Managing Marketing Information - Research Paper Example

Managing Marketing Information Introduction A company needs to gather information regarding the market behavior before taking any market decisions. The consumers and the producers are said to be important assets of the market whose behavior affects the firm’s decision making process (Doolin, 2004). The success of an organization in the decision making process depends on the accuracy of the available marketing information from various sources. The organizations therefore try to determine the nature of the market structure as well as try to gather information regarding the prices of goods set by the competitors and the products manufactured by them. The paper would discuss regarding the marketing information system and its orientations (Dhillon and Backhouse, 2000). The marketing information system plays an active role in raising the efficiency of the organization by providing them with valuable information. The marketing information system is necessary for the market management for identification, estimating and predicting the marketing opportunities apart from analyzing the market domains and hence it is also known as management information system (Kim, Cavusgil and Calantone, 2006). The marketing information helps the managers in their decision making process such that they can take appropriate decisions for the future growth prospect of the organization. The paper aims at discussing the efficiency of the tools of marketing information system and the state of equilibrium that can be attained in the marketing process. It provides the researcher with a scope to understand the importance of marketing information in a company’s decision making process. Thesis Statement To analyze the importance of the marketing information in marketing manager’s decision making process and the nature of advantages and disadvantages of Marketing Information Tools (MIS) tools. Pros and cons of each MIS tools Marketing Information System is the most important tool used by many organizations in order to make executive decisions at various levels. By using these tools, the organization is able to analyze their databases comprising of the facts and figures and after analyzing the databases, reports are prepared by the managers regarding the organizational performance (Jasperson, Carter and Zmud, 2005). These are various MIS tools and techniques that can be used by the companies to carry out their analysis. The nature of tools used in the MIS system is as follows: Transaction Processing System (TPS) The most important tool under MIS is that of the transaction processing system using which the company records all recurring as well as the daily business transactions. The transactions within an organization involve orders for the raw materials, inventory management and transactions of the customers and the annual sales of the company (Kim, Cavusgil and Calantone, 2006). The companies record the data which is further used to analyze the trends of the organizational performance. For example, if the demand for the products manufactured by the company increases, it indicates that the company is performing well in the international markets. The company can handle the excess demand by raising the level of production (Hess, Rubin and West, 2004). However, the disadvantage of this tool is that in case there is an error in recording the data and then it would be difficult to carry out the further analysis. Operating Information System (OIS) This tool is used by the company to plan for carrying out the production process and the level of inventory and the raw materials to be held by the company. The decision regarding the production of the final product is taken by the managers of the organization (Doolin, 2004). However, the managers need to be efficient enough to conduct the decision making process because the decision taken by the managers has an impact on the reputation of the organization in the international market. Decision Support System (DSS) This tool makes an extensive use of computing tools as well as the mathematical and scientific tools for carrying out a detailed analysis. The tool can be used to supervise the functions of various departments within an organization that is the sales, production, finance and marketing (Doolin, 2004). The company finally chooses the department that saves the cost, time and human efforts. Nonetheless, it involves a complicated process to carry out the entire analysis on various departments of the organization (Ritchie and Ritchie, 2002). State of Equilibrium in Marketing There are two important components of the market that is the demand of the consumers and the supply by the producers. The demand and the supply are interrelated and when the demand matches the supply the stage is known as the state of equilibrium. The demand for an individual is affected by the price of the product, consumer’s income, price of substitute as well as the complimentary goods, the tastes and preference patterns of the consumer and the expectations of the consumer regarding future prices (Kim, Cavusgil and Calantone, 2006). The factors determine the amount of product that the individual is willing to purchase and this is the amount that is demanded by the customers. However, there are other factors that determine the amount of product that the producer is willing to supply. The factors that affect the supply conditions are the price of the product set by the producer, the wages that the firm pays to the workers, the cost of capital used in the production and the producer’s expectations for the future prices (Leonidou and Theodosiou, 2004). The state equilibrium is said to arise in the economy when the quantity demanded by the consumers is met by the quantity supplied by the producers (Kim, Cavusgil and Calantone, 2006). Figure 1 : Diagram showing the euilibrium position in the market (Source: Jasperson, Carter and Zmud, 2005) There are two types of equilibrium conditions that exist in the market that is the stable as well as the unstable equilibrium. The equilibrium is said to be stable if in case the economy deviates from the state of equilibrium and again returns back to the position (Jasperson, Carter and Zmud, 2005). However, the unstable equilibrium occurs in the market when the economy does not return to the equilibrium position after a deviation occurs. The demand and supply conditions in the market mainly depend on the producers and the consumers and these can be depicted by the demand and supply curves. The intersection point of the demand and supply curves is known as the equilibrium point. The change in the demand and the supply conditions also shifts the demand and supply curves and the economy reaches a new equilibrium position. Use of the MIS tools in determining the equilibrium in the market The management system within the organization uses various tools and techniques in order to achieve the phase of equilibrium in the market. With the help of MIS tools, the company manages the database containing various figures related to the net production as well as the annual sales of the company (Jasperson, Carter and Zmud, 2005). For example, the transaction processing system helps the company to gather data regarding the demand of the customers and the managers of the company makes the production decisions accordingly. Further, the operating information system also contributes to the decision making process of the managers. On the contrary, the company can use the decision support system to carry out the analysis on various departments of the organization with the help of computers (Shaw, et al., 2001). Based on the analysis carried out by the marketing managers of the organization, decision is taken regarding the production levels and the prices that are to be set for the goods manufactured by the company. It also helps the managers to decide the amount of products to be supplied in the market and the products that are to be stored in the inventory for future consumption. The tools also help in estimating the amount of raw materials needed for the production (Li, McLeod and Rogers, 2001). Based on the demand conditions, the company makes an appropriate decision regarding the level of production such that there is no situation for excess demand in the market. Thus by producing according to the demand for the products and supplying the goods in the international market as per the demand of the consumers, the economy reaches an equilibrium state where quantity demanded is equal to the quantity supplied in the market (Kelle and Akbulut, 2005). Conclusion The research has been carried out on the tools of the management information system that are used by the companies to evaluate their databases and prepare an annual report regarding the production and sales of the company. The marketing information is essential for a company to predict its future growth prospect and the strategies that the company can undertake to enhance its performance in the international markets. There are various types of MIS tools that the company can use to estimate the amount of production, the raw materials that are required for production and the amount of goods that are to be supplied in the market despite storing some products in the inventory for future consumption. The overall analysis helps the company to set its future goals for market expansion and it can plan out strategies and adopt new technology to overcome the challenges of competing with the rivals. The production levels of a company are affected by the demand of the customers and if the company produces according to their demand, the market arrives at a situation where the quantity demanded by the customers is fulfilled by the quantity supplied by the production and the market is at equilibrium. Thus, the MIS tools play an active role in determining the equilibrium condition in the economy. Reference List Dhillon, G., and Backhouse, J. 2000. Technical opinion: Information system security management in the new millennium. Communications of the ACM, 43(7), pp. 125-128. Doolin, B. 2004. Power and resistance in the implementation of a medical management information system. Information Systems Journal, 14(4), pp. 343-362. Hess, R. L., Rubin, R. S. and West, L. A., 2004. Geographic information systems as a marketing information system technology. Decision Support Systems, 38(2), pp. 197-212. Jasperson, J. S., Carter, P. E., and Zmud, R. W. 2005. A comprehensive conceptualization of post-adoptive behaviors associated with information technology enabled work systems. Mis Quarterly, 29(3), pp. 525-557. Kelle, P. and Akbulut, A., 2005. The role of ERP tools in supply chain information sharing, cooperation, and cost optimization. International Journal of Production Economics, 93, pp.41-52. Kim, D., Cavusgil, S. T., and Calantone, R. J. 2006. Information system innovations and supply chain management: channel relationships and firm performance. Journal of the Academy of Marketing Science, 34(1), pp. 40-54. Leonidou, L. C. and Theodosiou, M., 2004. The export marketing information system: an integration of the extant knowledge. Journal of World Business, 39(1), pp. 12-36. Li, E. Y., McLeod, R. and Rogers, J. C., 2001. Marketing information systems in Fortune 500 companies: a longitudinal analysis of 1980, 1990, and 2000. Information & Management, 38(5), pp. 307-322. Ritchie, R. J. and Ritchie, J. B., 2002. A framework for an industry supported destination marketing information system. Tourism Management, 23(5), pp. 439-454. Shaw, M. J., Subramaniam, C., Tan, G. W. and Welge, M. E., 2001. Knowledge management and data mining for marketing. Decision support systems, 31(1), pp. 127-137. Read More