Research is rarely done. Most decisions are intuitions and hunches based.
THE following stages are followed for marketing
research in Nepal:
• Defining objectives-case study, experience survey ,brainstorming and literature review

• Determining research method –qualitative research ,quantitative research and mix

research.
• Preparing research instrument-prepare simple and well structured questionnaire for
survey, qualitative question for research participants and check list for focused group
discussion.
• Data collection-primary and secondary
• Data analysis-statistical tools such as: average ,percentage, trend analysis, correlation,
regression, standard deviation tables bar diagram pie charts , graphs etc
• Interpretation and reporting the findings –meaningful
Perspectives and challenges of MkIS in Nepal
Marketing research is slowly being developed, as marketing managers are
becoming more aware and conscious about it.
Considering the above facts described above, the use of proper MkIS is still
lacking in our country. The limited organizations and entrepreneurs apply
the scientific and reliable MkIS in order to identify the opportunities and
enhancement of new segments and launching a new product in the market.
The market is combination of various components like buying, selling,
pricing, promotion, distribution etc. So the marketing information system
can simplify these activities and can make objective oriented. Most of the
organization are not been successful due to lack of implementation of
timely and proper marketing information. The information applied are not
up to date too.