Potential Uses of MIS in Making Sound Marketing Decisions - Essay Example

? Full Topic: Potential Uses of MIS in Making Sound Marketing Decisions Introduction In general terms Marketing Information System (MIS) is “a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis that is used operationally, managerially, and strategically for several aspects of marketing” (Oluwabamidele, 2011). Researches relating to MIS are highly diverse and the conceptual approaches seems loosely structured due to the lack of previous theory on the subject, difficulty in conceptualizing the relevant constructs and the tendency to tackle only a few dimensions of the subject matter (Leonidou, and Theodosiou, 2004). However the previous research studies suggest that following avenues of the firms’ decisions in relation to its market operations are typically addressed in modern-day MIS; (1) the background factors (2) the actual information processing behavior and (3) the role of information activities in shaping the firm’s competitive advantage. Therefore it is clear that MIS address all the avenues of decision making in marketing. Current study attempts to compile the characteristics of the information processing involved in making sound marketing decisions and the specific advantageous of using MIS. Steps involved in information processing which is aimed at formulating sound marketing decisions are illustrated and the performances of modern-day MIS are evaluated in terms of the advantageous and scope for development. Marketing is a well structured subject area which contains clear conceptual frameworks and a substantial amount of empirical case studies which utilize the subject theory. It is defined as “a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others” (Kotler, and Armstrong, 2010). Information plays a vital role in making sound marketing decisions. Marketing Information Systems are important to; (1) understand the behavior of the major actors in the marketplace where the firm intends to operate (2) understand the external business environment which involves monitoring the changes in market conditions and anticipating market competition from new domestic and international firms entering into market and intensifying competition from the existing firms (3) design reliable marketing plans, considering the advantages and disadvantages of alternatives marketing strategies (4) find effective solutions to specific problems such as what is the best approach for launching a new product and what are the suitable product promotion strategies and (5) improve the overall performance of the organization by better controlling, monitoring and implementing marketing strategies which in turn increase the efficiency and the effectiveness of firms’ marketing division (Churchill, 2001; & Leonidou, and Theodosiou, 2004). Basic characteristics of MIS 1) The Background Factors Incorporated in MIS The background factors which can influence the marketing decisions include characteristics of the firm and the manager, government policies and consumer preferences and income levels. Previous researches which are aimed at exploring the background factors indicate that organizations with innovative cultures are more likely to seek information and appreciate its usefulness in making marketing decisions. Experience, level of education, cognitive styles and decision-making levels determine the manager’s information-processing style. Organizations which are not hierarchical in structure and decision making process is rather decentralized obtain more advantageous from MIS compared to those organizations which are highly formalized (Menon & Varadarajan, 1992). Moreover, the volatility in the external marketing environment also increases the degree of usefulness of MIS to marketing managers. Market volatility increases the supply and demand uncertainty which in turn increases the amount of information required for decision making process. Therefore the decision making process in highly volatile environments involve rather diverse information and complex processing techniques. Moreover, the internal tax regime and international trade barriers such as tariffs, licensing, quality standards and other regulations are decisive factors in marketing of goods and services in the domestic and world markets (Menon & Varadarajan, 1992). There are also government policies that can influence the income levels which in turn can change the consumer preferences. It has been observed that background factors described above also act in interaction rather than in isolation when shaping the marketing decisions. Example, the congruence between manager’s information-processing style and the level of marketplace turbulence determines the performance of a firm. 2) Processing of Marketing Information in Organizations Information processing ideally involves determination, acquisition, dissemination, and utilization the information (Day, 1994; & Moorman, 1995). These steps can be illustrated as follows. Managers first conceptualize specific problems and identify what information is required to solve these problems. Correctly defining the problem and identifying the manager’s information requirement is important because omitting important types of information and requesting unnecessary information increase the firms’ marketing cost. Moreover, Leonidou, and Theodosiou, 2004, reported that following factors are decisive on information processing by the organizations; “(1) availability that is, can the information needed to support a specific decision be made available in due time? (2) cost versus benefit that is, is the cost of obtaining the specific information higher than the benefit that the firm will ultimately enjoy? (3) time that is, how urgent is it to provide a solution to a marketing problem for which information is required? (d) uncertainty that is, how does the diversity or volatility of the business environment of the target market affect the life-span of information? and (e) cost of error that is, what will be the consequences of a wrong decision made without sufficient information?” (15). Determination and acquisition of data are closely related. Marketing information sources are categorized as primary data which is obtained from market research surveys and secondary data which is obtained from industry statistics or formal and informal sources (Athanassiou & Nigh, 2000). Dissemination of marketing information within the marketing department and the organization is vital for obtaining participation from various managers in the decision making process which in turn increase the efficiency and effectiveness of the solutions. Formal reports, handouts, presentations, group discussions as well as informal i.e. interpersonal conversations play an important role in information dissemination in organizations. However the degree to which information is diffused among the employees may depend on the utilities of the particular information. Leonidou, and Theodosiou, 2004, also categorize the flow of information as; “(a) top-down, that is from people at higher levels to people at lower levels in the organizational hierarchy; (b) bottom-up, that is, from subordinates to superiors and continuing up the organization hierarchy; (c) horizontal, that is, among people at the same or similar organizational levels; and (d) diagonal, that is, among persons at different levels who have no direct reporting relationships with one another” (16). Actual utilities of information to the organizations can be categorized into three groups (Leonidou, and Theodosiou, 2004) namely, “(a) instrumental, that is, the direct application of information to solve a specific marketing-related problem; (b) conceptual, that is the indirect application of information to broaden the managerial knowledge base without serving any specific project; or (c) symbolic, that is the distortion of information to support the decision maker’s opinion against others, or justify a decision already taken (16). Menon & Varadarajan, 1992, also stated that extent to which specific information is used in above three forms are largely determined by the marketing mangers’ perceived usefulness. 3) Marketing Performances and Information-Processing From the point of view of the marketing managers the importance of information as suggested by Leonidou, and Theodosiou, 2004, states “information is a “strategic resource (like human, technological, or financial resources) that enables the organization to strengthen its market-sensing capabilities and achieve a positional advantage over its competitors in the marketplace” (16). Jalilvand et al. 2012, indicate that information source plays an important role in consumer preferences in tourism industry. Accordingly, web based marketing tools positively influence the destination image, tourist attitude and travel intention. Moreover, the efficiency of MIS can be increased and cost of information processing can be decreased by switching into Information Technologies. However the novelties in information processing have created new challenges to the marketing managers. Broad challenges faced by the modern-day marketing managers include; low predictability of the market forces, disseminating useful data and securing the sensitive data while operating in the internet, improving the organizational culture and the vision of the organization to all the employees are operating from geographically dispersed locations and addressing all the business functions aimed at offering superior customer value (Coyne, 1986; Zikmund, 2000). Furthermore, it is evident that cloud computing and network architecture can reduce the information processing cost to the firms. New advancements in IT can be used to address all the information processing activities conducted by the modern-day marketing managers. Current MIS contains sever lapses relating to the operational flexibility and information security. Conclusions Broad definition that is, “a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis that is used operationally, managerially, and strategically for several aspects of marketing” suggests all the managerial activities pertaining to marketing can be addresses via MIS. It also incorporates information technologies. Research literature suggest that individual mangers’ characteristics such as the amount of experience, degrees of knowledge, cognitive styles, and decision-making levels influence marketing decisions (Menon & Varadarajan, 1992). However appropriate software programs and automated systems can vastly reduce the impact of individual managers’ differences in marketing. Moreover, cloud infrastructure and software architecture have the potential to significantly reduce the marketing cost of firms. However, the security of the information that is stored in the public clouds has been compromised in many times in the history. Therefore in my opinion MIS is an under developed subject area. There is vast untapped potential to improve the MIS tools and currently its full economic benefits are not experienced by the organizations. References Athanassiou, N., and Nigh, D., 2000. “Internationalization, tacit knowledge and the top management teams of MNCs.” Journal of International Business Studies, 31(3), p. 471–487. Churchill, G. A., 2001. Basic marketing research. U.S.A.: Harcourt College Publishers. Coyne, K. P., 1986.” Sustainable competitive advantage—what it is, what it isn’t.” Business Horizons, 29, p. 54–61. Day, G. S. , 1994. “The capabilities of market-driven organizations.” Journal of Marketing, 58, p. 37–52. Jalilvand M. R. Samiei N. 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