Scenario building in marketing environment

Another approach to environmental scanning is called Scenario Building. This is a process involving the decision maker who has to analyze his decisions with respect to the future. The following steps are involved in this technique.

Stage 1: Analysis of the Decision (s)

This stage involves the decision maker analyzing his decision relating to the future For example, the marketer of a domestic appliance may take a decision to launch, say, a microwave oven in 1996.This stage then demands that the marketer analyses his decision in terms of financial investment, human resource required, dealer network required, any additions to plant and machinery or in case it has to be bought from outside, evaluating the vendors etc. In other words, this is a stage that requires a detailed analysis of all resources required in implementing a particular decision.

Stage 2: Identification of Key Decision Factors

This is the stage of identifying all those key variables, other than societal, that have contributed to the decision .Continuing with the above example of the microwave oven, the decision-maker needs to list all relevant factors like the market share of the firm in the appliances industry, the phase in which the appliances industry is in and more specifically the microwave oven and other modern generation products like washing machines, dish washers, and vacuum cleaners, condition of economy, and competition, etc.

Stage 3: Keying in Societal Factors

A very important variable in marketing decisions is the societal factor, i.e. the demographic changes , value system and analysis of the social subsystems like the family and influence of reference groups on consumer decision-making .Back to the example of microwave oven , the marketer now needs to examine the factors like age distribution of Indian population, ,its geographic concentration in metros and mini metros, literacy rates and more specifically, growth rate of educated urban middle class, population of working couples and growth rates therein ,nuclear family and its influence on purchases of similar time-saving products, changing food habits and the influence of neighbors, friends and peers on purchase of this product item, etc.

Stage 4: Analysis of Each of the Key Variables Separately

In this stage all the above variables are independently analyzed and further details are collected on each of them. This will involve collection of relevant data from several secondary sources. In some cases, the marketer may have to collect information from the primary source as well.

Stage 5: Selection of Scenario Logics

The data so collected is now extrapolated and further evidence if any, is assembled to support the scenario. In case of the microwave oven it is the urban middle class consumer scenario that is of relevance here for decision-making