role of marketing research in marketing information system

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

Marketing Information System, Marketing Information System : Importance in 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)

Marketing information System, 4 Pillars of Marketing Information System

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.

Marketing Information System, Implement a Marketing Information System

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

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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

An outdoorsman reading a Cabela's' catalog

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).

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Marketing Information System vs. Marketing Research: Understanding Data Strategies

In today’s fast-paced and data-driven business world, marketing information systems and marketing research play vital roles in helping companies make informed decisions and gain a competitive edge. However, these two terms are often used interchangeably, causing confusion among marketers. While both involve the collection and analysis of data, they differ in their focus and approach. To truly understand the difference between marketing information systems and marketing research, let’s dive deeper into their unique data strategies.

The Difference in Data Strategies: Understanding Marketing Information Systems

In essence, a marketing information system (MIS) is a systematic approach to gathering, organizing, and interpreting data to support marketing activities and decision-making. It serves as the backbone of a company’s marketing efforts by providing relevant and timely information to marketers. A marketing information system typically consists of four main components: internal records, marketing intelligence, marketing research, and marketing decision support systems.

Internal Records: Harnessing Internal Data

Internal records refer to data generated from within the organization, such as sales figures, customer databases, and inventory levels. These records provide valuable insights into customer behavior, purchase history, and market trends. By analyzing internal records, companies can identify patterns, understand consumer preferences, and tailor their marketing strategies accordingly. For example, a clothing retailer can use internal sales data to determine the popularity of different clothing styles and sizes, enabling them to optimize their inventory and better meet customer demands.

Marketing Intelligence: Traversing the External Landscape

Marketing intelligence involves gathering and analyzing data from external sources, such as industry reports, market surveys, and competitor analyses. It focuses on monitoring and understanding the broader market landscape, including industry trends, competitor strategies, and consumer preferences. By keeping a close eye on the competition and staying informed about market dynamics, companies can make informed decisions regarding product development, pricing, and promotional activities. For instance, a smartphone manufacturer can use marketing intelligence to identify emerging trends in the mobile industry and adjust their product offerings accordingly.

Marketing Research: Uncovering Customer Insights

Marketing research is a systematic process of collecting, analyzing, and interpreting data to understand consumer behavior, preferences, and perceptions. It involves conducting surveys, interviews, focus groups, and experiments to gather primary data directly from consumers. By conducting market research, companies can gain valuable insights into customer needs, evaluate the performance of their products or services, and identify opportunities for improvement. For example, a food delivery service can conduct research to understand consumer preferences regarding cuisine choices, delivery options, and pricing, enabling them to tailor their offerings and attract more customers.

Marketing Decision Support Systems: Enhancing Decision-Making

Marketing decision support systems (MDSS) aid marketers in making data-driven decisions by providing tools, models, and analytics to analyze and interpret data. These systems leverage advanced technologies, such as machine learning and predictive analytics, to generate insights and recommendations. By utilizing MDSS, companies can optimize their marketing strategies, allocate resources effectively, and make informed decisions to achieve their business objectives. For instance, an e-commerce platform can use a decision support system to analyze customer browsing patterns and recommend personalized product suggestions, thereby enhancing the shopping experience.

Understanding the Role of Marketing Research

While marketing research is a component of marketing information systems, it deserves a closer look due to its unique role in gathering customer insights. Marketing research involves a systematic and scientific approach to collecting, analyzing, and interpreting data to solve marketing problems and make informed decisions.

Quantitative Research: The Power of Numbers

Quantitative research involves the collection and analysis of numerical data, often through surveys or experiments, to uncover patterns and trends. It aims to measure, quantify, and generalize findings to a larger population. This type of research provides valuable statistical insights, enabling companies to make data-driven decisions. For example, a software company can conduct quantitative research to determine the satisfaction levels of its users by administering a survey with a Likert scale. The results can then be statistically analyzed to identify areas for improvement and measure the impact of changes implemented.

Qualitative Research: Uncovering Customer Narratives

In contrast, qualitative research focuses on understanding the underlying motivations, attitudes, and perceptions of individuals through methods like interviews, focus groups, and observations. It aims to capture rich and descriptive data rather than numerical measurements. Qualitative research provides deep insights into consumer behavior, allowing companies to understand the “why” behind customer actions. For instance, a cosmetic brand can conduct qualitative research to explore the reasons behind a particular group of consumers’ preferences for natural skincare products. Through in-depth interviews, the company can gain a better understanding of the underlying emotions and beliefs that drive their purchasing decisions.

Mixed Methods Research: A Holistic Approach

In some cases, marketers may adopt a mixed methods research approach, combining both quantitative and qualitative research methods to gain a comprehensive understanding of their target audience. This approach allows for triangulation, where multiple data sources and perspectives are used to validate findings and provide a more robust and nuanced understanding of consumer behavior. A mixed methods study could involve conducting a survey to gather quantitative data on consumer preferences, followed by in-depth interviews to explore the underlying reasons behind those preferences. This approach offers a holistic view of the market and enables marketers to gain a deeper understanding of complex consumer behaviors.

The Synergy between Marketing Information Systems and Marketing Research

While marketing information systems and marketing research have distinct characteristics, they are not mutually exclusive. In fact, they work in harmony and complement each other to enhance decision-making and marketing strategies.

Marketing information systems provide the infrastructure and tools necessary for collecting, organizing, and analyzing data. They leverage internal records, external market intelligence, and marketing research findings to generate valuable insights. These insights, in turn, inform marketing research initiatives by identifying knowledge gaps, research questions, and areas requiring further exploration.

On the other hand, marketing research plays a crucial role within the broader marketing information system. It provides primary data, consumer insights, and a deep understanding of customer behavior. These inputs enrich the information available within the marketing information system and serve as a springboard for decision-making.

In essence, marketing information systems inform marketing research, while marketing research feeds back into the marketing information system. This symbiotic relationship ensures that companies have accurate, up-to-date, and relevant data to support their strategic marketing decisions.

In the dynamic and data-driven world of marketing, understanding the difference between marketing information systems and marketing research is essential. While both involve data collection and analysis, they have distinct focuses and approaches.

Marketing information systems provide a holistic framework for gathering, organizing, and interpreting data, utilizing internal records, marketing intelligence, marketing research, and marketing decision support systems. These systems serve as the foundation of a company’s marketing efforts, enabling them to make informed decisions and optimize their strategies.

Marketing research, as a component of marketing information systems, focuses on understanding consumer behavior, preferences, and perceptions. It involves both quantitative and qualitative research methods to gather primary data directly from consumers. By uncovering customer insights, marketing research plays a vital role in guiding decision-making and shaping marketing strategies.

Understanding the synergy between marketing information systems and marketing research is crucial for marketers seeking to harness the power of data-driven decision-making. By leveraging the strengths of both approaches, companies can gain a competitive edge, better understand their target audience, and drive business growth.

So, the next time you come across the terms “marketing information system” and “marketing research,” remember the unique roles they play in helping businesses navigate the complex world of data and make strategic marketing decisions.

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10.1: Marketing Information Systems

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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.

Interview with Joy Mead

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

Recall from Chapter 3 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.

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

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 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: www.hulu.com/watch/103756/cnb...ls-the-new-age -of-walmart.

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

Market Intelligence

Search Engines and Corporate Web Sites

A screenshot of WhosTalkin's company search tool

Publications

Trade Shows and Associations

Salespeople

Suppliers and Industry Experts

Can Market Intelligence Be Taken Too Far?

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).

Video Clip: Spying at Work—Espionage: Who, How, Why, and How to Stop It. To learn more about the hazards of industrial espionage and how it’s done, check out this YouTube video. https://youtu.be/kooznkqQ1GQ

Two people dumpster diving in a parking lot

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

“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?

Key Takeaway

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, https://www.cnet.com/news/microsoft-suit-alleges-ex-worker-stole-trade-secrets/ (accessed December 14, 2009).

3 “SCIP Code of Ethics for CI Professionals,” Society of Competitive Intelligence Professionals, www.scip.org/About/content.cf...ItemNumber=504 (accessed December 14, 2009).

Anderson, J., “Bugging Air France First Class,” Ellensburg Daily News , March 25, 1995, 3, 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, https://www.bloomberg.com/news/articles/2009-07-16/the-web-knows-what-you-want (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).

Zarello, C., “Hunting for Gold in the Great Outdoors,” Retail Information Systems News , May 5, 2009, https://risnews.com/hunting-gold-great-outdoors (accessed December 14, 2009).

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

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Marketing Information System: Introduction, Importance, Components and Advantages

role of marketing research in marketing information system

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

(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.

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

The Strategic Role of Marketing Information Systems in Modern Business

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In spite of the fact that the traditional approach in marketing has become obsolete, it still seems to have great potential. Unique opportunities arise from the incredible development of information technology. Together with the information explosion this development has been instrumental in fuelling the growing interest in marketing information systems (MkIS). The greatest single application of IT within marketing is the database. Database marketing constitutes the complex process of ongoing, two-way communication with the customer, affecting significantly the whole business.

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Brown S. Life Begins at 40? Further Thoughts on Marketing’s Mid-life Crisis. Marketing Intelligence and Planning, 1995, vol. 13, #1

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Unold, J. (1999). The Strategic Role of Marketing Information Systems in Modern Business. In: Abramowicz, W., Orlowska, M.E. (eds) BIS ’99. Springer, London. https://doi.org/10.1007/978-1-4471-0875-7_9

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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.

Audio Clip: Joy Mead interview

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

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.

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

An man reading a Cabela's' catalog on a park bench.

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.

Publications

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

Salespeople

Suppliers and Industry Experts

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?

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 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 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.

“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?

Key Takeaways

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?

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).

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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COMMENTS

The Importance of Marketing Information and Research
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. Knowledge Is Power Against the Competition
PDF The Role of Marketing Research
The Role of Marketing Research CHAPTER 1 LEARNING OBJECTIVES After reading this chapter, you should be able to 1. Discuss the basic types and functions of marketing research. 2. Identify marketing research studies that can be used in making marketing decisions. 3. Discuss how marketing research has evolved since 1879. 4.
A Deep Dive into the Marketing Information System (MIS)
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.
10.1 Marketing Information Systems
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 ...
Marketing Research and Information
Abstract. This chapter explored the search for information about the customer and the market. This constitutes the listening part of the marketing dialogue. Marketing research is also needed to assist managers in the decision-making process and to analyze organizational performance. To be viable, however, the benefits derived from marketing ...
Guide to Marketing Information Systems and Why They Matter
A marketing information system, or an MIS, is a system for gathering, storing, analyzing and distributing valuable marketing data to help marketers make better decisions. The input of a marketing information system focuses on collecting relevant internal and external data to analyze and interpret. The output of a marketing information system ...
Marketing Information Systems: A New Dimension for Marketing Research
The application of the systems approach to marketing management promises to breathe new life into marketing research. In this article the authors present their views of the relationship between decision-information flows and the management process in marketing, and state the case for expanding traditional marketing research into "marketing information systems."
Marketing Research and Information Systems
The role of marketing research is to reduce uncertainty surrounding decisions facing management. Stair and Reynolds (1999) state that "there is a high degree of uncertainty with most executive decisions." ... It simply combines marketing research and information systems. In this rather complete IS model input data flow into the system from ...
Research-Based Guidelines for Marketing Information Systems
Marketing information systems (MKIS) are decision support systems focused on specific marketing decisions, providing a more efficient and effective framework for analyzing and identifying changes ...
PDF Marketing information systems
Marketing information systems 309 A systems approach to marketing management In the early 1960s the need for a programmed and systematic approach to marketing research led a number of practitioners and academicians to propose the concept of marketing intelligence as an alternative to the traditional view of marketing research.
Marketing Information System vs. Marketing Research: Understanding Data
In today's fast-paced and data-driven business world, marketing information systems and marketing research play vital roles in helping companies make informed decisions and gain a competitive edge. However, these two terms are often used interchangeably, causing confusion among marketers.
Understanding Marketing Information Systems from the Perspective of
Marketing information system is "a structured, interacting complex of persons, machines and procedures designed to generate an orderly flow of pertinent information collected from both intra- and extra-firm sources, for use as the bases for decision-making in specified responsibility areas of marketing management" (Brien and Stafford 1968).In other words, it is "a set of procedures and ...
10.1: Marketing Information Systems
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.
(PDF) A STUDY AND REVIEW OF MARKETING INFORMATION SYSTEM ...
Abstract. This study targeted highlighting the importance and also the importance of utilizing the Advertising and Marketing Information System (MKIS) on decision-making, along with defining the ...
The Importance of Marketing Information and Research
A marketing information system is a combination of people, technologies, and processes for managing marketing information, overseeing market research activities, ... 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 ...
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Marketing information systems play a key role in this. An effective marketing information system should have the ability to generate reports and insights that can be used by marketers to make data ...
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In the area of interpersonal roles, information systems are extremely limited and make only indirect contributions, acting largely as a communications aid in some of the newer office automation and communication-oriented applications. ... Marketing research systems: The general topic of marketing research has been the prime ' subject of the ...
PDF THE ROLE OF MARKETING INFORMATION SYSTEM IN DECISION ...
Marketing intelligence suggests a process, while marketing research is often concerned with techniques." 20 According to Stanton, "marketing intelligence is a system concept, whereas marketing
Marketing Information System: Introduction, Importance, Components and
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').
The Strategic Role of Marketing Information Systems in ...
Unique opportunities arise from the incredible development of information technology. Together with the information explosion this development has been instrumental in fuelling the growing interest in marketing information systems (MkIS). The greatest single application of IT within marketing is the database.
Table of Contents
The role and limitations of marketing research A definition of marketing research The purpose of the research Clear, concise, attainable, measurable and quantifiable objectives The need to set a time horizon for marketing research A reporting period The research proposal Step 1: Problem definition Step 2: Hypothesis generation
The Role of Marketing Information System in Decision Making: a
The development of marketing strategy requires both comprehensive analysis of internal and external environments and a synthesis of useful information (Mintzberg, 1994a) 3. It requires managers to ...
Determinants of blockchain technology adoption in small and medium
Thac Dang-Van c School of International Business-Marketing, University of Economics Ho Chi Minh City, Ho Chi Minh City, VietnamView further author information Ninh Nguyen e Graduate School of Business and Law, RMIT University, Melbourne, Australia;f Center of Science and Technology Research and Development, Thuongmai University, Hanoi, Vietnam ...
10.1 Marketing Information Systems
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.

A Deep Dive into the Marketing Information System (MIS)

Understanding the Marketing Information System (MIS)

Importance in the Modern Business Landscape

The Pillars of Marketing Information System (MIS)

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

Strategic Decision-Making

Forecasting

Problem-Solving

Advantages of Using a Marketing Information System

Implementing MIS: A Step-by-Step Guide

Potential Challenges of Implementing a Marketing Information System

Tips for Success while Implementing MIS

The Future of Marketing Information Systems (MIS)

Role of Artificial Intelligence in the Future of MIS

Role of Machine Learning in the Future of MIS

Role of Big Data in the Future of MIS

10.1 Marketing Information Systems

Internally Generated Data and Reports

Analytics Software

Market Intelligence

Search Engines and Corporate Web Sites

Publications

Trade Shows and Associations

Salespeople

Suppliers and Industry Experts

Can Market Intelligence Be Taken Too Far?

Marketing Research

Is Marketing Research Always Correct?

Key Takeaway

Review Questions

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Marketing Information System vs. Marketing Research: Understanding Data Strategies

The Difference in Data Strategies: Understanding Marketing Information Systems

Internal Records: Harnessing Internal Data

Marketing Intelligence: Traversing the External Landscape

Marketing Research: Uncovering Customer Insights

Marketing Decision Support Systems: Enhancing Decision-Making

Understanding the Role of Marketing Research

Quantitative Research: The Power of Numbers

Qualitative Research: Uncovering Customer Narratives

Mixed Methods Research: A Holistic Approach

The Synergy between Marketing Information Systems and Marketing Research

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10.1: Marketing Information Systems

Learning Objectives

Internally Generated Data and Reports

Analytics Software

Market Intelligence

Search Engines and Corporate Web Sites

Publications

Trade Shows and Associations

Salespeople

Suppliers and Industry Experts

Can Market Intelligence Be Taken Too Far?

Marketing Research

Is Marketing Research Always Correct?

Key Takeaway

Review Questions

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Practice Question

Marketing Information System: Introduction, Importance, Components and Advantages

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

Marketing Information System

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