role of marketing research in marketing information system

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10.1 Marketing Information Systems

Learning objectives.

• Describe the components of a marketing information system and each component’s purpose.
• Explain the situations in which marketing research should be used versus market intelligence.
• Describe the limitations of market intelligence and its ethical boundaries.
• Explain when marketing research should and should not be used.

A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that’s being gathered. When a sales representative records the shipping preferences of a customer in a firm’s customer relationship management (CRM) system, this is also marketing information that’s being collected. When a firm gets a customer complaint and records it, this too is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

Interview with Joy Mead

http://app.wistia.com/embed/medias/c89771530a

Recall from Chapter 3 “Consumer Behavior: How People Make Buying Decisions” that Joy Mead is an associate director of marketing with Procter & Gamble. Listen to this clip to hear Mead talk about the research techniques and methods Procter & Gamble uses to develop consumer insight. You will learn that the company isn’t just interested in what consumers want now but also years in the future.

The trick is integrating all the information you collect so it can be used by as many people as possible in your organization to make good decisions. Unfortunately, in many organizations, information isn’t shared very well among departments. Even within departments, it can be a problem. For example, one group in a marketing department might research a problem related to a brand, uncover certain findings that would be useful to other brand managers, but never communicate them.

A marketing information system (MIS) is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to very sophisticated computer systems. Ideally, however, a marketing information system should include the following components:

• A system for recording internally generated data and reports
• A system for collecting market intelligence on an ongoing basis
• Marketing analytics software to help managers with their decision making
• A system for recording marketing research information

Internally Generated Data and Reports

As we explained, an organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. Firms are also constantly gathering information related to their Web sites, such as clickstream data. Clickstream data is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don’t buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions by virtue of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent (Baker, 2009). (That’s an interesting way to conduct marketing research, don’t you think?)

Being able to access clickstream data and other internally generated information quickly can give a company’s decision makers a competitive edge. Remember our discussion in Chapter 9 “Using Supply Chains to Create Value for Customers” about how Walmart got a leg up on Target after 9/11? Walmart’s inventory information was updated by the minute (the retailer’s huge computing center rivals the Pentagon’s, incidentally); Target’s was only updated daily. When Walmart’s managers noticed American flags began selling rapidly immediately following the terrorist attacks on 9/11, the company quickly ordered as many flags as possible from various vendors—leaving none for Target.

Click on the following link to watch a fascinating documentary about how Walmart, the world’s most powerful retailer, operates: http://www.hulu.com/watch/103756/cnbc-originals-the-new-age -of-walmart .

Many companies make a certain amount of internal data available to their employees, managers, vendors, and trusted partners via intranets. An intranet looks like the Web and operates like it, but only an organization’s employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on her firm’s intranet for the information.

However, big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard. The information could be right under your nose and you might not know it. Meet people like Gary Pool: Pool works for BNSF Railway and is one of BNSF’s “go-to” employees when it comes to gathering marketing data. Pool knows how to access different databases and write computer programs to extract the right information from the right places at BNSF, a process known as data mining . Combining data into one location is called data warehousing , and makes Pool’s analysis easier. He then captures the information and displays it in dashboards , screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail.

Figure 10.2

Gary Pool is an expert at data mining—hunting up information for decision makers at BNSF Railway. And no, he doesn’t wear a headlamp. Nor does he wear a pocket protector! Pool’s title: Manager, Marketing Systems Support & Marketing Decision Support & Planning.

Michael Kappel – Metra BNSF Railway 149 – CC BY-NC 2.0.

Analytics Software

Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather all kinds of different information from a company’s databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” Oracle Corporation’s Crystal Ball is one brand of analytical software.

The camping, hunting, fishing, and hiking retailer Cabela’s has managed to refine its marketing efforts considerably using analytics software developed by the software maker SAS. “Our statisticians in the past spent 75 percent of their time just trying to manage data. Now they have more time for analyzing the data with SAS, and we have become more flexible in the marketplace,” says Corey Bergstrom, director of marketing research and analysis for Cabela’s. “That is just priceless” (Zarello, 2009).

Figure 10.3

Cabela’s’ analytics software has helped the outdoor sporting retailer reach the right customers with the right catalogs.

Echo9er – Cabela’s – CC BY-NC-SA 2.0.

The company uses the software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with Web browsing data to gain a better understanding of the individual customers marketing channel preferences as well as other marketing decisions. For example, does the customer prefer Cabela’s’ one-hundred-page catalogs or the seventeen-hundred-page catalogs? The software has helped Cabela’s employees understand these relationships and make high-impact data-driven marketing decisions (Zarello, 2009).

Market Intelligence

A good internal reporting system can tell a manager what happened inside his firm. But what about what’s going on outside the firm? What is the business environment like? Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? How will rising fuel prices and alternate energy sources affect your firm and your products? Do changes such as these present business obstacles or opportunities? Moreover, what are your competitors up to?

Not gathering market intelligence leaves a company vulnerable. Remember Encyclopedia Britannica, the market leader in print encyclopedia business for literally centuries? Encyclopedia Britannica didn’t see the digital age coming and nearly went out of business as a result. (Suffice it to say, you can now access Encyclopedia Britannica online.) By contrast, when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and early on locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. Meanwhile, Southwest Airlines managed to eke out a profit. Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research.

Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. In big companies, personnel in a firm’s marketing department are primarily responsible for their firm’s market intelligence and making sure it gets conveyed to decision makers. Some companies subscribe to news service companies that regularly provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. Other companies subscribe to mystery shopping services, companies that shop a client and/or competitors and report on service practices and service performance. Let’s now examine some of the sources of information you can look at to gather market intelligence.

Search Engines and Corporate Web Sites

An obvious way to gain market intelligence is by examining your competitors’ Web sites as well as doing basic searches with search engines like Google. If you want to find out what the press is writing about your company, your competitors, or any other topic you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts at http://www.google.com/alerts . Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of Web sites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar, and voilà! All the good (and bad) things people have remarked about the company or topic turn up. What a great way to seek out the shortcomings of your competitors. It’s also a good way to spot talent. For example, designers are using search engines like WhosTalkin.com to search the blogs of children and teens who are “fashion forward” and then involve them in designing new products.

WhosTalkin.com and Radian6 (a similar company) also provide companies with sentiment analysis. Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. Some companies use sentiment analysis to determine how the market is reacting to a new product. The Centers for Disease Control (CDC) uses sentiment analysis to track the progress of flu; as people post or tweet how sick they are, the CDC can determine where the flu is increasing or decreasing.

Figure 10.4

Type a company’s name (or anything else you want) into the search bar and see what comes up. (Note: It takes a little while for all of the results to show up.)

Source: http://www.whostalkin.com .

Publications

The Economist , the Wall Street Journal , Forbes , Fortune , BusinessWeek , the McKinsey Report , Sales and Marketing Management , and the Financial Times are good publications to read to learn about general business trends. All of them discuss current trends, regulations, and consumer issues that are relevant for organizations doing business in the domestic and global marketplace. All of the publications are online as well, although you might have to pay a subscription fee to look at some of the content. If your firm is operating in a global market, you might be interested to know that some of these publications have Asian, European, and Middle Eastern editions.

Other publications provide information about marketplace trends and activities in specific industries. Consumer Goods and Technology provides information consumer packaged-goods firms want to know. Likewise, Progressive Grocer provides information on issues important to grocery stores. Information Week provides information relevant to people and businesses working in the area of technology. World Trade provides information about issues relevant to organizations shipping and receiving goods from other countries. Innovation: America’s Journal of Technology Commercialization provides information about innovative products that are about to hit the marketplace.

Trade Shows and Associations

Trade shows are another way companies learn about what their competitors are doing. (If you are a marketing professional working a trade show for your company, you will want to visit all of your competitors’ booths and see what they have to offer relative to what you have to offer.) And, of course, every field has a trade association that collects and disseminates information about trends, breakthroughs, new technology, new processes, and challenges in that particular industry. The American Marketing Association, Food Marketing Institute, Outdoor Industry Association, Semiconductor Industry Association, Trade Promotion Management Association, and Travel Industry Association provide their member companies with a wealth of information and often deliver them daily updates on industry happenings via e-mail.

Salespeople

A company’s salespeople provide a vital source of market intelligence. Suppose one of your products is selling poorly. Will you initially look to newspapers and magazines to figure out why? Will you consult a trade association? Probably not. You will first want to talk to your firm’s salespeople to get their “take” on the problem.

Salespeople are the eyes and ears of their organizations. Perhaps more than anyone else, they know how products are faring in the marketplace, what the competition is doing, and what customers are looking for.

A system for recording this information is crucial, which explains why so many companies have invested in customer relationship management (CRM) systems. Some companies circulate lists so their employees have a better idea of the market intelligence they might be looking for. Textbook publishers are an example. They let their sales representatives know the types of books they want to publish and encourage their representatives to look for good potential textbook authors among the professors they sell to.

Suppliers and Industry Experts

Your suppliers can provide you with a wealth of information. Good suppliers know which companies are moving a lot of inventory. And oftentimes they have an idea why. In many instances, they will tell you, if the information you’re looking for is general enough so they don’t have to divulge any information that’s confidential or that would be unethical to reveal—an issue we’ll talk more about later in the book. Befriending an expert in your industry, along with business journalists and writers, can be helpful, too. Often these people are “in the know” because they get invited to review products (Gardner, 2009).

Lastly, when it comes to market intelligence don’t neglect observing how customers are behaving. They can provide many clues, some of which you will be challenged to respond to. For example, during the latest economic downturn, many wholesalers and retailers noticed consumers began buying smaller amounts of goods—just what they needed to get by during the week. Seeing this trend, and realizing that they couldn’t pass along higher costs to customers (because of, say, higher fuel prices), a number of consumer-goods manufacturers “shrank” their products slightly rather than raise prices. You have perhaps noticed that some of the products you buy got smaller—but not cheaper.

Can Market Intelligence Be Taken Too Far?

Can market intelligence be taken too far? The answer is yes. In 2001, Procter & Gamble admitted it had engaged in “dumpster diving” by sifting through a competitors’ garbage to find out about its hair care products. Although the practice isn’t necessarily illegal, it cast P&G in a negative light. Likewise, British Airways received a lot of negative press in the 1990s after it came to light that the company had hacked into Virgin Atlantic Airways’ computer system 1 .

Gathering corporate information illegally or unethically is referred to as industrial espionage . Industrial espionage is not uncommon. Sometimes companies hire professional spies to gather information about their competitors and their trade secrets or even bug their phones. Former and current employees can also reveal a company’s trade secret either deliberately or unwittingly. Microsoft recently sued a former employee it believed had divulged trade secrets to its competitors 2 . It’s been reported that for years professional spies bugged Air France’s first-class seats to listen in on executives’ conversations (Anderson, 1995).

Spying at Work—Espionage: Who, How, Why, and How to Stop It

(click to see video)

To learn more about the hazards of industrial espionage and how it’s done, check out this YouTube video.

Figure 10.5

Don’t get caught doing this—unless you work for the natural-cosmetics maker Burt’s Bees. To get across to employees the amount of material being wasted, Burt’s Bees had its employees put on hazmat suits and sort through garbage for a couple of weeks. (No, employees weren’t engaging in industrial espionage.) The recycling opportunities they spotted as part of the exercise ended up saving the natural-cosmetics maker $25,000 annually (Nemes, 2009).

Halturg Skanser – dumpster diving leap – CC BY-NC 2.0.

To develop standards of conduct and create respect for marketing professionals who gather market intelligence, the Society of Competitive Intelligence Professionals has developed a code of ethics. It is as follows:

• To continually strive to increase the recognition and respect of the profession.
• To comply with all applicable laws, domestic and international.
• To accurately disclose all relevant information, including one’s identity and organization, prior to all interviews.
• To avoid conflicts of interest in fulfilling one’s duties.
• To provide honest and realistic recommendations and conclusions in the execution of one’s duties.
• To promote this code of ethics within one’s company, with third-party contractors and within the entire profession.
• To faithfully adhere to and abide by one’s company policies, objectives and guidelines 3 .

Marketing Research

Marketing research is what a company has to resort to if it can’t answer a question by using any of the types of information we have discussed so far—market intelligence, internal company data, or analytics software applied to data. As we have explained, marketing research is generally used to answer specific questions. The name you should give your new product is an example. Unless your company has previously done some specific research on product names—what consumers think of them, good or bad—you’re probably not going to find the answer to that question in your internal company data. Also, unlike internal data, which is generated on a regular basis, marketing research is not ongoing. Marketing research is done on an as-needed or project basis. If an organization decides that it needs to conduct marketing research, it can either conduct marketing research itself or hire a marketing research firm to do it.

So when exactly is marketing research needed? Keep in mind marketing research can be expensive. You therefore have to weigh the costs of the research against the benefits. What questions will the research answer, and will knowing the answer result in the firm earning or saving more money than the research costs?

Marketing research can also take time. If a quick decision is needed for a pressing problem, it might not be possible to do the research. Lastly, sometimes the answer is obvious, so there is no point in conducting the research. If one of your competitors comes up with a new offering and consumers are clamoring to get it, you certainly don’t need to undertake a research study to see if such a product would survive in the marketplace.

Alex J. Caffarini, the president and founder of the marketing research firm Analysights, believes there are a number of other reasons companies mistakenly do marketing research. Caffarini’s explanations (shown in parentheses) about why a company’s executives sometimes make bad decisions are somewhat humorous. Read through them:

• “We’ve always done this research .” (The research has taken on a life of its own; this particular project has continued for years and nobody questioned whether it was still relevant.)
• “Everyone’s doing this research .” (Their competitors are doing it, and they’re afraid they’ll lose competitive advantage if they don’t; yet no one asks what value the research is creating.)
• “The findings are nice to know .” (Great—spend a lot of money to create a wealth of useless information. If the information is nice to know, but you can’t do anything with it, you’re wasting money.)
• “If our strategy fails, having done the research will show that we made our best educated guess .” (They’re covering their butts. If things go wrong, they can blame the findings, or the researcher.)
• “We need to study the problem thoroughly before we decide on a course of action .” (They’re afraid of making a tough decision. Conducting marketing research is a good way to delay the inevitable. In the meantime, the problem gets bigger, or the window of opportunity closes.)
• “The research will show that our latest ad campaign was effective .” (They’re using marketing research to justify past decisions. Rarely should marketing research be done after the fact) (Caffarini).

Is Marketing Research Always Correct?

To be sure, marketing research can help companies avoid making mistakes. Take Tim Hortons, a popular coffee chain in Canada, which has been expanding in the United States and internationally. Hortons recently opened some self-serve kiosks in Ireland, but the service was a flop. Why? Because cars in Ireland don’t have cup holders. Would marketing research have helped? Probably. So would a little bit of market intelligence. It would have been easy for an observer to see that trying to drive a car and hold a cup of hot coffee at the same time is difficult.

That said, we don’t want to leave you with the idea that marketing research is infallible. As we indicated at the beginning of the chapter, the process isn’t foolproof. In fact, marketing research studies have rejected a lot of good ideas. The idea for telephone answering machines was initially rejected following marketing research. So was the hit sitcom Seinfeld , a show that in 2002 TV Guide named the number-one television program of all time. Even the best companies, like Coca-Cola, have made mistakes in marketing research that have led to huge flops. In the next section of this chapter, we’ll discuss the steps related to conducting marketing research. As you will learn, many things can go wrong along the way that can affect the results of research and the conclusions drawn from it.

Key Takeaway

Many marketing problems and opportunities can be solved by gathering information from a company’s daily operations and analyzing it. Market intelligence involves gathering information on a regular, ongoing basis to stay in touch with what’s happening in the marketplace. Marketing research is what a company has to resort to if it can’t answer a question by using market intelligence, internal company data, or analytical software. Marketing research is not infallible, however.

Review Questions

• Why do companies gather market intelligence and conduct marketing research?
• What activities are part of market intelligence gathering?
• How do marketing professionals know if they have crossed a line in terms of gathering marketing intelligence?
• How does the time frame for conducting marketing intelligence differ from the time frame in which marketing research data is gathered?

1 “P&G Admits to Dumpster Diving,” PRWatch.org , August 31, 2001, http://www.prwatch.org/node/663 (accessed December 14, 2009).

2 “Microsoft Suit Alleges Ex-Worker Stole Trade Secrets,” CNET , January 30, 2009, http://news.cnet.com/8301-10805_3-10153616-75.html (accessed December 14, 2009).

3 “SCIP Code of Ethics for CI Professionals,” Society of Competitive Intelligence Professionals, http://www.scip.org/About/content.cfm?ItemNumber=578&navItemNumber=504 (accessed December 14, 2009).

Anderson, J., “Bugging Air France First Class,” Ellensburg Daily News , March 25, 1995, 3, http://news.google.com/newspapers?nid=860&dat =19950320&id=ddYPAAAAIBAJ&sjid=F48DAAAAIBAJ&pg=4554,2982160 (accessed December 12, 2009).

Baker, S., “The Web Knows What You Want,” BusinessWeek , July 24, 2009, http://www.businessweek.com/magazine/content/09_30/b4140048486880.htm (accessed December 14, 2009).

Caffarini, A. J., “Ten Costly Marketing Mistakes and How to Avoid Them,” Analysights, LLC.

Gardner, J., “Competitive Intelligence on a Shoestring,” Inc ., September 24, 2001, http://www.inc.com/articles/2001/09/23436.html (accessed December 14, 2009).

Nemes, J., “Dumpster Diving: From Garbage to Gold,” Greenbiz.com , January 16, 2009, http://www.businessgreen.com/bg/analysis/1805796/dumpster-diving-from-garbage-gold (accessed December 14, 2009).

Zarello, C., “Hunting for Gold in the Great Outdoors,” Retail Information Systems News , May 5, 2009, http://www.risnews.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid =2E3DABA5396D4649BABC55BEADF2F8FD&tier=4&id =7BC8781137EC46D1A759B336BF50D2B6 (accessed December 14, 2009).

Principles of Marketing Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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A Deep Dive into the Marketing Information System (MIS)

A Marketing Information System (MIS) is a management information system designed to support marketing decision-making. It brings together many different kinds of data, people, equipment, and procedures to help an organization make better decisions.

In the ever-evolving world of business , staying ahead of the curve is paramount for survival and growth. The key to this competitive edge lies in a well-structured Marketing Information System (MIS). This blog post will unravel the intricacies of MIS, its components, and its role in transforming business strategies

The role of a company’s marketing information system (mis) is important because it aids in decision-making, marketing research, validating internal records, and most importantly acts as a marketing decision support system.

Understanding the Marketing Information System (MIS)

This section will provide a comprehensive overview of what a Marketing Information System is. We’ll delve into its definition, purpose, and why it’s a game-changer in the modern business landscape.

Definition of Marketing Information System : A Marketing Information System (MIS) is a strategic tool used by businesses to collect, analyze, and present data related to their market environment. It encompasses a structured set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis.

The initial function of a marketing information system is to asses the business landscape and provide recommendations that help in the recommendation of various business processes specifically related to marketing

Purpose : The primary purpose of an MIS is to support the decision-making process within a business. It provides managers with the necessary information to make informed marketing decisions and create effective marketing strategies. The data collected through an MIS can include information about customer demographics, buying habits, sales trends, competitor analysis, and market research.

The initial function of a marketing information system is that It balances the information that a firm wishes to have with the information a firm needs.

Importance in the Modern Business Landscape

The importance of an MIS lies in its ability to help businesses stay competitive in today’s rapidly changing market environment. It enables businesses to:

Identify Market Opportunities : An MIS can help businesses identify new market opportunities, track market trends, and understand customer needs and preferences. This can lead to the development of new products or services, expansion into new markets, or improvement of existing offerings.

Improve Decision-Making : By providing accurate and timely information, an MIS supports better decision-making at all levels of the organization. This can lead to improved operational efficiency, cost savings, and increased profitability.

Enhance Customer Satisfaction : An MIS can help businesses understand their customers better, leading to improved customer service, personalized marketing efforts, and ultimately, higher customer satisfaction and loyalty.

Game-Changer Aspect : In the era of big data and digital transformation, an MIS is indeed a game-changer. It allows businesses to harness the power of data and use it to drive strategic decision-making. According to a report by McKinsey, companies that leverage customer behavior data to generate behavioral insights outperform their peers by 85 percent in sales growth and more than 25 percent in gross margin.

The Pillars of Marketing Information System (MIS)

Internal Records:

Internal records are the backbone of any Management Information System (MIS). They provide a historical context, allowing decision-makers to analyze past performance and make informed predictions about future trends. This data typically includes sales records, inventory details, financial statements, and other operational data. 

The effectiveness of internal records can be measured using data accuracy, completeness, and timeliness. A formula commonly used to assess data quality is:

 Data Quality Score = (Completeness + Accuracy + Timeliness) / 3

High-quality internal records can significantly improve decision-making efficiency and accuracy, leading to better business outcomes. 

Marketing Intelligence:

Marketing intelligence refers to the external data that a company gathers about the market in which it operates. It includes information about competitors, market trends, customer behavior, and economic indicators.

An example of a formula used in marketing intelligence is the Market Growth Rate:

Market Growth Rate = (Current Market Size – Previous Market Size) / Previous Market Size * 100%

This formula helps businesses understand the growth potential of their market and make strategic decisions accordingly.

Marketing Research:

Marketing research involves systematic gathering, recording, and analysis of data about issues relating to marketing products and services. It involves conducting surveys, interviews, focus groups, and other research methods to gather information about customer needs, preferences, and attitudes.

A commonly used statistic in marketing research is the Confidence Interval, which gives an estimated range of values that is likely to include an unknown population parameter. The width of the confidence interval gives us some idea about how uncertain we are about the unknown parameter.

Confidence Interval = Sample Mean ± (Z-score * Standard Deviation / √Number of Observations)

Marketing Decision Support System (MDSS):

An MDSS is a computerized information system that supports business and organizational decision-making activities. It utilizes data, models, and user-friendly software to support the formulation of marketing strategies.

The effectiveness of an MDSS can be measured using the Decision Quality Metric:

Decision Quality = (Relevance + Reliability + Timeliness + Completeness) / 4

This metric provides a quantitative measure of the quality of the decisions made using the MDSS, with higher scores indicating better decision-making.

Each of these pillars plays a crucial role in the functionality and effectiveness of an MIS. By understanding and optimizing each component, businesses can significantly enhance their decision-making capabilities, drive growth, and gain a competitive edge in the market.

The Role of Marketing Information System (MIS) in Decision Making

This part will focus on the practical implications of an MIS in a business setting. We’ll explore how it aids in strategic decision-making, forecasting, and problem-solving.

Strategic Decision-Making

An MIS provides critical data that can be analyzed and used for strategic decision-making. This data can include everything from sales reports to customer behavior data, which can help businesses understand their market and make informed decisions.

For instance, an MIS can help identify trends in sales data that might indicate a need for a new marketing strategy or product development. It can also help identify areas where costs could be reduced without negatively impacting product quality or customer satisfaction.

The MIS can use a formula like the Decision Tree Analysis, which helps to evaluate the potential outcomes of a decision. The formula is as follows:

Expected Monetary Value (EMV) = ∑ (Payoff x Probability)

Here, the payoff is the potential outcome of the decision, and the probability is the chance of that outcome occurring.

Forecasting

An MIS can also be used for forecasting, which is essential for planning and budgeting. It can analyze historical data to predict future trends, helping businesses prepare for what’s to come.

One common forecasting method used is Time Series Analysis. This method uses historical data to identify patterns and trends that can predict future outcomes. The formula for a simple linear regression time series forecast is:

  Y = a + bt

Where Y is the forecasted value, a is the Y-intercept, b is the slope of the trend line, and t is the period.

Problem-Solving

An MIS can be a valuable tool in problem-solving. It can provide data that helps identify problems, analyze their causes, and evaluate potential solutions.

The MIS can use a variety of problem-solving models, such as the Cause and Effect Diagram, also known as the Fishbone Diagram. This diagram helps to identify, explore, and display the possible causes of a specific problem or quality characteristic.

To sum up, an MIS plays a crucial role in decision-making, forecasting, and problem-solving within a business. It provides valuable data that can be analyzed and used to make strategic decisions, predict future trends, and solve problems. It’s an indispensable tool for any business that wants to stay competitive in today’s data-driven marketplace.

Advantages of Using a Marketing Information System

Improved Decision-Making : The primary advantage of using a MIS is that it can significantly improve the decision-making process. With a robust MIS, marketing managers can access real-time, accurate data that allows them to make informed decisions. For example, a survey by Adobe found that 76% of marketers believe measurement and analytics are crucial to their business growth. Enhanced Marketing Planning : The MIS can help in creating more effective marketing plans. It provides data about customers’ preferences, market trends, and competitors’ strategies, enabling managers to devise more targeted and competitive marketing plans. According to the 2020 CMO Survey, companies that use data-driven marketing have an edge over their competitors, with a 16% to 20% increase in marketing ROI. Target Market Identification : With a MIS, companies can easily identify their target market. It provides demographic, geographic, psychographic, and behavioral data that can help a business reach its ideal customer. According to a report by McKinsey, businesses that leverage customer behavior data to generate behavioral insights achieve an 85% increase in sales growth and a 25% increase in gross margin. Reduced Costs : The MIS can also lead to significant cost savings. By automating data collection and analysis, MIS reduces labor costs. Moreover, its ability to improve the efficiency and effectiveness of marketing campaigns can also decrease marketing expenses . An IBM study found that incorporating AI (part of MIS) into marketing can cut costs by as much as 30%. Competitive Advantage : Lastly, an effective MIS can provide a competitive advantage. It gives marketers insights into the strategies and performances of their competitors, enabling them to adjust their strategies accordingly. According to a Harvard Business Review report, companies using analytics and data (elements of MIS) to inform decision-making are more productive and experience higher returns than their competition.

Implementing MIS: A Step-by-Step Guide

Transitioning from theory to action, this section will provide a roadmap for businesses looking to implement an MIS. We’ll discuss the stages of implementation, potential challenges, and tips for success.

Planning : The first step in implementing an MIS is careful planning. This involves defining the scope of the system, setting goals, and identifying key stakeholders. An effective plan should also include a detailed timeline, budget, and risk management strategy. 

Design : Once the plan is in place, the next step is to design the MIS. This involves deciding on the software, hardware, and network infrastructure that will be used. The design phase also includes creating a detailed blueprint of the system’s architecture and user interface.

Development : The development stage involves building the MIS based on the design blueprint. This includes coding, testing, and debugging the system. It’s crucial to ensure the system is user-friendly and meets the organization’s needs.

Deployment : After the MIS has been developed, it’s time to deploy it. This involves installing the system, training users, and transitioning from the old system to the new one.

Maintenance : The final stage of implementation is maintenance. This involves regularly checking the system for errors, making necessary updates, and providing ongoing user support.

Potential Challenges of Implementing a Marketing Information System 

Implementing an MIS can be a complex process, and there are several potential challenges to be aware of. These include:

Resistance to Change : Employees may be resistant to adopting a new system, especially if they are comfortable with the old one.

Technical Difficulties : There may be technical issues during the development and deployment stages, such as software bugs or hardware malfunctions.

Budget Overruns : The cost of implementing an MIS can be high, and it’s not uncommon for projects to go over budget.

Tips for Success while Implementing MIS

Involve Stakeholders : Ensuring that all stakeholders are involved in the planning and design stages can help to ensure the MIS meets everyone’s needs.

Provide Training : Offering comprehensive training can help to overcome resistance to change and ensure users are comfortable with the new system.

Regularly Review and Update : Regularly reviewing and updating the MIS can help to keep it running smoothly and ensure it continues to meet the organization’s needs.

The Future of Marketing Information Systems (MIS)

As we gaze into the crystal ball, we’ll discuss the future trends in MIS. This will include the role of artificial intelligence, machine learning, and big data in shaping the future of MIS.

Role of Artificial Intelligence in the Future of MIS

Artificial Intelligence (AI) is rapidly revolutionizing the field of Management Information Systems (MIS). AI can automate routine tasks, provide predictive analysis, and improve decision-making processes. 

Automation : AI can automate routine tasks, freeing up time for employees to focus on more complex tasks. For example, AI can automate data entry, reducing errors and improving efficiency. 

Predictive Analysis : AI can analyze large amounts of data to identify trends and patterns. This can help businesses predict future outcomes and make informed decisions. For example, AI can predict customer behavior, helping businesses to tailor their marketing strategies.

Improved Decision-Making : AI can provide insights and recommendations based on data analysis. This can improve the decision-making process, leading to better business outcomes. For example, AI can provide recommendations on how to optimize operations, reduce costs and improve productivity.

Role of Machine Learning in the Future of MIS

Machine Learning (ML), a subset of AI, is also playing a crucial role in the future of MIS. ML can analyze data and learn from it, improving its performance over time.

Data Analysis : ML can analyze large amounts of data to identify trends and patterns. This can help businesses to make informed decisions. For example, ML can analyze customer behavior, helping businesses to tailor their marketing strategies .

Continuous Learning : ML can learn from data, improving its performance over time. This can help businesses to adapt to changing circumstances. For example, ML can learn from customer feedback, helping businesses to improve their products or services.

Predictive Modeling : ML can build predictive models based on data analysis. This can help businesses to predict future outcomes and make informed decisions. For example, ML can predict sales trends, helping businesses to plan their inventory.

Role of Big Data in the Future of MIS

Big Data is transforming the field of MIS by providing businesses with access to vast amounts of data. This can improve decision-making processes and provide businesses with a competitive advantage.

Improved Decision-Making : Big Data can provide businesses with access to large amounts of data, improving the decision-making process. For example, Big Data can provide insights into customer behavior, helping businesses to tailor their marketing strategies .

Competitive Advantage : Big Data can provide businesses with a competitive advantage by providing insights that are not available to competitors. For example, Big Data can provide insights into market trends, helping businesses to stay ahead of the competition.

Predictive Analysis : Big Data can analyze large amounts of data to identify trends and patterns. This can help businesses to predict future outcomes and make informed decisions. For example, Big Data can predict customer behavior, helping businesses to tailor their marketing strategies.

Samrat is a Delhi-based MBA from the Indian Institute of Management. He is a Strategy, AI, and Marketing Enthusiast and passionately writes about core and emerging topics in Management studies. Reach out to his LinkedIn for a discussion or follow his Quora Page

Marketing91

Marketing Information System – Types, Tips and Examples

June 26, 2024 | By Hitesh Bhasin | Filed Under: Marketing

Marketing Information System regularly gathers, analyzes, interprets, stores, and distributes internal and external market data. Marketing information systems include CRM, market research , competitive intelligence , internal sales tracking, and external databases.

It empowers enterprises of all sizes. It provides access to company data and analyzes marketing trends, including sales success, customer segmentation, competitor tracking, and more. Businesses can reliably make strategy decisions with an MIS.

Key Takeaways

• A Marketing Information System (MIS) unifies the collection, analysis, storage, and distribution of market data from multiple sources.
• CRM, market research, competition intelligence, and internal sales tracking are all instruments used to make informed decisions.
• MIS helps businesses understand their customers’ wants and preferences, allowing them to build more effective marketing strategies and products.
• The system’s components include marketing research, data, intelligence systems, and information processes.
• Businesses can use MIS to improve sales forecasting , customer segmentation, and marketing campaign performance, resulting in higher profitability.

Table of Contents

What is a Marketing Information System?

A Marketing Information System is a system that collects, stores, analyzes, and distributes data to help organizations gain insights into their various target markets. It helps companies better understand customer needs and preferences to make smarter marketing decisions . The MIS comprises several components: Marketing Research, Data, Marketing Intelligence Systems, and Marketing Information Processes.

Marketing Research is a process that involves gathering information about the target market , such as customer demographics and trends. Marketing Data are the data sets collected from Marketing Research that provide insights into the target market . Marketing Information Systems are systems used to analyze Marketing Data and gain insights into current and future marketing opportunities. Lastly, Marketing Information Processes are the steps to analyze Marketing Data and create actionable insights.

All in all, the Marketing Information System process is an essential tool for businesses of all sizes. It allows businesses to collect and analyze customer data to make more informed marketing decisions . With the right Marketing Intelligence System in place, companies can better understand their target markets and make smarter business decisions.

What is the Importance of a Marketing Information System?

The importance of a Marketing Information System cannot be overstated. It is a critical tool for businesses to gain insights into their target markets, understand customer needs, and make more informed marketing decisions . The MIS helps companies to identify opportunities, design strategies, and track performance. Some of the reasons behind its importance are-

1. To ensure well-synchronized communication across all departments

A well-planned MIS can help organizations ensure that all departments are on the same page, from sales to marketing to finance. It allows them to easily share and access information across departments to make better decisions.

2. For gaining insight into customer buying behavior and preferences

Companies can gain valuable insights into their target markets by analyzing customer data collected through surveys, focus groups , or other means. This can help them better understand customer needs, preferences, and buying habits to develop more effective marketing strategies.

3. For measuring the success of promotional activities

The MIS can also measure the success of promotional activities such as advertising campaigns or special offers. By tracking response rates and other metrics, companies can get an idea of what works and what doesn’t, allowing them to adjust their strategies accordingly.

4. For developing effective marketing plans

The MIS can also be used to develop more effective marketing plans by providing insights into customer trends and needs and facilitating better communication between departments. This can help organizations decide where to focus their efforts to achieve maximum results.

4 Marketing Information System Components

A Marketing Information System (MIS) has four components: internal records, marketing intelligence activities, marketing research, and decision support systems . Let’s deep dive into these and understand how they work in marketing intelligence systems-

1. Internal records

Internal records encompass the data a company collects about its customers, products, and other operations. This includes analyzing sales figures and customer trends to determine the most effective marketing strategies. Some of the vital information that can be part of internal records are-

• Customer profiles
• Pricing strategies
• Product Inventory
• List of employees
• Market segmentation information
• Debits and credits
• Past data and reports, etc

All such information helps the Marketing Information System to make decisions regarding the future of marketing. When you leverage a Management Information System , you can gain unparalleled insight into your division’s performance and marketing capabilities. This data integration process offers you better visibility to ensure your team works effectively towards achieving its goals. An internal grasp of what works best for your company will give you the know-how needed to enhance marketing processes and draw in more consumers .

2. Marketing research

A marketing research system is an integral part of a Marketing Information System. It involves gathering data from external sources for decision-making. This includes primary and secondary research surveys, focus groups , and interviews.

Access to such information can help you gain insights into the current marketing environment , customer needs and preferences, competitive analysis, and much more. Marketing research is a powerful tool that can give you the edge you need to succeed in your industry.

Regarding market research, project-oriented inquiries can be used to answer specific market queries. To do so, various statistical techniques are employed, which call for using both internal and external data sources.

3. Marketing Intelligence

When used effectively, Marketing Intelligence can help you keep track of what’s going on in the marketing environment . It involves collecting and analyzing all the data related to the marketing environment , such as competitor activities, customer behavior, and emerging trends.

Gaining Marketing Intelligence lets you anticipate what your customers want or need. By monitoring certain external factors, you can develop product innovations that can help keep your business ahead of the competition.

Marketing intelligence also helps you better understand your target markets’ underlying dynamics. This can be especially useful when deciding where and how to advertise, which products to focus on, and other key strategies.

4. Marketing decision support system (MDSS)

An MDSS is a computerized system that helps you make marketing decisions. Marketing Information Systems power it and leverage the data collected from internal and external sources.

It provides an integrated approach to decision-making and can be used in strategic planning and tactical execution. A Marketing Decision Support System allows you to process, organize, and analyze the data to make informed marketing decisions.

An MDSS can help you identify new opportunities, develop insights into customer behavior, optimize resource use, and study campaigns’ effectiveness. It enables you to quickly react to market changes and take advantage of them before it’s too late. A marketing data support system is also an excellent tool for testing new marketing strategies and measuring the impact of your efforts.

Sources of Marketing Information

• Company Records: At the heart of any organization lies its rich data repository. This includes transaction records, customer databases , and financial sheets. These internal documents are treasure troves for understanding past performances and forecasting future trends.
• Market Analysis : Delving deep into the market through structured research is indispensable. This involves collecting, scrutinizing, and interpreting data regarding potential markets or specific audiences. Techniques can vary from surveys to focus groups , each offering insights into consumer behaviors and preferences.
• Digital Footprints on Social Networks: Platforms such as LinkedIn , YouTube , and Pinterest serve as modern-day oracles for marketing intelligence. They offer a direct line to consumer sentiments, showcasing trends, opinions, and the effectiveness of marketing campaigns in real time.
• Insights from Consumers: Direct input from consumers, whether through feedback forms, online reviews, or direct communication , is a crucial indicator of customer satisfaction and areas needing improvement. These insights provide a clear view of what works and what doesn’t directly from the end-user’s perspective.
• Observing Competitors: Keeping a close watch on your rivals is not just about knowing their products but also understanding their engagement tactics and marketing prowess. Analyzing their moves can shed light on market trends and reveal gaps in your strategy that need bridging.

Types of Data in a Marketing Information System

Marketing information systems manage diverse data types from various sources. Let’s have a look at those types –

1. Acquired databases

Companies can acquire data from other sources, such as market research firms , to gain insights into their target markets. Businesses can make more informed decisions by inputting purchased data into their marketing information system.

2. Internal company data

This includes customer information, such as purchase histories and preferences. Internal company data includes sales performance, pricing strategies, and promotional activities.

This refers to the information collected by marketers daily from their competitors’ products and services. It helps them identify opportunities in the market and better position their products for success.

4. Marketing research

This data type is collected through surveys, interviews, focus groups , etc. It helps marketers better understand the needs and preferences of their target customers so they can create more effective marketing campaigns .

A Marketing Information System is an excellent tool for gaining insights into customer behavior and optimizing marketing strategies. By integrating all the data sources mentioned above, businesses can make more informed decisions and achieve better results.

Steps Involved in a Marketing Information System Process

The process of a marketing information system involves a series of steps used to analyze data and communicate findings, ultimately affecting decision-making. These steps include

• Identify marketing metrics to use.
• Collect data from inside and outside sources.
• Create graphs to display trends.
• Share trend details with relevant departments.
• Analyze the data to make informed decisions on the right course of action.

Benefits of using a Marketing Information System

1. Streamlined research process

Marketing information systems (MIS) help simplify the research process . With an MIS in place, marketers can access data quickly and efficiently to evaluate customer needs and preferences for their products or services. This helps streamline the research process so that marketers can focus more on strategy creation based on data analysis .

Using advanced marketing and information management software, you can quickly gather data from surveys, external websites, and other sources and store it all in one convenient place for future reference.

2. Better decision-making

MIS can also help marketers improve their decision-making. Marketers can make informed decisions about their campaigns and strategies by having access to real-time data and analytics. This data helps give better insights into customer needs and preferences — allowing marketers to adjust plans to meet their goals.

Utilizing the insights gathered from an MIS, you can better understand your customers, sales activity, and competitors, thereby making more prudent decisions in all aspects of your business.

3. Uncomplicated accessibility

MIS also makes it easier for marketers to access data quickly and easily. You can get an up-to-date snapshot of customer preferences and trends with the right MIS. This will help speed up your decision-making process so that you can respond quickly to changes in the market.

An MIS encompasses a variety of software programs and web applications that help to store, access, and broadcast data across an organization. With these tools, any employee with the correct credentials can quickly peruse queries or requests for information.

4. Effective comparison of sources

MIS provides marketers with the ability to compare data from multiple sources. This can help you identify trends and insights you may have missed. You can also use these insights to create better campaigns and strategies for your business.

With an MIS, you can effortlessly compare various sources and guarantee that your product’s market has the most total picture available. The data collected from many different places – manually inputted or taken automatically with specific programs – is easy to access through this system. With one unified platform containing all your information, it’s easier than ever before to make sure everything about your product stays up-to-date!

5. Reliable and predictable data results

A Marketing Information System also helps ensure consistent data results. MIS automates the data collection process, which reduces errors and inconsistencies in the results. This makes it easier for marketers to trust their data, allowing them to make more informed decisions about their plans and strategies.

Leveraging an MIS to compile, store, and analyze data can ensure that your marketing team receives consistent results. This is because the same method of collection and examination can be used for each type of information you gather, making it easier to compare regular outcomes.

6. Optimized plans and evaluations

An MIS can also help marketers develop better plans and evaluate their strategies. With access to up-to-date customer preferences, you can more accurately assess the success of your campaigns and make changes accordingly.

Harnessing the power of an MIS ( Management Information System ) can help you identify, assess, and adjust your campaigns to ensure customer satisfaction and maximize success. Doing so will give you valuable insights into what works best for your product offering and target market.

7. Stay informed with lightning-fast market insights

Finally, MIS can help marketers respond quickly to changes in the market. With an MIS in place, you can generate quick reports with up-to-date information that will help inform your decisions. This helps marketers stay ahead of the competition and ensure their business stays competitive and successful.

By leveraging the appropriate methods to extract and evaluate data with your Management Information System, you can quickly generate timely reports on your sector to adjust strategies swiftly and maximize success.

Tips for using a Marketing Information System

1. Establish your objectives, goals, and metrics

Marketing Information Systems (MIS) are powerful tools when used correctly. Before you can use your Marketing Information System efficiently, consider the objectives and goals of your company, as well as what metrics will be the most critical indicators of success. Once these have been established, you can track different campaigns more effectively and make appropriate decisions.

2. Collaborate with team members

Marketing is a collaborative effort; an MIS should be handy for this task. Use the system to share data between teams, brainstorm ideas together, and help foster communication between colleagues. Collaborating on any project or initiative using a marketing intelligence system increases productivity significantly.

3. Bring the data to life by visualizing it

Marketing Information Systems can provide valuable insights into campaigns’ performance and help predict future trends. By presenting the data in a visual form, it can be easier to understand and act upon. Graphs, charts, and diagrams are all helpful for this purpose and should be used when possible.

4. Strategically gather your data

Marketing Information System is only as good as the data they contain. Collecting data is an important task, and it should be done strategically. Analyze the data regularly and determine which metrics are most important for your company’s success. Once you’ve identified those, focus on gathering more of that type of data rather than collecting any random figure.

Use of Marketing Information System

• Strategic Positioning : An MIS is critical in determining a product or service’s position, focusing on brand visibility and market penetration . This allows firms to assess their competitive position and make strategic adjustments, ensuring they remain relevant and visible in the consumer’s mind.
• Access to Valuable Data: Understanding client demographics, interests, and behaviors can be difficult. An MIS simplifies this by giving an accessible pool of essential data, resulting in a better understanding of the industry and the ability to implement focused marketing initiatives.
• Facilitating Informed Decisions: An MIS’s capacity to transform raw data into actionable insights is crucial to its purpose. This allows for more informed decision-making in different aspects of marketing, such as promotional campaigns, product innovation , and pricing modifications, ensuring that data support each decision.
• Optimizing Lead Management : Effective lead tracking and conversion are critical to the success of any marketing plan . An MIS assists in precisely identifying efficient marketing methods and outlining areas for improvement, hence optimizing the conversion funnel from potential leads to loyal clients.
• Revenue Amplification Plans: Using an MIS to understand consumer wants and identify market gaps allows firms to develop revenue-growth plans. This could entail releasing new items or customizing existing ones to match customer needs.
• Securing a Competitive Advantage : In today’s fast-paced market, staying ahead requires a thorough awareness of developing trends and customer behavior. Leveraging MIS data enables firms to predict market trends, innovate proactively, and gain a competitive advantage.

Real-World Examples of Marketing Information Systems

Through its Adidas Runtastic, Adidas similarly tracks user behavior and interactions across various digital platforms like websites and mobile applications. The gathered data on individuals’ purchase history, preferred choices, and exercise patterns are heavily utilized to tailor unique advertising strategies and suggest suitable products. Engaging with consumers via fitness competitions, rewards, and social network sharing is yet another feature Adidas Runtastic facilitates.

Pandora, a popular music streaming service, mirrors how Spotify leverages a marketing information system, albeit with a few twists. Its system examines subscribers’ listening behavior, preferences, and social interactions to provide tailored music suggestions and curate personalized playlists. Besides, the information system lays the groundwork for effective ad campaigns and monitors client engagement. The result: Pandora can predict the type of music subscribers would enjoy and smartly target its marketing efforts.

Conclusion!

A Marketing Information System is a powerful tool for marketing managers to optimize the accuracy and effectiveness of their marketing efforts. As a marketing data support system, it helps to provide companies with essential data and information that can be used to make informed decisions, develop successful marketing strategies , and increase sales .

By leveraging the power of the Marketing Information System, companies can gain valuable insights into their business environment , gain access to market data, and conduct marketing research. Moreover, the marketing information system can generate internal reports and help companies make sense of their internal company data.

Frequently Asked Questions (FAQs)

1. Why is a Marketing Information System necessary?

It assists organizations in making more informed marketing decisions by gathering and organizing data on consumers, competitors, and the market. This allows businesses to plan and act more strategically in marketing.

2. How frequently should a corporation update its Marketing Information System?

It depends on how quickly the industry changes. Some may need to update it monthly, while others may not. It is essential to keep it up to date with current market trends.

3. Can small enterprises utilize a Marketing Information System?

Yes, small firms can profit from it. Even simple technologies can assist you in learning client preferences, market trends, and competitors’ actions. This helps small firms make better decisions and remain competitive.

4. What is the distinction between a Marketing and a Management Information System?

A Marketing Information System focuses on marketing data such as market research and customer behavior. A Management Information System encompasses a broader range of corporate information, such as finances and employee details. The marketing system is only one component of the more extensive management system .

5. How does a Marketing Information System assist you in outperforming competitors?

It provides organizations with helpful information about the market and client preferences. With this intelligence, a firm can adjust fast, identify new opportunities, and make better decisions, allowing it to stay ahead of the competition.

Liked this post? Check out the complete series on Marketing

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• Direct Channel – Definition, Importance, Types and Benefits Information
• What is Product Information Management (PIM)?
• Information Processing – Definition, Tools and Stages
• What is Buzz Marketing? Tips, Types, and Examples
• What is New Product Development? Stages, Examples & Best Tips to Improve NPD
• Brand Awareness – Definition, Importance, Examples and Tips
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About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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Heya i’m for the first time here. I found this board and I find It truly useful

One need satisfication gives rise to another want. when wants get the ability to pay it leads to demand for any product or service.This is why it hs been aptly said Human beigns are a bundle of wants

Pls am new here, i want to be posted on any new article on this site.

hllw am new hia and i think this is wonderful…..

this is bloody amazing, mate

This Helped Alot Thank You!

haha lmao u are so funny

thax a lot………….i helped from here

This is helpful but need more components of a marketing information systems or at least 5 building blocks for a marketing information system. Thank you in advance for your professional help with these posts and comments

The article about the MIS is very good.

than you i need ansuwer

Understandable! This is so good. Thank you!

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Module 13: Marketing Function

The importance of marketing information and research, learning outcomes.

• Explain how segmentation and targeting relate to marketing strategy

Marketing Strategy Follows From the Segmentation and Targeting Process

Once your target market and customers have been identified, effective marketing moves to develop a strong knowledge base of those customers: the kind of knowledge that gives you unique insights into what they want and how to satisfy them better than the competition. The most reliable source of fresh customer insights is good  marketing information . Useful marketing information may come from a variety of sources both inside and outside your organization. Marketing information is generated by a variety of different activities, including marketing research.

Marketing research is a systematic process for identifying marketing opportunities and solving marketing problems, using customer insights that come out of collecting and analyzing marketing information. The mechanics of marketing research must be controlled so that marketers uncover the relevant facts to answer the problem at hand. Control over this fact-finding process is the responsibility of the marketing research director, who must correctly design the research and carefully supervise its execution, to ensure it yields the customer insights the organization needs.

A marketing information system is a combination of people, technologies, and processes for managing marketing information, overseeing market research activities, and using customer insights to guide marketing decisions and broader management and strategy decisions.

Refining Knowledge of Target Market Segments and Customers Is Power Against the Competition

The business environment is increasingly competitive. With something as simple as a Google search, customers have unprecedented opportunities to explore alternatives to what any single company offers. Likewise, companies have ample opportunity to identify, track, and lure customers away from their less-vigilant competitors. A regular infusion of fresh customer insights can make all the difference between keeping customers and losing them. Marketing information and research are essential tools for marketers and the management team as they align marketing strategy with customer wants and needs.

Consider the following examples:

• Before introducing OnStar, the first-ever embedded wireless service in cars, GM used marketing research to understand what types of applications would make consumers most interested in subscribing to the service and how much they would pay for it. Of all the benefits OnStar could offer, the research helped GM prioritize how the initial service would provide value, focusing on driver assistance and security. Research also helped determine OnStar pricing to help the company build a large subscriber base quickly. [1]
• Enterprise systems provider PeopleSoft recruited a diverse set of universities as early-adopter “Beta” partners to provide input as it designed a new student information system for higher education. This marketing research helped PeopleSoft create a versatile system that could support the needs of a variety of colleges and universities, ultimately leading to strong receptivity and market share when the new system became widely available. [2]

What Characteristics of the Target Customer Should Marketers Investigate To Develop Marketing Strategies?

An easy—and truthful—answer to this question is “everything.” There is no aspect of marketing to which information and research do not apply. Every marketing concept and every element involved in the marketing management process can be subjected to a great deal of careful marketing research and inquiry. Some important questions include:

• Who is the customer?
• What problems is the customer trying to solve with a given purchase?
• What does s/he desire in the way of satisfaction?
• How does the customer get information about available choices?
• Where does s/he choose to purchase?
• Why does s/he buy, or not buy?
• When does s/he purchase?
• How does s/he go about seeking satisfaction in the market?

Seeking answers to these questions yields insights into the customer’s needs, perceptions, and behaviors. From here, appropriate marketing strategy and corresponding tactics can be developed for the business to act upon. Another area in which research is critical is profitability. Organizations need to forecast sales and related costs in order to understand how their operations will be profitable. They also need to plan competitive marketing programs that will produce the desired level of sales at an appropriate cost. The analysis of past sales and interpretation of cost information are important in evaluating performance and providing useful facts for future planning. All these activities rely on marketing information and a rigorous marketing research process to produce insights managers can trust and act on.

Ongoing Marketing Research Leads to More Successful Marketing Strategies

In most business situations, marketers and managers must choose among two or more courses of action. This is where fact-finding, marketing information, and research into the target market segment and target customer enter to help make the choice.

Marketing information and research address the need for quicker, yet more accurate, decision making by the marketer. These tools put marketers close to their customers to help them understand who their customers are, what they want, and what competitors are doing. When different stakeholders have very different views about a particular marketing-related decision, objective information and research can inform everyone about the issues in question and help the organization come to agreement about the path forward. Good research should help align marketing with the other areas of the business.

Marketers should always be tapping into regular sources of marketing information about their organization and industry in order to monitor what’s happening generally. For example, at any given time marketers should understand how they are doing relative to sales goals and monitor developments in their industry or competitive set.

Beyond this general level of “tuning in,” additional market research projects may also be justified. As a rule, if the research results can save the company more time, money, and/or risk than it costs to conduct the research, it is wise to proceed. Ultimately, successful marketing strategies are developed on the basis of focused and continued research of customers identified by disciplined segmentation and targeting.

Practice Question

• Vincent P. Barabba, Surviving Transformation: Lessons from GM's Surprising Turnaround , pp 46–50, https://books.google.com/books?id=VvbDYad7cLoC&pg ↵
• Proquest, "First We Built, Now We Buy: A Sociological Case Study for Enterprise Systems in Higher Education," pp 292–203, https://books.google.com/books?id=rgIAaigKQBIC&pg ↵
• Revision and Adaptation. Authored by : Lumen Learning. License : CC BY: Attribution
• Practice Question. Authored by : Robert Danielson. Provided by : Lumen Learning. License : CC BY: Attribution
• Chapter 3: Marketing Research: An Aid to Decision Making, from Introducing Marketing. Authored by : John Burnett. Provided by : Global Text. Located at : http://solr.bccampus.ca:8001/bcc/file/ddbe3343-9796-4801-a0cb-7af7b02e3191/1/Core%20Concepts%20of%20Marketing.pdf . License : CC BY: Attribution

Marketing information systems

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• Michael J. Baker 2  

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In the increasingly competitive environment which has developed in recent years there can be little doubt that marketing intelligence has become a vital factor in the organisation’s ability to succeed. In the past, when change was less rapid than it is today, it was reasonable to assume that the best forecast of the immediate future was a direct extrapolation of past trends. In other words, change was seen largely as inevitable but as a continuous and predictable process. Accelerating technological change and the increase in international competition have resulted in turbulence and discontinuity and demand that we modify this assumption and recognise that to survive under these new conditions we must monitor and analyse our competitive environment continuously. To do so effectively marketing research must be seen as an ongoing process in which the organisation’s database is constantly reviewed and updated. No longer will it suffice to review sales data (which records what has happened rather than what might happen ) with the occasional dipstick study to confirm our prejudices and expectations. In future the firm’s survival will depend fundamentally upon its ability to read and anticipate environmental and competitive change and an essential element of this ability will be the creation and maintenance of an effective marketing information system or MIS.

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Ames, C.B. (1970) ‘Trappings vs Substance in Industrial Marketing’ Harvard Business Review , July–August.

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Berenson, Conrad (1969) ‘Marketing Information Systems’, Journal of Marketing , vol. 33, October, pp. 16–23.

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Cox, Donald F. and Good, Robert E. (1967) ‘How to Build a Marketing Information System’, Harvard Business Review , 45 (3) May–June, pp. 145–54.

Smith, Samuel V., Brien, Richard H. and Stafford, James E. (1968) ‘Marketing Information Systems: an Introductory Overview’, Readings in Marketing Information Systems .

Strathclyde Honours Marketing Students (1988–9) Marketing Information Systems (Glasgow, Department of Marketing, University of Strathclyde).

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Baker, M.J. (1991). Marketing information systems. In: Research for Marketing. Palgrave, London. https://doi.org/10.1007/978-1-349-21230-9_13

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Marketing Information System (MIS) Concept and Characteristics

The marketing information system (mis) can be defined as a structured network of relationships, involving people, machines and processes, of marketing..

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I.  concept.

1.  Definition

The  Marketing Information System  (MIS) can be defined as a structured network of relationships, involving people, machines and processes, which aims to generate an orderly flow of information from sources internal and external to the company and relevant to the area of marketing.

The SIM is materialized in a computer system with a database, whose analysis allows to know the variables that affect the marketing management of the company, especially those related to the monitoring of the market and the characteristics of the clients that comprise it. Understand your purchase process.

The growing importance of the client has made the CRM ( Customer  Relationship Management ) evolution stand out among the tools that make up the MISs, above all to personalize the company’s relationship with its customers and get to know them better. CRMs have allowed the implementation of relational marketing strategies in large consumer markets, as well as the use of all the information generated in customer interactions with the company through the Internet (eCRM).

2.  Requirements and advantages

The data that is entered in the SIM must be as reliable as possible, clearly determining its origin. In addition, they require setting an adequate update rate so that the system can provide useful information. Finally, it is also necessary to establish the level of disaggregation necessary to understand each of the parts or elements of the problem being analyzed.

The SIM, by managing the relevant information quickly and efficiently, improves the entire planning, implementation and  marketing control process . Thus, it makes it easier for  marketing management  to make decisions related to aspects such as the development of new products, pricing, distribution channels, advertising campaigns, etc.

II.  THE INFORMATION, OBJECT OF THE SIM

1.  The data collection

Information is the raw material for  marketing decision making  and the SIM is the channel that follows this information to reach the marketing direction. The SIM allows the information to be collected, classified, analyzed, evaluated and distributed on time. The company manages a multitude of data and the SIM converts this data into relevant information for  marketing decision makers . It is, therefore, fundamental for organizations, especially as they increase in size and complexity, systematize the collection of data. This effort helps to avoid the problems derived from the lack of relevant information and the existence of false or incomplete data, which make the information search and treatment processes more expensive and can delay decision making in the  SMB marketing department.

The data that feed the SIM can come from external sources and internal sources of the company, although sometimes the border between both can seem somewhat diffuse. For example, in CRM systems there is a  history of customer transactions  (internal data of the company) but also with data that the customer has been able to provide (external data). In general, a criterion to differentiate between internal and external sources is that external sources are data purchased abroad (journals, databases, sectoral studies …), while internal data are exclusively owned by the company. .

2.  Reasons to implement a SIM

The SIM aims to satisfy the information needs that  marketing managers  need to make sound commercial decisions. The specific reasons that lead organizations to design and implement a SIM are diverse:

• –  Your organizational structure can be complex and make information flows difficult.
• –  The sources of information can be numerous.
• –  The  business environment  is increasingly complex to analyze and organizations operate in larger and more difficult to know markets.
• –  Market research is insufficient.

3.  Characteristics of the information of a SIM

The information provided by the SIM must meet minimum requirements that guarantee its quality. Specifically, the SIM information must be:

• –  Timely. The information must be available when it is needed.
• –  Flexible. The information must be presented in various formats and details so that it adapts to the information requirements of each moment and situation.
• –  Complete. The system must provide the necessary information to the decision maker, without falling into an excess of data that would only hinder the analysis.
• –  Exact. The level of accuracy of the information must be adapted to the needs of the situation.
• –  Convenient. Access to information must be easy and it must be presented clearly and effectively to the marketing decision maker.

III.  STRUCTURE AND FUNCTIONING OF A SIM

1.  structure.

The SIM is usually divided into four subsystems that provide the necessary information to the  marketing manager : the internal reporting subsystem, the  market research subsystem , the  analytical marketing subsystem , and the  marketing intelligence subsystem .

a)  Subsystem of internal records

This part of the SIM allows access to standardized data of the internal management of the company: production volumes, unit costs, sales figures broken down by segments, regions or products, number and types of customers. These data allow to control the effectiveness of marketing actions.

b)  Market research subsystem

Market research provides information to the company on specific aspects from  ad hoc  studies or panels, with a high level of depth.

c)  Analytical marketing subsystem

This module of the SIM helps the  marketing manager  in its functions of analysis, planning, implementation and control by using statistical tools that work analyzing the data of the rest of subsystems.

d)  Marketing intelligence subsystem

This part of the SIM allows filtering, compiling, evaluating and storing information about the environment from the sales team, from existing documentation or from other sources as providers of added value information. It is a set of sources and procedures used to obtain information, in time, on the most relevant aspects of the marketing environment of the organization.

2. Operation

The dynamics of the implementation and operation of a SIM is marked by three basic activities: the evaluation of information needs, the development of information and, finally, the distribution of information.

a)  Evaluation of information needs

The dynamics of the SIM starts with the interaction with marketing managers to define their information needs. This stage requires consultancy services and analysis of processes, systems, organization and methods.

b)  Development of information

Based on the company’s internal records, marketing intelligence activities and  market research , the SIM develops the necessary information, which is processed by the analytical subsystem to make it more useful. It is the most critical and complex phase, having as an integrated element the data repository or  Data Warehouse , a powerful fundamental database for the planning, execution and  measurement of marketing actions .

c)  Distribution of information

Finally, the SIM distributes the information to the marketing management in the correct way and at the opportune time to help the planning, implementation and control of marketing. The distribution of this information requires connectivity and communication tools.

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Marketing Information System vs. Marketing Research: Understanding Data Strategies

The difference between marketing information system and marketing research.

In the fast-paced world of marketing, data is king. Businesses rely on data to make strategic decisions, target their audience effectively, and stay ahead of the competition. Two key components of a data-driven marketing strategy are the Marketing Information System (MIS) and Marketing Research. While they may sound similar, these two approaches to gathering and analyzing data have distinct differences that can impact the success and effectiveness of a marketing campaign. In this article, we will explore the difference between MIS and Marketing Research, and how each can contribute to a company’s data strategy.

The Role of Marketing Information System (MIS)

A Marketing Information System is a framework that a company uses to gather, organize, analyze, and store data relevant to its marketing efforts. Think of it as the backbone of a company’s data strategy. MIS helps businesses collect and manage internal and external data, transforming it into actionable insights that inform marketing decisions. It includes a combination of people, processes, and technology to streamline the flow of information within an organization.

The primary focus of MIS is to provide real-time data about the company’s marketing activities. It helps companies monitor the effectiveness of their marketing campaigns, track customer behavior, and identify trends and patterns in the market. MIS also enables businesses to gather competitive intelligence, keeping them informed about their rivals’ strategies and market positioning. By having access to comprehensive and up-to-date information, businesses can make informed decisions, allocate resources effectively, and optimize their marketing efforts.

The Components of Marketing Information System

A Marketing Information System consists of various components that work together to gather, process, and distribute information within the organization. Here are the key components:

• Internal Data: This includes data generated within the company, such as sales figures, customer feedback, and website analytics.
• External Data: This refers to data obtained from external sources, such as market research reports, industry publications, and government data.
• Information Processing: Involves collecting, storing, analyzing, and presenting data in a format that is useful for decision-making.
• Marketing Intelligence: The process of gathering and analyzing external data to understand market trends, competitor strategies, and customer behavior.
• Marketing Decision Support System (MDSS): A subset of MIS that uses data analysis and modeling techniques to support complex marketing decision-making.

The Significance of Marketing Research

While MIS focuses on internal and external data collection, Marketing Research is a more targeted approach to gather insights about a specific marketing problem or opportunity. Marketing Research involves the systematic gathering, analysis, and interpretation of data related to a particular market, customer segment, or marketing challenge. Its primary objective is to provide actionable insights that drive marketing strategy and decision-making.

Marketing Research allows businesses to gain a deep understanding of their target market, customer preferences, and competitive landscape. It helps identify market trends, consumer behavior patterns, and opportunities for product or service innovation. By conducting research, businesses can gather feedback from customers, measure customer satisfaction, and uncover emerging market needs.

The Process of Marketing Research

Marketing Research follows a systematic process to ensure the accuracy and reliability of the data collected. Here are the key steps involved:

• Defining the Problem: Clearly identify the marketing challenge or opportunity that requires research.
• Research Design: Determine the research approach, methodology, and data collection techniques.
• Data Collection: Collect data through surveys, interviews, focus groups, or other research methods.
• Data Analysis: Analyze the collected data using statistical tools and techniques.
• Interpretation and Reporting: Interpret the findings and communicate the insights through reports or presentations.

The Synergy Between MIS and Marketing Research

While MIS and Marketing Research have distinct differences, they are not mutually exclusive. In fact, they complement each other and play a crucial role in a company’s data strategy. MIS provides a foundation of internal and external data, creating a centralized repository of information that Marketing Research can leverage. The insights gathered from Marketing Research, in turn, help refine and enhance the accuracy and relevance of MIS data.

By integrating MIS and Marketing Research, businesses can create a comprehensive and dynamic data strategy that covers both macro-level market trends and micro-level customer insights. This synergy enables companies to make data-driven decisions, stay informed about market changes, adapt to customer needs, and drive business growth.

In today’s data-driven marketing landscape, both Marketing Information System and Marketing Research are essential elements in a company’s data strategy. While MIS provides a framework for data collection, analysis, and storage, Marketing Research allows businesses to dive deeper into specific marketing problems or opportunities. By leveraging the strengths of both approaches, companies can gain a competitive advantage and stay ahead of the curve. So, whether you’re a marketer, business owner, or data enthusiast, understanding the difference between MIS and Marketing Research is crucial for unlocking the power of data in your marketing efforts.

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MIS: Meaning, Definitions, Components, Types, Functions, Advantages, Difference

Table of Contents

• 1 What is MIS?
• 2 Definition of MIS
• 3.1 Internal Records
• 3.2 Product Database
• 3.3 Salesperson Database
• 3.4 Marketing Intelligence System
• 3.5 Marketing Research System
• 3.6 Marketing Decision Support System
• 4.1 Executive Information System (EIS)
• 4.2 Marketing Information System (MIS)
• 4.3 Business Intelligence System (BIS)
• 4.4 Customer Relationship Management System (CRM)
• 4.5 Sales Force Automation System (SFA)
• 4.6 Transaction Processing System (TPS)
• 4.7 Knowledge Management System (KMS)
• 4.8 Financial Accounting System (FAS)
• 4.9 Human Resource Management System (HRMS)
• 4.10 Supply Chain Management System (SCM)
• 5.1 Data Capturing
• 5.2 Processing of Data
• 5.3 Storage of Information
• 5.4 Retrieval of Information
• 5.5 Dissemination of Information
• 6 Advantages of MIS
• 7.1 On Basis of Meaning
• 7.2 On Basis of Purpose
• 7.3 On Basis of Scope
• 7.4 On Basis of Nature
• 7.5 On Basis of Reports
• 7.6 On Basis of Orientation
• 7.7 On Basis of Problems
• 7.8 On Basis of Data
• 7.9 On Basis of Operation
• 7.10 On Basis of Computers
• 8.1 What is marketing information system?
• 8.2 What are the components of MIS?
• 8.3 What are the types of MIS?
• 8.4 What are the functions of MIS?
• 8.5 What are the advantages of MIS?
• 8.6 What are the difference between MIS and marketing research?

What is MIS?

A marketing information system ( MIS ) is a continuing and interacting system of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information for use by marketing decision–makers to improve their marketing planning, implementation, and control.

MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision-makers can use to make day-to-day decisions.

MIS is the acronym for Management Information Systems. In a nutshell, MIS is a collection of systems, hardware, procedures, and people that all work together to process, store, and produce information that is useful to the organization. The following are some of the justifications for having an MIS system :

• Decision makers need the information to make effective decisions. Management Information Systems ( MIS ) make this possible.
• MIS systems facilitate communication within and outside the organization as employees within the organization are able to easily access the required information for day-to-day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.
• Record keeping management information systems record all business transactions of an organization and provide a reference point for the transactions.

Definition of MIS

These are some of the simple definitions of MIS :

Components of MIS

The Marketing Information System refers to the systematic compilation, review, interpretation, storage, and distribution of market information to marketers on a daily and continuous basis, both from internal and external sources.

The marketing information system distributes the related data to marketers who can make appropriate marketing decisions, such as pricing , packaging, production of new goods, delivery, media, promotion , etc.

Each marketing activity functions in unison with both within and outside the organization’s prevailing circumstances, and therefore there are many sources (e. g. Internal, Marketing Intelligence, Marketing Research ) from which the appropriate consumer information can be accessed.

Following are the components of MIS :

Internal Records

Product database, salesperson database, marketing intelligence system, marketing research system, marketing decision support system.

With its internal records of sales data, customer database, product database, financial data, operational data, etc., the Organization will collect information. A comprehensive explanation of the internal data sources is given below:

Information may be obtained from records such as invoices, copies, and billing documents prepared by businesses upon receipt of the order for products and services from consumers, distributors, or sales representatives The latest sales information acts as an assistant to the Marketing Information System should be maintained on a regular basis.

Present sales and inventory level reports help managers decide on their objectives, and marketers may use this data to design their potential sales strategy . Companies maintain many databases, such as the Consumer Database, in which the full information on the name, address, phone number, purchasing frequency, financial status, etc. of the customer is kept.

Product database in which full information about the price, features, and variations, of the product is stored.

The salesperson database, wherein the complete information about the salesperson, his name, address, phone number, sales target, etc. is saved In the data warehouse, the companies store their data from where the data can be retrieved whenever the need arises.

When the data is stored, it is mined by statistical experts by applying many computer software and techniques to turn it into usable meaningful information that offers facts and figures.

The marketing intelligence system provides data on market events, i. e. marketing environment-related data that is external to the organization. It includes information on changing market trends, the pricing strategy of the competitor, changes in the tastes and preferences of the customer, new products launched on the market, the competitor’s promotion strategy, etc.

In order to have an effective marketing information system, companies should work aggressively by taking the following steps to enhance the marketing intelligence system:

• Providing the right training and encouraging the sales force to keep track of market trends, i. e. changing customer tastes and preferences, and providing suggestions for improvements if any.
• Motivating the partners of the channel, i. e. dealers, distributors, distributors in the real market to provide the appropriate and required customer and competitor details.
• Companies can also strengthen their system of marketing intelligence by having more and more competitor knowledge. This can be achieved either by buying the product of the competitor, visiting trade shows, or reading the written papers of the competitor in magazines, journals, or financial reports.

Marketing Research is the systematic collection, organization, analysis, and interpretation of primary or secondary data to find out solutions to marketing problems. By applying various statistical instruments, businesses perform marketing research, including shifts in the tastes and desires of the client, competitor tactics, the reach of new product launches, etc.

The data, which can be either primary data (first–hand data) or secondary data(second–hand data, available in books, magazines, research reports, journals, etc. ), must be obtained in order to perform market research.

It requires many software programs that can be used to evaluate the information gathered so far by marketers to make better marketing decisions. The marking managers can save the huge data in a tabular form with the use of computers and can apply statistical programs to evaluate the data and make decisions in line with the results.

Therefore, marketers need to check the marketing environment, i. e. both the internal (within the organization) and the external (without the organization), so that it is possible to plan marketing practices, processes, and strategies accordingly.

Types of MIS

A management information system is a broad term that incorporates many specialized systems. The major types of MIS :

Executive Information System (EIS)

Marketing information system (mis), business intelligence system (bis), customer relationship management system (crm), sales force automation system (sfa), transaction processing system (tps), knowledge management system (kms), financial accounting system (fas), human resource management system (hrms), supply chain management system (scm).

Senior management uses an EIS to make decisions that affect the entire organization. Executives need high-level data with the ability to drill down as necessary.

Marketing teams use MkIS to report on the effectiveness of past and current campaigns and use the lessons learned to plan future campaigns.

Operations use BIS to make business decisions based on the collection, integration, and analysis of the collected data and information . This system is similar to EIS, but both lower-level managers and executives use it.

A CRM system stores key information about customers, including previous sales, contact information, and sales opportunities. Marketing, customer service, sales, and business development teams often use CRM.

A specialized component of a CRM system that automates many tasks that a sales team performs. It can include contact management, lead tracking, and generation, and order management.

An MIS that completes a sale and manages related details. On a basic level, a TPS could be a point of sale (POS) system or a system that allows a traveler to search for a hotel and include room options , such as price range, the type, and a number of beds, or a swimming pool, and then select and book it. Employees can use the data created to report on usage trends and track sales over time.

Customer service can use a KM system to answer questions and troubleshoot problems.

This MIS is specific to departments dealing with finances and accounting, such as accounts payable (AP) and accounts receivable (AR).

This system tracks employee performance records and payroll data.

Manufacturing companies use SCM to track the flow of resources, materials, and services from purchase until final products are shipped.

Functions of MIS

MIS is set up by an organization with the prime objective to obtain management information that is to be used by its managers in decision-making. Thus, MIS must perform the following functions in order to meet its objectives. Following are the functions of MIS :

Data Capturing

Processing of data, storage of information, retrieval of information, dissemination of information.

MIS captures data from various internal and external sources of an organization. Data capturing may be manual or through computer terminals. End users typically record data about transactions on some physical medium, such as paper form, or enter it directly into a computer system .

The captured data is processed are converted into the required management information. Processing of data is done by such activities as calculating, comparing, sorting, classifying, and summarizing. These activities organize, analyze and manipulate data using various statistical, mathematical, operations research, and/ or other business models.

MIS stores processed or unprocessed data for future use. If any information is not immediately required, it is saved as an organizational record. In this activity, data and information are retained in an organized manner for later use.

Stored data is commonly organized into fields, records, files, and databases, all of which will be discussed in detail in a later chapter.

MIS retrieves information from its stores as and when required by various users. As per the requirements of management users, the retrieved information is either disseminated as such or it is processed again to meet the exact MI demands.

Information, which is a finished product of MIS, is disseminated to the users in the organization. It could be periodic through reports, or online through computer terminals.

Advantages of MIS

Let’s understand the advantages of MIS :

• Organized data collection.
• A broad perspective.
• The storage of important data.
• An avoidance of crises.
• Coordinated marketing plans.
• Speed in obtaining sufficient information to make decisions.
• Data amassed and kept over several time periods.
• The ability to do a cost-benefit analysis

The disadvantages of a Marketing information system are high initial time and labor costs and the complexity of setting up an information system.

Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.

Difference Between MIS and Marketing Research

These are the basis of differences between MIS and marketing research :

On Basis of Meaning

On basis of purpose, on basis of scope, on basis of nature, on basis of reports, on basis of orientation, on basis of problems, on basis of data, on basis of operation, on basis of computers.

MIS means to collect, analyze and supply relevant marketing information to the marketing managers. The marketing managers use this information for taking effective marketing decisions. It is a permanent and continuous process.

Marketing Research (MR) is a systematic process of collecting and analyzing information to solve a specific marketing problem.

The main purpose of MIS is to provide relevant information to marketing managers and enable them to make effective marketing decisions.

However, the main purpose of Marketing Research (MR) is to solve a specific marketing problem.

The scope of MIS is wide. Marketing Research (MR) is one of its components. It is not only used to solve problems but also helps to prevent problems in the future.

The scope of Marketing Research (MR) is narrow. It is one small part of MIS. It solves a specific present marketing problem.

MIS is more nonspecific or general in nature. It can solve many types of marketing problems.

Marketing Research (MR) is more specific or particular in nature. At one time, it can only solve a single type of marketing problem.

MIS gives four types of reports namely, plan reports, periodic-reports, triggered reports, and demand reports.

Marketing Research (MR) provides only one report called as ‘MR Report.’

The orientation of MIS is more future-oriented when compared to MR.

However, the orientation of Marketing Research (MR) is more past and present when compared to MIS . It concentrates more on the earlier and the latest information. It uses this information to solve a current marketing problem.

MIS deals with and attempts to solve many different marketing problems at one time. For this, it collects, stores analyzes, and supplies relevant market information to the marketing managers.

Marketing Research (MR) only deals with a single marketing problem at one time. It doesn’t solve multiple marketing problems simultaneously.

In MIS , the data is collected more frequently, usually almost daily. This is a must for every company.

In Marketing Research (MR), the data is not collected as frequently as in MIS. It is collected on a required basis.

MIS is a permanent and continuous system. Here, the inflow of market information never stops. Data is constantly collected and stored for further analysis. It is properly analyzed, studied, and well-organized before supplying to the marketing managers. MIS has a starting but no ending point.

Marketing Research (MR) is not a continuous system. Here, data is collected only when a company faces a specific marketing problem. It has a starting and ending point.

MIS is heavily based on the use of computers. Here, computing technologies are widely used to ease and facilitate data collection, storage, analysis, retrieval, and supply of relevant information to marketing managers of the company.

Unlike MIS , Marketing Research (MR) hardly makes use of computers. It uses computers only for analyzing some information and is not entirely based on computing technologies.

FAQ Related to MIS

What is marketing information system.

A marketing information system (MIS) is a continuing and interacting system of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information for use by marketing decision–makers to improve their marketing planning, implementation, and control.

What are the components of MIS?

Following are the components of management information system: 1. Internal Records 2. Product Database 3. Salesperson Database 4. Marketing Intelligence System 5. Marketing Research System 6. Marketing Decision Support System.

What are the types of MIS?

Following are the types of management information systems: 1. Executive Information System (EIS) 2. Marketing Information System (MIS) 3. Business Intelligence System (BIS) 4. Customer Relationship Management System (CRM) 5. Sales Force Automation System (SFA) 6. Transaction Processing System (TPS) 7. Knowledge Management System (KMS) 8. Financial Accounting System (FAS) 9. Human Resource Management System (HRMS) 10.  Supply Chain Management System (SCM).

What are the functions of MIS?

Following are the functions of marketing information systems: 1. Data Capturing 2. Processing of Data 3. Storage of Information 4. Retrieval of Information 5. Dissemination of Information.

What are the advantages of MIS?

Following are the advantages of marketing information systems: 1. Organized data collection. 2. A broad perspective. 3. The storage of important data. 4. An avoidance of crises. 5. Coordinated marketing plans. 6. Speed in obtaining sufficient information to make decisions. 7. Data amassed and kept over several time periods. 8. The ability to do a cost-benefit analysis.

What are the difference between MIS and marketing research?

MIS  means to collect, analyze and supply relevant marketing information to the marketing managers. The marketing managers use this information for taking effective marketing decisions. It is a permanent and continuous process.

Marketing Research  (MR) is a systematic process of collecting and analyzing information to solve a specific marketing problem.

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Marketing Information System: Introduction, Importance, Components and Advantages

Everything you need to know marketing information system. Marketing information systems are really the frameworks used for managing, processing and accessing data.

They can be simply a sharing of information by key departments, but are more likely to be some form of integrated system based around information technol­ogy.

The important issue is that the information from such a system is presented in a way that is useful to the marketing decisions.

The term ‘marketing information system’ or MIS is used to describe such a system. Such systems are generally discussed in the context of marketing information or marketing research. ( It should be observed that the term MIS is commonly used for the somewhat more far reaching ‘management information system’).

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Learn about:-

1. Definition of Marketing Information System 2. Evolution of Marketing Information System 3. Scope 4. Characteristics 5. Importance 6. Classification 7. Functions

8. Dimensions 9. Basic Properties 10. Steps 11. Components 12. Sources of Information 13. Marketing Information 14. Categories 15. Marketing Information and Analysis 16. Advantages and Limitations.

Marketing Information System: Definition, Scope, Importance, Functions, Steps, Components and Advantages

• Introduction to Marketing Information System
• Definition of Marketing information System
• Evolution of Marketing Information System
• Scope of Marketing Information System
• Characteristics of Marketing Information System
• Importance of Marketing Information System
• Classification of Marketing Information System
• Functions of Marketing Information System
• Dimensions of Marketing Information Systems
• Basic Properties of Marketing Information System
• Steps in Marketing Information System
• Components of Marketing Information System
• Sources of Information
• Market Information
• Categories of Marketing Information System
• Marketing Information and Analysis
• Advantages and Disadvantages of Marketing Information System

Marketing Information System

With the increasing use of the computer, companies are becoming more interested in the development of a corporate wide, inte­grated management information system. The purpose of such a sys­tem is to bring all of the flows of recorded information in the entire company into a unified whole. Thereby it is hoped that the manager’s capacity to plan and control the company’s activities will be improved. Such a system is often seen as a marked improvement over current procedures.

As companies have attempted to introduce such a system, how­ever, a consensus seems to be growing, especially among some computer hardware manufacturers, that a more realistic approach is to begin with smaller systems, such as one in marketing, or in production.

As Business Week recently put it, “Skeptics are backing of and asking whether one big system is such a good idea after all.” The reason for this change in view is the growing awareness that these smaller subsystem, such as one for marketing, can per­haps be conceptualized in enough detail to be operational, whereas, in the current state of the art, the larger systems probably cannot.

The human mind simply cannot grasp the whole manage­ment operation with efficient clarity and detail to permit it to be structured and modeled. New concepts will probably have to be developed to aid us in thinking about such a complex phenome­non. In the meantime, management can proceed to develop the smaller systems. In building the smaller systems too, we can ben­efit by learning from the mistakes that were made with global systems.

Marketing information systems are really the frameworks used for managing, processing and accessing data. They can be simply a sharing of information by key departments, but are more likely to be some form of integrated system based around information technol­ogy. The important issue is that the information from such a system is presented in a way that is useful to the marketing decisions.

Even in quite small companies they can involve large quantities of data. One appar­ently logical approach to the problem of extensive data is to develop, using computer technology, a system which stores and provides access to the information needed by those making marketing decisions.

The term ‘marketing information system’ or MkIS is used to describe such a system. Such systems are generally discussed in the context of marketing information or marketing research. ( It should be observed that the term MIS is commonly used for the somewhat more far reaching ‘management information system’).

While it is essential for organisations to have systems by which marketing information can be stored, processed and accessed, it should be clear from the points made regarding the nature of information in general, and marketing information in particular, that such systems have fundamental limitations. At best the system can only handle such tangible and intangible information as is made available to it.

There are three basic components of a good marketing information system:

1. Information acquired via market intelligence

2. Information from operating data

3. Information library.

What a MkIS does is to bring together data from these sources, usually into a comput­erised database. By structuring it appropriately this allows the interrogation and linking of the data. It is important for the systems to be designed by marketers, not computer people, as the form of the output is critical to good decisions.

Market intelligence is all of the data available from the many external sources. It may have been acquired formally or informally but will usually be checked for reliability before it is entered into an MkIS.

Information from operating data, such as production or accounts, has been covered under the heading of operational information. It is usually different from marketing informa­tion as it is collected for very different reasons. Nevertheless, there is likely to be some marketing relevance in this data and that must input into the MkIS.

It could perhaps con­tain the details of car production, 2-door versus 4-door, or various engine sizes ordered. Certainly sales information drawn from invoices is very impor­tant and yet this needs to be presented in a way that might categorise customers by relevant market segment, or might show products purchased in as much detail as possi­ble. It could take the form of a sophisticated customer database, such as that used by major service companies for mail order or airline reservations.

The information library is a collection of all the formal research gathered by an organisa­tion that is still relevant and up to date. It might also include research surveys carried out by trade associations or by associated companies, as such reports are sometimes available and they do add to knowledge. Thus the MkIS will contain a comprehensive collection of all relevant information which could help achieve better marketing decisions.

Computer-based systems are particularly useful for handling numerical information, but can provide only limited assistance when handling qualitative information based on descriptions and ideas. The need to address this problem has been recognised, and much work has been done to develop ‘decision support systems’ designed to provide the infor­mation needed for marketing decisions.

No doubt the number of companies developing and using such systems will increase. The main benefit offered by such systems is likely to be the facilities they offer for accessing the available information. Because of the volume, complexity and time-dependent nature of marketing information, the provision of market­ing information will continue to be the specialist marketing activity of marketing research.

Marketing Information System – Definitions Provided by Eminent Authors: Cundiff, Still, Govoni, K. Cox, K. Gonod, R. Good and Professor Alder Lee Opines

Marketing information system is a set of procedures and methods for regular and planned collection, analysis and presentation of information in making marketing decisions. It is an interacting, continuing, future-oriented structure of persons, machines and procedures designed to generate an orderly flow of information collected from internal and external sources of information.

It is an integrated combination of information, information processing and analysis, equipment and tools (i.e., software and hardware) and information specialists who analyse and interpret the collected information and provide it to decision-makers to serve their analysis, planning and control needs.

Marketing information system is a broader and more encompassing term than market research and a variation of the term management information system. Marketing Information System (MIS) is the structure of people, equipment and procedures used to gather, analyses and distribute information required by an organisation.

These are the data to be used as a basis for marketing decisions. Market research reveals that information is collected for a specific reason or project; the major objective is a one-time use.

Marketing information system is a consciously developed plan for information flow (side by side with goods flow) and it is an ongoing or continuous process.

It is defined as “a set of procedures and methods for the regu­lar, planned collection, analysis, and presentation of information for use in making marketing decisions.” – (K. Cox and R. Good)

Marketing information is an ongoing repetitive process of collection, analysis and presentation of information, whereas the marketing research subject is an intermittent or irregular activity — on a project-to-project basis and it is concerned with solving specific marketing problems. Of course, it is a major component of market­ing information system.

The definitions of marketing systems as given by various philosophers are:

Cundiff, Still and Govoni define MIS as, “Marketing information system is an organised set of procedures, information handling routines and reporting techniques designed to provide the information required for making marketing decision.”

K. Cox and K. Gonod hold, “MIS is a set of procedures and methods for the regular and planned collection, analysis and presentation of information in making marketing decisions.”

Professor Alder Lee opines “Marketing information system is an interacting, continuing, future oriented structure of people, equipment and procedure designed to generate and process an information flow which can aid business executives in the management of their marketing programmes.”

Marketing Information System – Evolution: MIS to Help Develop Marketing Plans, MIS to Evaluate the Marketing Plan’s Effectiveness

Today many companies no longer think of marketing research in terms of only a single project. Through experience managers have learned that they need certain kinds of information at regular intervals of time in order to deal with recurring decisions. As a consequence, they have found it very helpful to use several regularly scheduled research projects that support or complement one another in providing managers with the appropriate information needed for those recurring decisions.

When a company begins to regularly schedule the coordination of findings from several research projects designed to assist in specific recurring decision situations, the company has begun to develop a marketing information sys­tem- MIS for short.

Such marketing information systems are beginning to evolve, as the following two examples illustrate:

1. MIS to Help Develop Marketing Plans:

To help its managers develop their marketing plans, the Gillette Company uses information gathered from five different types of regularly recurring research projects. The five projects were designed to provide the managers a complete picture of the razor and blade market, including detailed descriptions of consumers, competition, and dis­tribution. The five projects, and the usefulness of the information they gather, are as follows.

These five projects provide Gillette marketing managers with information on market shares, brand loyalty and brand switching, consumer attitudes, brand and advertising awareness, product advantages versus competition, inventory levels, out-of-stock, retail prices and display, local advertising, and more.

As the data are gathered from recurring studies, the managers have a complete picture of current market and competitive conditions from the most recent set of studies, and they know the recent trends that exist in all of these data. All of these items of information provide the Gillette man­agers an excellent historical record on which to base the development of their new marketing plans.

2. MIS to Evaluate the Marketing Plan’s Effectiveness:

Gross margin, marketing expenditures, and contribution to earnings are recorded for each market area and also totally. This information is also shown for each market (1) as a percentage of the total for all markets and (2) as the dollar amount of change this year compared with last year. Additionally, the total industry sales in dollars, the firm’s market share, the percentage of retail distribution achieved for the product, and television media costs are shown for each market, both for this year and last.

With these data, management can observe changes in demand (as reflected in total industry sales); changes in sales, costs, and earnings, changes in competition (as reflected in market share and retail distribution percentages) and, changes in advertising costs (as reflected in television media costs). This information is available by market and for all markets. With such information management can reappraise a product’s marketing expenditures plan as well as the effectiveness of the advertising-sales promotion mix used and then make changes.

For example- in Area A, advertising and promotion expenses of $100,000 produced $260,000 of contribution to earnings, while in Area E advertising and pro­motion expenses of $400,000 produced only $280,000 of contribution to earnings. This suggests that the company might increase its total contribution to earnings by shifting some advertising and promotion money from Area E to Area A.

Concluding Comments on Marketing Research Usage:

The materials show that marketing research is being used to measure the characteristics of markets, to obtain information needed for forecasting, to evaluate new-product ideas and improve existing products, to assist man­agers in making better advertising and promotion decisions, and for many other purposes. Marketing research is used throughout the four phases of the administrative process, from establishing strategies all the way through to evaluating the effectiveness of the marketing plan used to try to achieve the established strategy.

The role of marketing research appears to be headed for higher levels of sophistication and utilization as more and more companies begin to develop their own Marketing Information Systems (MISs).

Marketing Information System – Scope: Strategy Implementation, Strategy Development, Market Monitoring, Support Management, Decision Making and a Few Others

Scope # 1. strategy implementation:.

MIS helps in product launches, authorizes the co-ordination of marketing strategies, and is an integral part of Sales Force Automation (SFA), Customer Relationship Management (CRM), and customer service systems implementations. It permits decision makers to more effectively manage the sales force as well as customer relationships.

Some customer management software companies are extending their CRM applications to include Partner Relationship Management (PRM) capabilities. This has become increasingly important as many marketers are choosing to outsource important marketing functions and form strategic alliances to address new markets.

Scope # 2. Strategy Development:

Information needed to develop marketing strategy is also provided by MIS. It supports strategy development for new products, product positioning, marketing communications (advertising, public relations, and sales promotion), pricing, personal selling, distribution, customer service and partnerships and alliances. MIS gives the foundation for the development of information system-dependent e-commerce strategies.

Scope # 3. Market Monitoring:

MIS enables the identification of emerging market segments, and the monitoring of the market environment for changes in consumer behaviour, competitor activities, new technologies, economic conditions and governmental policies at the time of using market research and market intelligence.

Scope # 4. Wider Applications:

Under modern marketing ideologies, MIS includes operational, sales and marketing process-oriented systems, which serve in daily marketing operational activities such as direct mailing (database marketing), telemarketing and operational sales management. The users are middle management and operative sales and marketing personnel.

Scope # 5. Support Management and Decision Making:

Marketing information systems support management decision making. Management has five distinct functions and each of them needs support from MIS. These are planning, organising, co-ordinating, decision-making and controlling.

Scope # 6. Functional Integration:

MIS the co-ordination of activities within the marketing department and between marketing and other organisational functions like engineering, production, manufacturing, product management, finance, logistics, and customer service.

Marketing Information System – Characteristics

1. MIS is an ongoing process. It operates continuously.

2. MIS acts as a data bank and facilitates prompt decision-making by manager.

3. MIS operates in a rational and systematic manner and provides required information.

4. MIS is future-oriented. It anticipates and prevents problems as well as it solves marketing problems. It is both a preventive as well as curative process in marketing.

5. The gathered data is processed with the help of operations research techniques. Modem mathematical and statistical tools are available for problem-solving in the field of marketing.

6. MIS is a computer-based method of data collection, processing, and storage.

7. Management gets a steady flow of information on a regular basis — the right information, for the right people, at the right time and cost.

8. Marketing Information System stands between the marketing environment and marketing decision-makers. Marketing data flows from the environment to the marketing information system. Marketing data is processed by the system and converted into marketing information flow, which goes to the marketers for decision-making.

In the past, most decisions were made on the basis of reports prepared through manual labour. Today, managers, with the help of specialists, can employ sophisticated mathematical and statistical techniques, such as simulation, allocation models, PERT network, inventory models, and similar quantitative models to minimise the risks of doing business in a real-time MIS environment.

They can do this on the basis of up-to-date information recalled or retrieved from the computer’s database. Computer is now regarded as an indispensable ready reckoner for effective managerial decision-making. The introduction of computers has facilitated the setting up of Marketing Decision Support System (MDSS).

The System comprises collection, storage, analysis and reporting of marketing data. MIS is normally centralised, whereas MDSS is decentralised and allows marketing and sales managers to interact directly with the database.

The decision support system contains data on customers, market, competitor, economic, and social conditions and sales performance of the company. By making use of personal computers and software, the managers can independently retrieve data, analyse and interpret information and even create reports to meet individual requirements.

The decision support system has data from internal and external sources. Many companies move beyond database by creating large complex volume of data for its own use and use by clients. Example- Credit card companies have history of every individual transaction made by each card holder.

Marketing Information System – Importance: Anticipation of Consumer Demand, Complexity of Marketing, Significance of Economic Indicators and a Few Others

1. Anticipation of Consumer Demand:

Mass production and mass distribution in ever- expanding markets are based on anticipation of consumer demand. Under customer-oriented marketing approach, every marketer needs up-to-date knowledge about consumer needs and wants. In a dynamic economy, consumer tastes, fashions and liking are constantly changing.

Without precise information on the nature, character and size of consumer demand, marketers will be simply groping in the dark. Decisions based upon hunches, guess-work, intuition or tradition cannot give desirable results in the modern economy. They must be supported by facts and figures.

2. Complexity of Marketing:

Modern marketing process has become much more complex and elaborate. Ever-expanding markets and multinational marketing activities require adequate market intelligence service and organised information system.

3. Significance of Economic Indicators:

Forces of demand and supply are constantly changing. These determine prices and general market conditions. In a wider and complex economy, fluctuations in demand, supply and prices are tremendous. Marketer must have latest information on the changing trends of supply, demand, and prices.

For this purpose, he relies on the market reports and other market intelligence services. Economic indicators act as barometer indicating trend of prices and general economic conditions. Intelligent forecasting of the future is based on economic indices, such as national income, population, price, money flow, growth-rate, etc.

4. Significance of Competition:

Modern markets are competitive. A marketer cannot make decisions in a competitive vacuum. Modern business is a many-sided game in which rivals and opponents continuously try to formulate strategies to gain advantage over one another.

Predicting the behaviour of one’s competitors and overtaking of the competitor will need the services of marketing intelligence. A marketer cannot survive under keen competition without up-to-date market information, particularly regarding the nature, character, and size of competition to be met.

5. Development of Science and Technology:

Ever-expanding markets create conditions that lead to technological progress. The energy crisis since 1974 gave a great encouragement to discover other alternative sources of energy, i.e., atomic energy, solar energy, wind energy and so on. Modern marketer must be innovative.

‘Innovate or perish’ is the slogan in the existing marketing environment. Marketer must have latest information regarding technological developments. New products, new markets, new processes, new techniques are based on facts and figures.

6. Consumerism:

In an ever-widening market, we do have a communication gap between consumers, users, and marketers. This gap is responsible for unrealistic marketing plans and programmes. Many marketers are isolated from day-to-day marketing realities. This has led to consumer dissatisfaction.

Consumerism and increasing consumer grievances indicate that products do not match consumer needs and desires and marketers have no up-to-date knowledge of real and precise consumer demand. Many marketers have discovered that marketing agencies in charge of distribution do not offer expected services to their customers. Up-to-date Marketing Information System alone can establish proper two-way flow of information and understanding between producers and consumers in a wider market.

7. Marketing Planning:

We are living in the age of planning and programming. Our plans and programmes are based upon information supplied by economic research (economic forecasts) and marketing research (marketing forecasts), which provide the requisite information about the future economic and marketing conditions.

For instance, sales forecast is the base of production plan, marketing plan, financial plan, and budgets. Marketing information alone can inter-relate and co-ordinate the product and user/consumer demand so that both supply and demand can travel on the same wavelength.

8. Information Explosion:

We live in the midst of information explosion. Management has literally a flood of information knocking at its door. Computer is the most immediate force behind the information explosion.

The speed with which the computer can absorb, process, and reproduce large quantities of information is simply staggering. When a computer is effectively programmed, it can certainly add tremendously to the quality of information flow. As multinational companies’ troop in and competition turns fierce, the winner will be the one who satisfies customer needs most comprehensively through well-organised Marketing Information System.

Marketing Information System – Classification: Based on the End Use and on the Subject Matter of the Information

The information needs of the marketing job are large and diverse.

The information needs and can be classified in two ways:

i. Classification based on the end use (or purpose) of the information

ii. Classification based on the subject matter of the information,

i. Classification Based on End Use :

As per this method, marketing information can be classified into four groups as shown below:

a. Information for marketing planning.

b. Information for marketing operation.

c. Information for key decision in marketing.

d. Information for marketing control

ii. Classification Based on Subject Matter :

As per the second method of classification, marketing information can be classified on the basis of the content or subject matter of the information, as shown below:

a . Product

b. Consumer

c . Pricing

d. Distribution channels

e . Promotion

f. Sales force

g. Competition

h. Sales methods.

i. Interned operations of the firm.

j. External environment of the firm

Marketing Information System – Functions: Assembling of Marketing Data, Processing, Analyzing the Data, Storage, Retrieval, Evaluating Regarding Accuracy and a Few Others

The Marketing Information System performs six functions, viz.:

1. Assembling of marketing data.

2. Processing, i.e., editing, tabulating and summarizing the data.

3. Analyzing the data, i.e., filling out percentage, ratios, test of significance, etc.

4. Storage and retrieval, i.e., filing and indexing.

5. Evaluating regarding accuracy and reliability of data.

6. Dissemination or distribution of relevant and wanted information to decision makers.

All the above six functions can be brought down to three main stages, viz.:

1. Collection of market information.

2. Interpretation of information.

3. Dissemination of information.

1. Collection of Market Information:

The first stage of market intelligence function is gathering the information adequately, timely and relevant from the angle of marketers. Marketing executive gathers market information in many ways by tapping different sources of information collecting is the process of locating and tapping the sources of information.

The different sources of market information can be divided into:

i. Internal sources,

ii. External sources, and

iii. Market research.

i. Internal Sources of Information:

The internal sources of information are the records maintained by the marketing organization. They are financial records of sales, purchase, cash transactions, returns, etc. This information is helpful for the marketing executives to have sales analysis in terms of product, customer analysis and territorial analysis.

The internal sources are:

a. Product analysis – Product analysis is the study of actual position of different products. How they are received by the customers, its speed, i.e., slow or fast and causes of decline or rise over the past period.

b. Customer analysis – Customer analysis helps to get classified information by income, age group preference to a particular brand and price range. This helps the marketer to shift his operating ability to those areas where there is necessity of stress to better the performance.

c. Territorial analysis – Territorial analysis gives the break-up picture relating to an area. This helps to have a control over activities of sales forces (salesmen). Effort can be made to pad up (improve) the position in those areas where sales are declining and efforts can be made to maintain the market and extend the market in new areas.

ii. External Sources of Information:

The efficiency of a marketing firm can be judged not by comparing the internal records but by comparing the firm with others in the same line.

The external sources are:

a. Trade associations and chambers of commerce – Chambers of commerce and trade associations have their own publications. They may be monthlies or quarterlies. Even the regulated markets and cooperative societies have such useful publications.

b. Competitors – The best source perhaps is that provided by rivals. The success of a business is getting the secrets of other business. Business tactics or strategies followed by rivals have got to be mastered. Competitors never let their secrets out. A wise marketer has many ways of getting the required information via the employees.

c. Government publication – Different departments of Government of a Nation may be Central or State publishes up- to-date information. In India departments of agriculture, statistics, industries and commerce, foreign trade, etc., have been disseminating the vital data to marketers.

The examples are – RBI Bulletin, forward Market Bulletin, and Monthly Bulletin of Statistics, Planning Commission Reports, Reports of Export Promotion Councils, Census Reports and Indian Trade Journal, etc. The information given is up-to-date and authentic that helps the marketer to rely on such intelligence.

iii. Other Sources:

There are a number of concerns who have taken it as their business to provide information in the form of articles, reports, facts, opinions, criticisms, etc. The best examples of these kinds are – Eastern Economists, Capital, Southern Economists, Commerce, Yojana, Indian Finance, etc. Even the newspapers like Economic Times, Financial Express are taken into account. The University Departments, Colleges and Research Centres are the good sources of rich information.

2. Interpretation of Information:

Interpretation of information is the second stage of marketing information system. Collection of data is comparatively easier. However, interpretation is the crux of market information function. Interpretation of data refers to providing analysis of the information to arrive at certain generalizations.

Much depends on the dynamic thinking capacity or creative mind of the marketer to have correct generalizations or arriving at correct and logical conclusions. Decision-making is based on interpreting the critical appraisal of the given facts, opinion or estimates. That is why interpretation of data can be called as crucial yet delicate process of creativity.

3. Dissemination of Market Information:

Flow of information is as important as the flow of goods in the marketing system. Effective management of marketing information means not only systematic analysis but also providing or passing the information at different levels in the organization.

The marketing executive who has arrived at certain conclusions in respect of the problems faced must communicate to the men of action. There must be a combination of thinking and doing. Thinking has value only when doing is followed.

Marketing Information System – Dimensions

The information as well as information system could be understood in terms of the quality and quantity they possess. However, it is necessary to realise that the quantity and quality of information needed at various levels of management differs. Thus, it is important to give emphasis not only to generation, storage, and retrieval of the relevant information to fill in the existing gaps but attention should also be paid to elimination of irrelevant data.

The value of information, i.e., the benefits could be ascertained by the following:

(i) Accessibility- This refers to the ease and speed with which the particular information could be obtained. Faster and easier access will have more value as compared to difficult access.

(ii) Comprehensiveness- More complete the information in itself, more valuable it becomes. This attribute does not refer to the value of information but refers only to its usefulness.

(iii) Accuracy- The information, if free from any error, will have more value than otherwise.

(iv) Timeliness- It takes certain time to generate the information and the value of the information depends very much on how it is made available to the user manager.

(v) Authenticity- If the information is being generated from a formal information system it is authentic and could be measurable.

(vi) Free from Bias- The information, if free from any bias towards the pre-conceived conclusion, will have more value than otherwise.

Marketing Information System – Basic Properties: Purpose, Relevancy, Frequency, Rate, Deterministic, Cost, Value and Reliability

According to Murdick and Ross the basic properties of information are as follows:

I. Purpose:

Information must have purpose at the time of communication, otherwise, it is simply data or noise. The diversified purposes of information are to evaluate, inform, persuade or organise the facts and figures in creating new concepts, identifying problems, and controlling them.

II. Mode and Format:

The modes for communicating information are sensory (through sight, hearing, taste, touch and smell) but mainly visual and oral are used in business organisations. Sound recorders, gamma ray, quality control devices, tapes, cards, cathode-ray tube (CRT) are some forms of information communication.

III. Relevancy:

Relevance is the major criterion for information judgment. Information experts consider relevant data as information.

IV. Frequency:

The frequency of information for different areas varies according to operational need. The weekly financial reports will show little changes of small value in comparison to actual inventory reports.

The quantitative rate of information transmission must be ascertained in terms of time required. For instance, the time required for sales reports transmission from district office to head office is fixed weekly. Generally, low rate of transmission is found in human information system and high in telecommunication system.

VI. Deterministic:

Information concerning future must be certain for avoiding doubts and mistrust. The figures of inventory return on investment (ROI), sales are often calculated in a single value.

Cost is limiting factor for obtaining information. A small non-scientific sample for determining market potential costs for less than a probability sample survey. Even internal information from company accounting records may be extremely costly but to gather, store, process and retrieve it is essential. The marketing manager must constantly trade off the value of information against its cost.

VIII. Value:

Manager must evaluate the possible gain from the information or the possible loss from it absence. The measurement of the quantitative and qualitative value of informa­tion is a fertile area for a system designer.

IX. Reliability:

Reliability is the degree of confidence for the decision-making with the information aid. But to obtain very reliable information is an expensive task. Therefore, marketing manager must evaluate the task of information against its reliability cost.

Marketing Information System – Steps: Define the System, Source and Frequency Identification, Format of MIS and Implemetation

Steps # 1. define the system:.

The system for which design is to be made has to be defined; in terms of elements, the relationship and its boundaries. The system may be the complete organisation consisting of all functions or only one or several functions.

Steps # 2. Source and Frequency Identification:

Once the information needs have been assessed, the source of this information and the frequency of reporting have to be identified. The source could be both external and internal, whereas the frequency could be based on the occurrence of the event or by exception.

Steps # 3. Formats of MIS:

There are two formats which are very important, viz.-

(a) Research assessment sheet

(b) Marketing activity evaluation sheet

The research assessment sheet contains information like marketing decisions, parameters, frequency, source, and the format code. The marketing activity evaluation sheet will contain the items, relationship, standard, actual, variance, and reason. The first format is useful from the information point of view while the second format could be used for control.

Steps # 4. Implementation:

The steps needed for implementing the newly designed Marketing Information System could be-

(a) Prepare marketing research plan

(b) Train the research staff

(c) Prepare operating schedule

(d) Evaluate and modify the research system

Marketing Information System – Components: Internal, External Marketing Information and Marketing Research

There are three divisions or components of marketing infor­mation system:

1. Internal Marketing Information:

It is secured through accounting system. Data on sales, inventories, marketing costs, cash flows, accounts receivables and payables (credit sales and credit purchases), trading returns, financial returns, etc., constitute the information generated from within.

2. External Marketing Information:

It is in the form of marketing intelligence. It keeps marketers well informed about current marketing environment, changing consumer demand, chang­ing competition, changing prices, etc. Census data, newspapers, trade journals, magazines, trade shows and exhibitions, books, company annual reports, salesmen’s reports, suppliers, wholesalers, retailers and customers, special publications of trade associations, government reports, etc., provide valuable sources of market intelli­gence.

A marketer is interested in market intelligence because it is the only source of securing latest information about competition and customers. In a sense, marketing intelligence is an organised feedback process of marketing communication (inflow of infor­mation).

Salesmen act as ears and -eyes of the marketing firm in the market place. They are intelligence agents who can supply vital current information on buyer behaviour, channel behaviour and also on competitors.

There are professional market intelligence agencies who sell intelligence services to interested marketers.

Market intelligence data will have to be classified, edited, analysed and evaluated and distributed to the right people in the right form as early as possible. Many marketing decisions are based on market intelligence which acts as a mirror of marketing conditions reflecting faithfully how things are going on in the com­petitive market.

3. Marketing Research:

It is a systematic search for information. It involves data collection, analysis and interpretation. It exists primarily as a tool of managerial decision-making process: Marketing research is defined as the collection and analysis of data relevant to marketing decision-making and the communication of the results of this analysis to marketers. Of course, research cannot make decisions. It only helps experienced marketers in their task of decision-making.

It is a valuable instrument to keep a marketer always on the right path under competitive market pressures and to fulfill customer demand at a profit to the marketer. Please note that marketing research provides special information on request when a marketer has typical marketing problems demanding unique infor­mation for their satisfactory solutions.

MR studies are project- oriented. Mostly they involve special studies relating to market segmentation, buyer behaviour, product or brand preferences, pro­duct or brand usage, advertising and sales promotion, physical distribution, dealer behaviour, competition, etc.

Functions performed by Marketing Information System are:

1. Collection of marketing data, i.e., facts and figures,

2. Processing of data, i.e., editing, tabulating, and summarizing the data,

3. Analyzing the data, e.g., finding out percentages, ratios, averages, correlation, etc.,

4. Filing and storage,

5. Evaluating regarding accuracy and reliability of data,

6. presentation or distribution of relevant wanted information in the easily understandable form to managers or others.

Computer offers electronic data processing equipment—1. Model bank to assemble and process data, 2. Analytical bank in charge of analysis and evaluation, 3. Data bank to store and distribute.

Marketing information system stands between the marketing environment (market place) and marketers who take marketing decisions on product, prices, promotion and distribution or on marketing-mix. Marketing data flows from the market place (environment) to the marketing information system.

Marketing data is processed, (classified, edited, analyzed, interpreted) and presented in an easily understandable form to marketers for decision-making and formulating marketing plans and programmes.

Marketing Information System – Sources of Information

The information an organisation has about its market comes to it in a variety of ways, both formally and informally. All organisations have a fund of knowledge available both from the people who work for it and in the records accumulated over many years.

For example, when reading through a technical magazine someone could notice an article about developments at a competitor’s plant. Maybe this expansion is to allow for a new product or to improve efficiency. If this information is fed through to the right area it could be very useful.

Although some people might believe there can be a problem of an excess of such information, the most important issue is for all employees to know where to send such informal facts and leave it to a central department, usually marketing, to decide what to keep, what to check out properly, and what to ignore.

Unfortunately organisations rarely have complete knowledge about their markets, customers or competitors. At best it is like a mosaic or jigsaw, where the picture can still be clear, even though a large number of pieces may be missing. Sometimes it would be helpful to make efforts to acquire more information to make the picture even clearer.

However, it must be realised that information can cost money. It is only worth acquiring if the additional information would increase the chances of making a better marketing decision in the future. It must be remembered that marketing information does not replace decision taking – it is at best an aid to help take better decisions. Therefore the pur­pose and value of information gathering must be set against the cost of obtaining and processing that information.

Generally, the knowledge provided by marketing information changes over time. Thus, returning to our analogy of a mosaic, the colours of some pieces will fade over time. To revive the pattern, pieces must then be removed and replaced as new ones become available.

When information is used for marketing it must not be out of date as this could easily lead to bad decisions. Again, like the pieces used to make a mosaic, mar­keting information has to be obtained from many different sources and sometimes alternative sources can be used.

The sources of data could be divided as:

i. Undirected observation – Informal, unstructured collection of information from any source. It includes casual reading of magazines and newspapers, meetings with con­tacts, TV reports and many other chance events.

ii. Conditioned viewing – Formal searching but sometimes unstructured collection whereby a comprehensive search is made covering a specified range of publications. This is often done using an on-line database or a CD-ROM, but can be undertaken by setting up a specific department to scan every publication and to extract interesting articles to pass to the marketing manager.

iii. Informal searching – A structured way of capturing vital information such as a system of receiving sales force reports. The information might present itself in an informal way but the system to ensure it reaches the relevant managers must be structured.

iv. Formal searching – This is where formalised marketing research comes in. It is a specific study undertaken to fill in some of the gaps in the mosaic of information available. It involves the collation, analysis and presentation of appropriate, available and required data.

Research can be defined as the use of investigative techniques to discover non-trivial facts and insights which lead to an extension of knowledge.

There are well-established techniques for doing marketing research as a formal busi­ness activity and these are described in many specialist texts.

Marketing Information System – Marketing Information

We are, however, primarily interested in the marketing information that is required for the leather manufacturer to trade successfully. This might involve forecasts of future demand so that correct supplies can be ordered. It also includes knowledge of customers’ needs, and how those needs are likely to change in the future, and perhaps also informa­tion about other manufacturers who could be considered as competitors.

Marketing as a business activity has developed as a result of recognising that the suc­cess of an organisation depends upon creating and retaining customers. In the short term these decisions are likely to be concerned with meeting the needs of customers effi­ciently. In the longer term they are likely to focus more on the organisation’s need to respond to the ever-changing expectations of the users of its products and / or services.

Included within the category of marketing information are:

i. Market and environmental information

ii. Customer and potential customer information

iii. Competitor information

iv. Product, price, and other information about the offering

v. Distributor, and advertising and promotional information.

All of these are drawn from the different levels of the marketing environment and the behaviour of customers.

In fact we could define marketing information as any information which is relevant to, or affects, the profitable exchange of a product/service between an organisation and its customers.

Although marketing information can be either tangible or intangible there is often little evidence of tangible marketing information in many organisations. There might be some files containing, for instance, catalogues showing the products offered by competi­tors, but they are usually limited in comparison with the files needed by the production functions of an organisation.

Also these files are quite likely to be dispersed within an organisation. Some departments such as sales, design or advertising may have formal files, but in addition many managers are likely to have their own file labelled ‘Competition’ and containing catalogues collected at an exhibition or other similar event.

It is inevitable that marketing decisions often have to be made on the basis of incom­plete marketing information. In this respect marketing information is different from operational information as any gaps in the latter clearly affects the efficiency of produc­tion. However, marketing information is time-dependent. It is of no value when it is out of date and so it can then be discarded since there is no legal requirement to store it.

It is important that the requirement for adequate marketing information is recognised, since this is fundamental to the success of an enterprise.

It should be evident that, when required marketing informa­tion has to be obtained, this will inevitably involve an investment in time, financial capital, or both. For many organisations there is an important relationship in that the viability of many operational decisions depends upon having appropriate marketing information.

On another level the term ‘getting close to the customer’ is a very sophisticated opera­tion. Firms such as Grattan Mail Order in the UK, and several international airlines in the USA and other countries, have obtained a real competitive advantage by developing powerful customer information systems.

These are used both to better understand con­sumer needs, and also to support the development and marketing of new products. Grattan gather information on the personal characteristics and buying patterns of cus­tomers, as well as more general information on non-customers.

They use the information to send out sample mailings of offers to see who responds. They then use the analysis to identify other customers with similar characteristics for a more general and usually very successful marketing offer.

Marketing Information System – Categories: Marketing Environment, Customer, Competitor, Product, Distribution and Promotional Information

It is useful to classify marketing information in terms of the five main categories.

These respectively relate to:

i. The environment and market in which the product or service is produced, provided, supplied and used

ii. The target customers, clients, or users served by an organisation (and many other key stakeholders)

iv. The product or service being provided

v. How that product/service reaches and is communicated to the target customers.

i. The Marketing Environment:

Often, events which are likely to have an impact on an enterprise are seen, in the first instance, within the wider marketing or macro environment which comprises social, cultural, technological, economic, political and legal aspects. Alternatively, these factors could be studied as a first step in establishing which new markets are more attrac­tive than others.

In most countries there are numerous reports produced which forecast the macro environment. Some are expensive to obtain but often a summary is all that is necessary and this could be available in libraries or in the business/trade press. They are also available through computerised business data services such as McCarthy’s in the UK. It is, of course, important to understand the origins of any reports used, perhaps checking the information from more than one source. Nevertheless using commercial reports is the best way to monitor the wider environment.

A word of warning, however:

a. Many forecasts cover entire countries or industries and are not necessarily specific to the smaller sector or industry you may be studying.

b. Forecasts are based on historical data and specific assumptions, so they can have a wide margin for error.

c. Forecasts that conflict with ‘common sense’ should be carefully reviewed.

d. Forecasts will always be wrong.

The last warning is one of the ‘fundamental laws’ suggested by Flores and Whybark (1985) who also advise that –

We should not forecast things that don’t need to be forecast.

The average of several simple methods often works best.

There are many specialist textbooks which cover the analysis of the marketing environment. Some are basic economics texts, but more specialist marketing references can be found in Palmer and Worthington (1992).

Over the last fifteen years the use of scenarios has become more popular as a way of looking at the macro environment. A scenario is a qualitative description of the future and several different scenarios can be drawn up. There may be a ‘most likely’ scenario and perhaps a ‘worst case’ scenario of the future.

The use of scenarios was developed by the Royal Dutch Shell Company after the dramatic oil price movements in 1978. This technique has helped Shell and other organisations to study the likely effect of future plans in a number of different future situations.

ii. Customer Information :

Customer information is central to the concept of marketing. Many existing businesses, especially those providing services, have direct contact with the people who use their service. For instance, hairdressers can judge from this direct contact whether their clien­tele is getting older and more prosperous or older and less prosperous.

By consciously recognising such trends, hairdressers can maintain the future of their businesses either by ensuring that the service offered is changed to match the changing needs of the clien­tele or to attract another category of clientele. Customer information obtained through direct contact, although intangible, is likely to be the best available.

The management of larger organisations, even those who essentially provide services such as banks, can easily lose direct contact with their customers. To avoid this, man­agers need adequate tangible marketing information such as up-to-date customer satisfaction surveys. Without it, they will have no option but to make decisions based on the information, perhaps now out of date, they gained prior to becoming managers.

The problem is even worse for the manufacturers of products. Very often these are sold through wholesale and retail intermediaries which means that managers could be making decisions without having any contact with their final customers and users.

Customer information can be either qualitative or quantitative. Qualitative informa­tion might involve opinions or reasons for a particular action. This can be as valuable to the marketer as knowing a quantitative fact that, say, 8 out of 10 people buy a particular brand of cat food.

Information can be obtained as a one-off (ad hoc) study. It can also be tracked over a period of time, perhaps using a consumer panel to measure changes in behaviour.

iii. Competitor Information :

It is important to appreciate that the success of a product is dependent as much upon the alternatives available to a potential customer as upon the product itself. It is the appreciation of these alternatives and the impact that they are likely to have on the acceptability of a product to the potential customer which often requires specific marketing information.

Most successful organisations will continually update a competitor profile of all their direct competitors. This will include what those competitors are doing, what products they are offering, as well as when, why and how they are performing and any other rele­vant information.

It should again be stressed that marketing is related to the future activities of an organ­isation and therefore it is important to develop a feel for what competitors are likely to do in the future.

In his book managing for marketing excellence, Ian Chaston suggests:

Even in their analysis of existing competition, some marketers make insufficient use of information sources outside of standard market research studies. Marketers could learn a valuable lesson from the financial community on the benefits of studying annual accounts and shareholder reports as a basis for appraising the capabilities of companies.

Financial analysts also exploit other sources of information to gain a more complete pic­ture of the future prospects for a company. These include the perspectives of supplier /intermediaries, publicity releases, announcement of capital investment pro­grammes and recruitment advertising programmes. Given such a range of information it should be a danger signal to management if the marketing department only presents conclusions based on market share and customer surveys.

An interesting article under the heading ‘How to snoop on your competitors’ describes some highly questionable methods of obtaining information on competitors. It provides a real insight into the lengths to which some organisations go to get such data. Whether or not you approve of such practices they do go on, and they affect the whole image of marketing research.

The article less controversially also sug­gests that:

Competitive intelligence is a bits and pieces business much information you will find is inaccurate, irrelevant or stale and you must search hard to find golden nuggets. But, once you have 80% of the puzzle, you see things you didn’t see when you had 20%.

iv. Product/Services Information :

Marketing information on products or services cannot be isolated from customers or com­petitors. Specifications can be recorded but it is the degree to which the offering matches the future needs / wants of the customers which is of major importance to a marketer.

It may be that a research study could be undertaken in a blind (unbranded) situation, although the branded product has to be considered in the actual marketing decisions. Products can, of course, be assessed in direct comparative situations as it is how a prod­uct/ service offering is perceived alongside competitive offerings that gives the best indication of its acceptability.

Of course the indirect competition must not be forgotten, but this is much more difficult to forecast for the future. Generally issues of indirect com­petition require information to be acquired after some event such as the loss of sales. In this case it will be an attempt to explain the problem.

The development of the Sony Walkman as a new product, is an interesting example of a product which, at least for a time, affected the market for some apparently unrelated products. One example was the market for good quality pens. Both Walkmans and quality pens were similarly priced gift items for young people and were therefore competitors in the gift market.

Within this category of study will come the price of an offering. Price is very difficult to research when customers are not actually buying a product. However, actual prices of comparative products, and the differences between retail prices and trade prices, are matters of fact where information can be obtained.

v. Distribution and Promotional Information :

Since some products go through several intermediaries on their way to the final consumer, it is obviously important to learn as much as possible about the various middlemen. These intermediaries are cus­tomers of a supply organisation, but they also have a key role in the promotion of a product en route to the final consumer.

Decisions on distribution channels are critical to success, and once set up they require careful monitoring. This area of trade research is often carried out as part of a continuous study by major research agencies such as the A C Neilsen organisation.

The origins of marketing research are involved with advertising research. Perhaps because so much money is spent on consumer advertising this is still a key area of study. Most media have extensive information on readers/viewers. This allows careful targeting of marketing communications to any chosen segment.

The information is usually made available to all potential advertisers. The effectiveness of advertisements is also studied in detail with most advertising agencies having a good in-house research function.

Some quite strange devices are used in advertising research, for instance a pupilo-meter to study how the eye moves when reading an advert. However, the value of good research when studying promotional effort is well established. The drawback of promo­tional measures relates to the problem of cause and effect.

Measures such as awareness of product names and opportunities to see a particular advertisement are easily studied, but these cannot be directly related to sales. This is what prompted the now famous com­ment, sometimes attributed to Lord Leverhulme, ‘I know half my advertising is wasted, but I don’t know which half’.

Marketing Information System – Marketing Information and Analysis

In the marketing arena many different types of information can be obtained to assess the market, product performance, competitive situation and based on this information a strategic choice and a strategic direction can be made. But one has to be careful as to what extent the information is correct.

We must be mindful of what happened to Coca Cola in mid-eighties. Having spent several billions on research, ended up having to withdraw the product born out of that research and revert back to the old in a space of some three months as the market insisted upon it — consumerism. Consumerism in marketing parlance is defined as objections from the market against a company’s marketing programmes.

Much of attitude research is said to be imaginative as the respondents do one thing and say another depending on their audience— the researcher and their own mood. Some may not want to humble inordinately in the presence of the researcher or even be extravagant.

A clever Engineer built an effective mousetrap superior than its inexpensive already existing cousins. The newborn cost more than double and was priced likewise. After its successful launch where many housewives exercised their right to ‘curiosity purchase’ it never enjoyed repeat custom. This baffled the Engineer who ultimately learnt that housewives used the inexpensive mousetraps to catch mice and when they were caught both the trap and the mice were disposed to the dustbin.

The mousetrap in effect was a disposable. The mousetrap the Engineer designed didn’t come with a disposable price. If the Engineer had enough information of the behavioural pattern of housewives using mousetraps he would never have ventured out to make such an expensive one but alternatively used his engineering wisdom and skill to produce something cheaper than that in the market which could have also saved the housewives some money.

The moral of the above story demonstrates how important correct information is to marketing. The first thing the company must have is the right information of the external macro environment in which it operates and then the total market, its potential and existing customers and their buying behaviour, its collaborators and its competitors. It must thereafter be concerned about its own products & services, its sales, its market share, pricing, profitability and costs.

From available statistics the company can tabulate information in terms of sales volumes, growth, profit etc. It will also tell the company where it is and its own market share. Market share is one sure way to increase profitability—if a company can get more market share and make more sales to more people at the same overheads or at a marginal increase it is common sense that the profitability of that company will enhance.

Marketing information can be obtained from various resources and they are:

i. Desk Research – Information accessible from available internal company documents and other external records and publications, articles and advertisements.

ii. Marketing Intelligence – Collecting data from operational points through the company’s suppliers, its own sales force and marketing intermediaries about customers and competitors, its own products and those of competitors.

iii. Marketing Research – Marketing research can be defined as the total system of designing, collecting, analysing, tabulating and reporting of data relevant to a marketing issue through a company’s internal resources or delegated external specialists such as marketing research agencies.

iv. Marketing Decision Support System – MDSS is a process of collection of data, systems, tools and techniques with supporting software and hardware to gather and interpret information on business and the environment.

v. Marketing information – gathering system is an extensive subject, which needs to be addressed separately due to its specific, complex role and activities. However, some of the types of information needed to be ascertained and analysed will be helpful to decide on the priorities, strategy and tactics a company must adopt.

1. Environment Analysis.

2. Industry Attractiveness.

3. Product life Cycle.

4. Portfolio Analysis.

5. Value Chain.

6. Gap Analysis.

7. SWOT Analysis.

The above helps a business organisation to identify, the environment in which it operates, the performance of the industry it manages, the performance and profitability of brands it markets, the strengths, weaknesses, the opportunities and threats it may have to face.

Marketing Information System – Advantages and Disadvantages

Advantages of mis:.

1. Control Systems:

(a) Typical Applications:

(i) Control of marketing costs.

(ii) Diagnosis of poor performance.

(iii) Management of fashion goods.

(iv) Flexible promotion strategy.

(b) Benefits:

(i) More timely computer reports.

(ii) Flexible on-line retrieval of data.

(iii) Automatic spotting of problems and opportunities.

(iv) Cheaper, more detailed, and more frequent reports.

2. Research Systems:

(i) Advertising strategy.

(ii) Pricing strategy.

(iii) Evaluation of advertising expenditures.

(iv) Continuous experiments.

(i) Additional manipulation of data is possible when stored for computers in an unaggregated file.

(ii) Improved storage and retrieval capability allows new types of data to be collected and used.

(iii) Well-designed data banks permit integration and com­parison of different sets of data.

Disadvantages of MIS:

1. Expensive – Establishment of MIS is costly affair as it involves huge cost to be incurred on setting up of hardware and software for the required purpose.

2. Not Preferred – The database marketing has been primarily used as a tactical tool. There is a possibility that MIS lead to less reliable and less secure data. MIS system may become slow, large, and hard to manage.

3. Depends on Database – The database marketing depends on the data quality. While the observational data is powerful, the corrupted observational data could be ‘powerful misleading’. The quality also depends on the quality of analysis and the extent to which the databases are linked.

4. Requires New Set of Skills – The database often demands new skills and organisations from new analytical and decision-making skills in sales and marketing to a revamped information system organisation that could support the entirely new class of users.

Related Articles:

• Difference between Data and Information
• Break-Even Analysis: Introduction, Assumptions and Limitations
• Marketing Planning: Meaning, Scope, Importance, Elements & Barriers
• Elements of Marketing Mix – 4 P’s of Marketing Mix

Characteristics, Components, Process, Importance of Marketing Information System

Definition of marketing information system.

Marketing Information System is a system concerned with the management of marketing information to facilitate effective decision making. It is a management information system where data related to market is systematically gathered, stored, analyzed, interpreted and communicated to managers on a regular basis as per the requirements. This system conducts an effective analysis of market conditions for acquiring the required data needed for smooth functioning. It is a system which through proper arrangement of data ensures the continuous availability of reliable, relevant and timely information for taking proper market decisions. All marketing activities of organization such as packaging, pricing, promotion, media, distribution etc. are carried on with the support of this system. Data is collected from both internal and external sources, processed into required information using its various components and outcome is shared with all the decision makers within the organization.

Characteristics of Marketing information system

Computerized system, future oriented.

Marketing Information System is a future oriented process as it assists in decision making related to future activities of organization. All the information provided by this system helps managers in planning and strategy formulation related to future market activities.

Continuous System

Inter-related components.

Marketing Information System has four inter-related components that includes Internal reporting system, Marketing research system, Marketing intelligence system and Marketing Decision support system. All these components are inter-linked with one another in such a way that information provided by one component is used by another one for its functioning

Right and timely information

Easy accessibility.

Marketing Information system offer easy accessibility of marketing information to managers. All the database is stored and maintained on a computer system which can be viewed easily at any point of time.

Used by all levels

Consistent information, components of marketing information system, internal reporting system.

Internal Reporting System is the first component of Marketing information system which is a major source of information. Internal records maintain a complete database of all marketing operations taking place within the organization. These records consist of information related to sales and purchase, inventory level, account payables and receivables, cash flows, cost, research works and reports available within the organization. These internal records offer easy and fast accessibility of information to marketing managers. Companies for managing all aspects of their internal records appoints internal MIS committee.

Marketing Intelligence System

Marketing research system, marketing decision support system.

This component was earlier termed as Analytical Marketing System. This component is concerned with processing of data collected by above components for converting into useful marketing information. It comprises of various economic and mathematical tools such as time series analysis, linear programming, regression, statistics etc. These tools enable managers in analyzing the collected data that leads to better decision making.

Process of Marketing Information System

Deciding proper marketing metrics, acquiring required data, plotting data on graphs for proper analysis.

This process involves systematic plotting of gathered data on graphs. It facilitates manager in performing comparative analysis, interpretation and prediction of future activities.  

Sharing information with relevant departments

Planning best course of action, importance of marketing information system, facilitates decision making.

Marketing Information System is an efficient tool available with managers that facilitate decision making. It provides complete details regarding current market trends and environment which leads to proper strategic and operational decisions.

Systematic data recording

Fills up information gap, marketing planning.

Marketing information system enables organization in efficiently planning all its market operations. It assesses the current demands of market and prospective sales for formulating proper strategies and policies.

Saves cost and time

Proper evaluation and control, types of marketing decisions, strategic decisions.

Strategic Decisions are the decisions taken by the top level managers and influence the functioning of whole organization. These decisions include setting the targets of organization, designing structure and formulating policies. Ex- Decisions related to market acquisition and global marketing.  

Control Decisions.

Operational decisions, related posts:, add commercemates to your homescreen.

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First Steps to Success:

Learning the basics of marketing research.

Navigating the Whirlwind: Challenges in Marketing and Management

Imagine pouring your heart and soul into developing a new product, only for it not to be as well-received as expected. Or missing out on what consumers truly value, leading to product propositions that don’t align with market needs. Every day, those involved in marketing and management face new challenges, with the market ever changing.

Being unable to adapt to rapid market changes can leave you trailing behind the competitive market. These scenarios can occur in any company and might critically impact the future of the business and its brand reputation.

The Importance of Listening to the Market

So what should you do? What’s key is to attentively listen to the market and responding swiftly to changes. Taking market feedback seriously and basing swift and accurate decisions on such feedback can set a company on the path to success. 

The challenges faced by marketing and management professionals are far from trivial. But by accurately capturing market trends and employing strategic approaches, these hurdles can be overcome, paving the way to new opportunities.

The Case for Marketing Research

What exactly is marketing research.

Marketing research refers to the process of investigation and analysis to solve the challenges that may arise during a company’s marketing activities. This involves investigating and researching what’s happening in the market, what customers want and feel, and the strategies competitors are employing. 

By collecting data on market trends, consumer behavior, and customer feedback, businesses can analyze the current situation and make future predictions. This helps in developing more effective products and marketing strategies.

Benefits of Marketing Research

• Strengthening Strategic Decisions : Understand the realities of the market and base your strategies on solid data when planning.
• Minimizing Risks : Predict how the market will receive new products or services before they launch, thereby lowering the chance of failure.
• Enhancing Customer Satisfaction : By grasping customer needs and expectations, you can offer products and services that boost customer satisfaction.
• Establishing Competitive Advantage : Conducting a comparative analysis with competitors allows you to identify your strengths and secure a unique place in the market.

What would happen if decisions were made without conducting marketing research?

Scenarios like the following could occur:

• Discussions might be dominated by the most assertive individuals.
• Decisions could be made on incorrect assumptions, eventually leading to irreversible harm to the company
• There's a risk of not capturing the consumers' needs accurately.
• Decisions might solely be based on the judgment of those with expertise, which could lead to biased strategies that don't fully consider the diverse perspectives of the market.

To avoid such situations, marketing research plays a critical role. While it's not a guarantee, conducting thorough investigations and better understanding consumers can significantly increase the chances of creating a successful product.

How to Utilize Marketing Research: When to Grow Your Business

Marketing research is more than just data collection and analysis. It provides guidance for your business strategies to thrive and survive in a competitive market. Key moments when marketing research is invaluable include:

• Brand and Product Management: Enhancing customer satisfaction and loyalty to your brand.
• Launching New Products: Understanding the market’s true needs to create successful new offerings.
• Brand Communication: Developing effective messaging strategies to convey the allure of your brand.
• Entering New Markets: Assess the potential of uncharted markets to formulate successful entry strategies.

Clear Answers Provided by Marketing Research

Engaging in marketing research can help identify who needs your products the most, understand customer purchasing behavior, optimize pricing strategies, and much more. The answers you learn that way guide businesses towards informed decision-making, enabling them to establish a competitive edge in the market. Through this process, companies can build strong relationships with customers and achieve success in the marketplace.  

Harnessing Market Insights for Strategic Success

To achieve success in an ever-changing market, marketing research is indispensable. It helps grasp the reality of the market, supporting strategic decision-making. In our next article, we’ll delve into "Types and Scenarios of Marketing Research," further exploring how marketing research benefits different business scenarios. Having learned the basics in this article, the next installment will uncover specific marketing research methods to tackle business challenges.

Beginner's Guide to Successful Online Survey

INDEX: Articles

Chapter Objectives Structure of the Chapter The Functions of Management Managerial Roles Decision Making Components of a marketing information system Chapter Summary Key Terms Review Questions Chapter References

· An understanding of the different roles managers play and how marketing information systems can support them in these roles · An appreciation of the different types and levels of marketing decision making · A knowledge of the major components of a marketing information system · An awareness of the often under-utilised internal sources of information available to enterprises · An ability to clearly distinguish between marketing research and marketing intelligence, and · An understanding of the nature of analytical models within marketing information system.

1 Planning 2 Organising 3 Coordinating 4 Deciding 5 Controlling

· High volume, high speed work · Variety, fragmentation, brevity · Issue preference current, ad hoc, specific · Complex web of interactions, contacts · Strong preference for verbal media.

"A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control".

· Product type, size and pack type by territory · Product type, size and pack type by type of account · Product type, size and pack type by industry · Product type, size and pack type by customer · Average value and/or volume of sale by territory · Average value and/or volume of sale by type of account · Average value and/or volume of sale by industry · Average value and/or volume of sale by sales person

· Time series sales modes · Brand switching models · Linear programming · Elasticity models (price, incomes, demand, supply, etc.) · Regression and correlation models · Analysis of Variance (ANOVA) models · Sensitivity analysis · Discounted cash flow · Spreadsheet 'what if models

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Chapter 10: Gathering and Using Information: Marketing Research and Market Intelligence

10.1 Marketing Information Systems

Learning Objectives

• Describe the components of a marketing information system and each component’s purpose.
• Explain the situations in which marketing research should be used versus market intelligence.
• Describe the limitations of market intelligence and its ethical boundaries.
• Explain when marketing research should and should not be used.

A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that’s being gathered. When a sales representative records the shipping preferences of a customer in a firm’s customer relationship management (CRM) system, this is also marketing information that’s being collected. When a firm gets a customer complaint and records it, this too is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

Audio Clip: Joy Mead interview

Recall from Chapter 3 “Consumer Behavior: How People Make Buying Decisions” that Joy Mead is an associate director of marketing with Procter & Gamble. Listen to this clip to hear Mead talk about the research techniques and methods Procter & Gamble uses to develop consumer insight. You will learn that the company isn’t just interested in what consumers want now but also years in the future.

The trick is integrating all the information you collect so it can be used by as many people as possible in your organization to make good decisions. Unfortunately, in many organizations, information isn’t shared very well among departments. Even within departments, it can be a problem. For example, one group in a marketing department might research a problem related to a brand, uncover certain findings that would be useful to other brand managers, but never communicate them.

A marketing information system (MIS) is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to very sophisticated computer systems. Ideally, however, a marketing information system should include the following components:

• A system for recording internally generated data and reports
• A system for collecting market intelligence on an ongoing basis
• Marketing analytics software to help managers with their decision making
• A system for recording marketing research information

Internally Generated Data and Reports

As we explained, an organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. Firms are also constantly gathering information related to their Web sites, such as clickstream data. Clickstream data is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don’t buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions by virtue of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent (Baker, 2009). (That’s an interesting way to conduct marketing research, don’t you think?)

Being able to access clickstream data and other internally generated information quickly can give a company’s decision-makers a competitive edge. Remember our discussion in Chapter 9 “Using Supply Chains to Create Value for Customers” about how Walmart got a leg up on Target after 9/11? Walmart’s inventory information was updated by the minute (the retailer’s huge computing center rivals the Pentagon’s, incidentally); Target’s was only updated daily. When Walmart’s managers noticed American flags began selling rapidly immediately following the terrorist attacks on 9/11, the company quickly ordered as many flags as possible from various vendors—leaving none for Target.

Many companies make a certain amount of internal data available to their employees, managers, vendors, and trusted partners via intranets. An intranet looks like the Web and operates like it, but only an organization’s employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on her firm’s intranet for the information.

However, big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard. The information could be right under your nose and you might not know it. Meet people like Gary Pool: Pool works for BNSF Railway and is one of BNSF’s “go-to” employees when it comes to gathering marketing data. Pool knows how to access different databases and write computer programs to extract the right information from the right places at BNSF, a process known as data mining. Combining data into one location is called data warehousing, and makes Pool’s analysis easier. He then captures the information and displays it in dashboards, screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail.

Analytics Software

Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather all kinds of different information from a company’s databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” Oracle Corporation’s Crystal Ball is one brand of analytical software.

The camping, hunting, fishing, and hiking retailer Cabela’s has managed to refine its marketing efforts considerably using analytics software developed by the software maker SAS. “Our statisticians in the past spent 75 percent of their time just trying to manage data. Now they have more time for analyzing the data with SAS, and we have become more flexible in the marketplace,” says Corey Bergstrom, director of marketing research and analysis for Cabela’s. “That is just priceless” (Zarello, 2009).

The company uses the software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with Web browsing data to gain a better understanding of the individual customers marketing channel preferences as well as other marketing decisions. For example, does the customer prefer Cabela’s’ one-hundred-page catalogs or the seventeen-hundred-page catalogs? The software has helped Cabela’s employees understand these relationships and make high-impact data-driven marketing decisions (Zarello, 2009).

Market Intelligence

A good internal reporting system can tell a manager what happened inside his firm. But what about what’s going on outside the firm? What is the business environment like? Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? How will rising fuel prices and alternate energy sources affect your firm and your products? Do changes such as these present business obstacles or opportunities? Moreover, what are your competitors up to?

Not gathering market intelligence leaves a company vulnerable. Remember Encyclopedia Britannica, the market leader in print encyclopedia business for literally centuries? Encyclopedia Britannica didn’t see the digital age coming and nearly went out of business as a result. (Suffice it to say, you can now access Encyclopedia Britannica online.) By contrast, when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and early on locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. Meanwhile, Southwest Airlines managed to eke out a profit. Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research.

Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. In big companies, personnel in a firm’s marketing department are primarily responsible for their firm’s market intelligence and making sure it gets conveyed to decision makers. Some companies subscribe to news service companies that regularly provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. Other companies subscribe to mystery shopping services, companies that shop a client and/or competitors and report on service practices and service performance. Let’s now examine some of the sources of information you can look at to gather market intelligence.

Search Engines and Corporate Web Sites

An obvious way to gain market intelligence is by examining your competitors’ Web sites as well as doing basic searches with search engines like Google. If you want to find out what the press is writing about your company, your competitors, or any other topic you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts . Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of Web sites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar, and voilà! All the good (and bad) things people have remarked about the company or topic turn up. What a great way to seek out the shortcomings of your competitors. It’s also a good way to spot talent. For example, designers are using search engines like WhosTalkin.com to search the blogs of children and teens who are “fashion-forward” and then involve them in designing new products.

WhosTalkin.com and Radian6 (a similar company) also provide companies with sentiment analysis. Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. Some companies use sentiment analysis to determine how the market is reacting to a new product. The Centers for Disease Control (CDC) uses sentiment analysis to track the progress of flu; as people post or tweet how sick they are, the CDC can determine where the flu is increasing or decreasing.

Publications

The Economist , the Wall Street Journal , Forbes , Fortune , BusinessWeek , the McKinsey Report , Sales and Marketing Management , and the Financial Times are good publications to read to learn about general business trends. All of them discuss current trends, regulations, and consumer issues that are relevant for organizations doing business in the domestic and global marketplace. All of the publications are online as well, although you might have to pay a subscription fee to look at some of the content. If your firm is operating in a global market, you might be interested to know that some of these publications have Asian, European, and Middle Eastern editions.

Other publications provide information about marketplace trends and activities in specific industries. Consumer Goods and Technology provides information consumer packaged goods firms want to know. Likewise, Progressive Grocer provides information on issues important to grocery stores. Information Week provides information relevant to people and businesses working in the area of technology. World Trade provides information about issues relevant to organizations shipping and receiving goods from other countries. Innovation: America’s Journal of Technology Commercialization provides information about innovative products that are about to hit the marketplace.

Trade Shows and Associations

Trade shows are another way companies learn about what their competitors are doing. (If you are a marketing professional working a trade show for your company, you will want to visit all of your competitors’ booths and see what they have to offer relative to what you have to offer.) And, of course, every field has a trade association that collects and disseminates information about trends, breakthroughs, new technology, new processes, and challenges in that particular industry. The American Marketing Association, Food Marketing Institute, Outdoor Industry Association, Semiconductor Industry Association, Trade Promotion Management Association, and Travel Industry Association provide their member companies with a wealth of information and often deliver them daily updates on industry happenings via e-mail.

Salespeople

A company’s salespeople provide a vital source of market intelligence. Suppose one of your products is selling poorly. Will you initially look to newspapers and magazines to figure out why? Will you consult a trade association? Probably not. You will first want to talk to your firm’s salespeople to get their “take” on the problem.

Salespeople are the eyes and ears of their organizations. Perhaps more than anyone else, they know how products are faring in the marketplace, what the competition is doing, and what customers are looking for.

A system for recording this information is crucial, which explains why so many companies have invested in customer relationship management (CRM) systems. Some companies circulate lists so their employees have a better idea of the market intelligence they might be looking for. Textbook publishers are an example. They let their sales representatives know the types of books they want to publish and encourage their representatives to look for good potential textbook authors among the professors they sell to.

Suppliers and Industry Experts

Your suppliers can provide you with a wealth of information. Good suppliers know which companies are moving a lot of inventory. And oftentimes they have an idea why. In many instances, they will tell you, if the information you’re looking for is general enough so they don’t have to divulge any information that’s confidential or that would be unethical to reveal—an issue we’ll talk more about later in the book. Befriending an expert in your industry, along with business journalists and writers, can be helpful, too. Often these people are “in the know” because they get invited to review products (Gardner, 2009).

Lastly, when it comes to market intelligence don’t neglect observing how customers are behaving. They can provide many clues, some of which you will be challenged to respond to. For example, during the latest economic downturn, many wholesalers and retailers noticed consumers began buying smaller amounts of goods—just what they needed to get by during the week. Seeing this trend, and realizing that they couldn’t pass along higher costs to customers (because of, say, higher fuel prices), a number of consumer-goods manufacturers “shrank” their products slightly rather than raise prices. You have perhaps noticed that some of the products you buy got smaller—but not cheaper.

After reading this section, you now know what kind of information feeds into a Marketing Information System!

After identifying the incorrect answers, can you explain what they are used for?

Can Market Intelligence Be Taken Too Far?

Can market intelligence be taken too far? The answer is yes. In 2001, Procter & Gamble admitted it had engaged in “dumpster diving” by sifting through a competitors’ garbage to find out about its hair care products. Although the practice isn’t necessarily illegal, it cast P&G in a negative light. Likewise, British Airways received a lot of negative press in the 1990s after it came to light that the company had hacked into Virgin Atlantic Airways’ computer system. [1]

Gathering corporate information illegally or unethically is referred to as industrial espionage. Industrial espionage is not uncommon. Sometimes companies hire professional spies to gather information about their competitors and their trade secrets or even bug their phones. Former and current employees can also reveal a company’s trade secret either deliberately or unwittingly. Microsoft recently sued a former employee it believed had divulged trade secrets to its competitors. [2] It’s been reported that for years professional spies bugged Air France’s first-class seats to listen in on executives’ conversations (Anderson, 1995).

To learn more about the hazards of industrial espionage and how it’s done, check out this YouTube video.

Watch the video: Spying at Work – espionage, who, how, why, how to stop it. Ideas theft. Business Security Speaker (8 minutes)

To develop standards of conduct and create respect for marketing professionals who gather market intelligence, the Society of Competitive Intelligence Professionals has developed a code of ethics. It is as follows:

• To continually strive to increase the recognition and respect of the profession.
• To comply with all applicable laws, domestic and international.
• To accurately disclose all relevant information, including one’s identity and organization, prior to all interviews.
• To avoid conflicts of interest in fulfilling one’s duties.
• To provide honest and realistic recommendations and conclusions in the execution of one’s duties.
• To promote this code of ethics within one’s company, with third-party contractors and within the entire profession.
• To faithfully adhere to and abide by one’s company policies, objectives and guidelines. [3]

Marketing Research

Marketing research is what a company has to resort to if it can’t answer a question by using any of the types of information we have discussed so far—market intelligence, internal company data, or analytics software applied to data. As we have explained, marketing research is generally used to answer specific questions. The name you should give your new product is an example. Unless your company has previously done some specific research on product names—what consumers think of them, good or bad—you’re probably not going to find the answer to that question in your internal company data. Also, unlike internal data, which is generated on a regular basis, marketing research is not ongoing. Marketing research is done on an as-needed or project basis. If an organization decides that it needs to conduct marketing research, it can either conduct marketing research itself or hire a marketing research firm to do it.

So when exactly is marketing research needed? Keep in mind marketing research can be expensive. You therefore have to weigh the costs of the research against the benefits. What questions will the research answer, and will knowing the answer result in the firm earning or saving more money than the research costs?

Marketing research can also take time. If a quick decision is needed for a pressing problem, it might not be possible to do the research. Lastly, sometimes the answer is obvious, so there is no point in conducting the research. If one of your competitors comes up with a new offering and consumers are clamouring to get it, you certainly don’t need to undertake a research study to see if such a product would survive in the marketplace.

Alex J. Caffarini, the president and founder of the marketing research firm Analysights, believes there are a number of other reasons companies mistakenly do marketing research. Caffarini’s explanations (shown in parentheses) about why a company’s executives sometimes make bad decisions are somewhat humorous. Read through them:

• “We’ve always done this research .” (The research has taken on a life of its own; this particular project has continued for years and nobody questioned whether it was still relevant.)
• “Everyone’s doing this research .” (Their competitors are doing it, and they’re afraid they’ll lose competitive advantage if they don’t, yet no one asks what value the research is creating.)
• “The findings are nice to know .” (Great—spend a lot of money to create a wealth of useless information. If the information is nice to know, but you can’t do anything with it, you’re wasting money.)
• “If our strategy fails, having done the research will show that we made our best-educated guess .” (They’re covering their butts. If things go wrong, they can blame the findings, or the researcher.)
• “We need to study the problem thoroughly before we decide on a course of action .” (They’re afraid of making a tough decision. Conducting marketing research is a good way to delay the inevitable. In the meantime, the problem gets bigger, or the window of opportunity closes.)
• “The research will show that our latest ad campaign was effective .” (They’re using marketing research to justify past decisions. Rarely should marketing research be done after the fact) (Caffarini).

Is Marketing Research Always Correct?

To be sure, marketing research can help companies avoid making mistakes. Take Tim Hortons, a popular coffee chain in Canada, which has been expanding in the United States and internationally. Hortons recently opened some self-serve kiosks in Ireland, but the service was a flop. Why? Because cars in Ireland don’t have cup holders. Would marketing research have helped? Probably. So would a little bit of market intelligence. It would have been easy for an observer to see that trying to drive a car and hold a cup of hot coffee at the same time is difficult.

That said, we don’t want to leave you with the idea that marketing research is infallible. As we indicated at the beginning of the chapter, the process isn’t foolproof. In fact, marketing research studies have rejected a lot of good ideas. The idea for telephone answering machines was initially rejected following marketing research. So was the hit sitcom Seinfeld , a show that in 2002 TV Guide named the number-one television program of all time. Even the best companies, like Coca-Cola, have made mistakes in marketing research that have led to huge flops. In the next section of this chapter, we’ll discuss the steps related to conducting marketing research. As you will learn, many things can go wrong along the way that can affect the results of research and the conclusions drawn from it.

Key Takeaways

Many marketing problems and opportunities can be solved by gathering information from a company’s daily operations and analyzing it. Market intelligence involves gathering information on a regular, ongoing basis to stay in touch with what’s happening in the marketplace. Marketing research is what a company has to resort to if it can’t answer a question by using market intelligence, internal company data, or analytical software. Marketing research is not infallible, however.

Review Questions

• Why do companies gather market intelligence and conduct marketing research?
• What activities are part of market intelligence gathering?
• How do marketing professionals know if they have crossed a line in terms of gathering marketing intelligence?
• How does the time frame for conducting marketing intelligence differ from the time frame in which marketing research data is gathered?

Anderson, J., “Bugging Air France First Class,” Ellensburg Daily News , March 25, 1995, 3, http://news.google.com/newspapers?nid=860&dat =19950320&id=ddYPAAAAIBAJ&sjid=F48DAAAAIBAJ&pg=4554,2982160 (accessed December 12, 2009).

Baker, S., “The Web Knows What You Want,” BusinessWeek , July 24, 2009, http://www.businessweek.com/magazine/content/09_30/b4140048486880.htm (accessed September 13, 2021).

Caffarini, A. J., “Ten Costly Marketing Mistakes and How to Avoid Them,” Analysights, LLC.

Gardner, J., “Competitive Intelligence on a Shoestring,” Inc ., September 24, 2001, http://www.inc.com/articles/2001/09/23436.html (accessed December 14, 2009).

Nemes, J., “Dumpster Diving: From Garbage to Gold,” Greenbiz.com , January 16, 2009, http://www.businessgreen.com/bg/analysis/1805796/dumpster-diving-from-garbage-gold (accessed December 14, 2009).

Zarello, C., “Hunting for Gold in the Great Outdoors,” Retail Information Systems News , May 5, 2009, https://risnews.com/hunting-gold-great-outdoors (accessed September 13, 20201).

Media Attributions

• “ Metra BNSF Railway 149 ” by Michael Kappel is licensed under a CC BY-NC 2.0 licence.
• “ 299.365 :: Cabela’s ” by Echo9er is licensed under a CC BY-NC-ND 2.0 licence.
• S pying at Work – espionage, who, how, why, how to stop it. Ideas theft. Business Security Speaker video by Futurist Keynote Speaker Patrick Dixon is licensed under the Standard YouTube licence.
• “ dumpster_diving_leap ” by Halturg Skanser is licensed under a CC BY-NC 2.0 licence.
• “P&G Admits to Dumpster Diving,” PRWatch.org, August 31, 2001, http://www.prwatch.org/node/663 (accessed December 14, 2009). ↵
• “Microsoft Suit Alleges Ex-Worker Stole Trade Secrets,” CNET, January 30, 2009, http://news.cnet.com/8301-10805_3-10153616-75.html (accessed September 13, 2021). ↵
• “SCIP Code of Ethics for CI Professionals,” Society of Competitive Intelligence Professionals, http://www.scip.org/About/content.cfm?ItemNumber=578&navItemNumber=504 (accessed September 13, 2021). ↵

Principles of Marketing - H5P Edition Copyright © 2022 by [Author removed at request of original publisher] is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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