Marketing Information System Analysis - Report Example

A marketing information system (MIS) consists of people, equipment and procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers. (Kotler P) A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control. The parts of the Marketing information systems are: 1. Internal reporting systems. 2. Marketing research system. 3. Marketing intelligence system 4. Marketing models (en.allexperts.com) Internal Reporting system: Internal Reporting system was basically a byproduct of accounting in the past. It has the data or information of the company. This data can be categorized according to the nature e.g.; financial, production, manpower, marketing, stockholding and logistical data. Information from internal records is usually quicker and cheaper to get than information from other sources, but it also presents some problems. Because internal information was for other purposes, it may be incomplete or in the wrong form for making marketing decisions. (Kotler P) However, information of an enterprise helps to make correct decision by the managers. The entrepreneur, or various personnel working in the functional departments holding these pieces of data, does not see how it could help decision makers in other functional areas. The internal records which are of immediate value to the marketing department are orders entered, stockholdings and sales invoice. A lot of information can be derived from the each of the above. For example, below are the information obtained from the orders entered:    1. New customers details.    2. The number of products booked by various companies.    3.  Product type and pack type by territory, account, industry, customers.    4. Volume of order obtained by territory, account, industry and sales person. Marketing Research: Marketing research is the function which links the consumers to the organization through the information. Marketing research is a proactive search for information and is done for the below reasons: 1. To solve a specific marketing problem. 2. To continuously monitor the marketing environment. 3. Generate, refine, and evaluate the marketing actions. 4. Monitor the marketing performance and improve out understanding of the marketing as a process. The data are continuously collected from the consumers or distributors. (www.fao.org) Marketing researchers engage in a wide variety of activities, ranging from analyses of market potential and market shares to studies of customer satisfaction and purchase intentions. A company can conduct marketing research in its research department or have some or all of it done outside. Although most large companies have their own marketing research departments, they often use outside firms to do special research tasks or special studies. A company with no research department will have to buy the services of research firms. Many people think of marketing research as a lengthy, formal process carried out by large marketing companies. But many small businesses and non-profit organizations also use marketing research. Almost any organization can find informal, low-cost alternatives to the formal and complex marketing research techniques used by research experts in large firms.(Kotler P) Marketing intelligence system: A set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. (wiki.answers.com) Market intelligence (MI), according to Cornish, “the process of acquiring and analyzing information in order to understand the market (both existing and potential customers); to determine the current and future needs and preferences, attitudes and behavior of the market; and to assess changes in the business environment that may affect the size and nature of the market in the future.” (“Product”, 1997). MI’s main use is to identify successful new product developments early in the process to create company growth and maximize revenues by finding a balance between costs and prices of products. By using this knowledge about the external environment, companies can successfully innovate to stay ahead of the competition. Marketing intelligence comes from many sources. Much intelligence is from the companys executives, engineers and scientists, purchasing agents and the sales force. The company must train them to spot new developments and urge them to report to the company. The company must also ask the suppliers, resellers and customers to pass along important information. The company can take information about the competitors through the competitor’s annual reports, speeches, press releases, advertisements, business publications and trade shows.(Kotler P) Marketing Model: Marketing modeling is the use of statistical analysis such as multivariate regressions on sales and marketing time series data to estimate the impact of various promotional tactics on sales and then forecast the impact of future sets of promotional tactics.(wikipedia.org) Marketing models are done to minimize managements market-entry risk by providing preliminary estimates of the success of a new product idea. Useful models are needed early in the development process before making heavy expenditures. Models are needed to help the management recognize the differences between customers rather than treating all consumers alike. The model is set up using the sales volume/value as the dependent variable and independent variables created out of the various marketing efforts. The creation of variables for Marketing Mix Modeling is a complicated affair and is as much an art as it is a science. Once the variables are created, multiple iterations are carried out to create a model which explains the volume/value trends perfectly. Further validations are carried out, either by using a validation data, or by the consistency of the business results. Once the final model is ready, the results from it can be used to simulate marketing scenarios for a ‘What-if’ analysis. The marketing manager can reallocate this marketing budget in different proportions and see the direct impact on sales/value. He can optimize the budget by allocating spends to those activities which give the highest return on investment. (wikipedia.org) Examples of marketing models are: Time series sales modes · Brand switching models · Linear programming · Elasticity models (price, incomes, demand, supply, etc.) · Regression and correlation models · Analysis of Variance (ANOVA) models · Sensitivity analysis · Discounted cash flow · Spreadsheet what if models Thesis: In internal reporting system, by comparing the data from the sales order or invoice for example can find which is providing a acceptable level of customer service and the demand patterns. In marketing research system, the data are collected in a purposeful way to address of a well defined problem and to continuously monitor the environment. The marketing research is thus focused and these data are used by the managers to take important decisions. The marketing intelligence involves the management to take information formal and informal and take decisions accordingly. Marketing models are required appropriate for the products and competitive reactions in market. The output will be used to impact of the marketing elements on various dimensions. The contribution of each element as a percentage of the total plotted year on year is a good indicator of how the effectiveness of various elements changes over the years. The yearly change in contribution is also measure by a due-to analysis which shows what percentage of the change in total sales is attributable to each of the elements. It helps in optimizing the marketing budget by identifying the most and least efficient marketing activities. Conclusion: Marketing information systems are intended to support management decision making. Management has five distinct functions and each requires support from an MIS. These are: planning, organizing, coordinating, decisions and controlling. Information systems have to be designed to meet the way in which managers tend to work. Research suggests that a manager continually addresses a large variety of tasks and is able to spend relatively brief periods on each of these. Given the nature of the work, managers tend to rely upon information that is timely and verbal. Managers play at least three separate roles: interpersonal, informational and decisional. MIS, in electronic form or otherwise, can support these roles in varying degrees. Three levels of decision making can be distinguished from one another: strategic, control (or tactical) and operational. Again, MIS has to support each level. The marketing information system will support all the above needs with its four clear parts. I.e. Internal Reporting system, Marketing Research, Marketing intelligence system and Marketing Model. Customer market: Consumer markets consist of individuals and households that buy goods and services for personal consumption. (Kotler P) The study of customer market analyses its customers and markets. During the customer market study, the customer are divided based on their needs etc. organizations pay a careful attention to the needs of the customer. This enable companies to achieve leadership positions by serving specific customer groups and by addressing unique customer needs. By understanding the specific needs of customer segments, organizations can develop tailored product offerings, closely aligned relationships, and marketing programmers which serve customers who possess similar purchase criteria. (www.bpir.com) Thesis: To study the customer market, it has to be segmented. The markets are divided into meaningful and measurable segments, i.e. according to the needs or customers needs, past behaviors, value to the organization, or demographic profiles. The profit potential of each segment is determined by analyzing the revenue and cost impacts associated with serving the segments. Specific segments are targeted according to their profit potential and to the organisations ability to serve them in a beneficial and unique way. The performance of each segment is measured and the segmentation approach is adjusted progressively as market conditions change. Customer market study can lead to greater profits realisation. This can result through:     * Better understanding of the target market.     * Improved design of products and services which better fit the needs of the desired segment.     * Efficiencies gained through segmentation of customer needs.     * Gaining a reputation for expertise and quality in serving specific segments of the market.     * Enabling the most profitable customer groups to be given special attention thus improving loyalty and retention. Conclusion: Customer markets thus enables to better match customers needs and requirements. It enhances business profits by reaching untapped revenue streams. It enables growth opportunities. It helps to retain the customer as their needs, circumstances, and lifestyles change. It helps to achieve better communication through targeting a more relevant audience. Finally it helps to gain the market share by becoming a preferred supplier of a targeted market. Consumer Buying Behavior: Let us take an example as of purchasing an automobile. First of all you must have had some event which triggered you to look for a new automobile. Example, your friend is having that new model. Once this need has put you "on the market", you begin to ask your friends for recommendations regarding dealerships and car models. After visiting several dealerships, you test drive several models and finally decide on a particular model. After picking up your new car, you have doubts on the way home, wondering if you can afford the monthly payments, but then begin to wonder if instead you should have purchased a more expensive model. Over the next five years, the car has several unexpected breakdowns that lead you to want to purchase a different brand, but you have been very happy with the services of the local dealership and decide to again purchase your next car there. In this particular case, the following generic model of consumer decision making appears to hold the need recognition, information search, evaluation of alternatives, purchase decision and post purchase behavior (www.sykronix.com) References: 1. Kotler Philip,1999, Principles of Marketing, 2nd edition, published by Prentice Hall Inc, USA. 2. Leo,23.11.08,information system for managers,allexperts, available from , [17.02.08] 3. FAO, 1997, Marketing research and information system, available from [18.O2.08] 4. Unknown, 2009, What is Marketing Intelligence System, wikianswers,available from, [18.02.09] 5. Cornish, S. L. “Product Innovation and the Spatial Dynamics of Market Intelligence: Does Proximity to Markets Matter?” Economic Geography. Volume: 73, Issue 2 (April 1997), pp: 143-165. 6. Unknown, 2nd jan 09, Marketing mix modeling, wikipedia, available from , [19.02.09] 7.unknown, 2007, Customer Market Segmentation, bpir, available from, [19.02.09] 8.unknown,Personal selling: Consumer Buying Behavior, Dr. Robert Owen , available from,[10.02.08] By, Loyola Antony Mary Read More