Marketing managers need vital and timely information to make key marketing decisions. The source of information lies in the marketing environment. There is an information assessment activity in the system that makes an appraisal on the type, quantity and quality of information needed by the marketing managers.
The three major methods of information development- internal records, marketing intelligence and marketing research interact with each other to collect the needed information. The information generated by these three tools are analyzed, synthesized and stored in the decision support system. The information is disseminated to the marketing managers for decision making.
The marketing information system should understand the information needs of the marketing managers. Marketing managers need a variety of information to take decisions at the time of planning, implementing, organizing and controlling the marketing program. There are four major components of the information system: the internal records system, marketing intelligence, research system and decision support system.
1. Internal Records System
Internal records are vital and easily accessible source of information. The records are gathered from sources located within the organization. The major internal records used by the marketing information system are customers' orders and complaints, invoices, sales reports, and marketing research reports.
i. Customers' orders and complaints
Customers' orders provide information on the demand for the organization's products in the market. When such orders are classified in terms of market segments and brands they provide valuable insights on sales potential of a particular brand in specific market segment. Customers' complaints contains information on the problems and possible solutions relating to product quality, packaging, distribution, price and promotion.
ii. Invoices
Invoices are major sources of information. The invoice contains valuable information on customer's name, location, product sold, sales quantity, price including discount and total sales value. The analysis of invoice can provide valuable information such as the areas of strength and weakness pf sales territories, to identify the products giving profits and losses and to identify customer and customer groups who order in large quantity.
iii. Sales reports
Sales reports are regularly submitted by the field sales staffs to the company. The sales report consists of two parts- the work plan and the call reports. The work plan is prepared by the sales person in advance and describes the intended sales call and routing. The call reports consists of a variety of information from the market place. It includes the target and actual sales per territory, total sales value generated by each salesperson and sales of individual product items. The sales reports are very useful in evaluating the trend, problems and prospects of each product item sold by the organization in every market segment. The effects of modification in marketing mix, such as price, packaging, advertising and distribution network can be easily evaluated on the basis of sales reports.
iv. Marketing research reports
Previous marketing research reports can be a valuable source of information on future problems and prospects for the organization in the market. Although marketing research projects are targeted at solving a particular marketing problem, the researchers often report on new developments, potential problems and opportunities in the market. Marketing research generates a variety of data and information that are stored in the marketing information system for future use.
2.Marketing Intelligence System
Marketing intelligence is the set of procedures and sources used to obtain everyday information about pertinent developments in the marketplace and marketing environment. Marketing intelligence gathering, also known as environment scanning is executed through informal as well as formal methods.
i. Informal or casual environment scanning
Marketing managers as well as personnel handling the marketing information system constantly engage in the informal environmental scanning activities. It involves the following activities:
- Reading newspapers, magazines and trade journals to collect new developments in the marketing environment, particularly in politics, economy and technology.
- Talking to customers, suppliers, channel members and other outside people to collect information on customer preferences, attitude toward the organization's and competitor's products and competitor's strategies.
- Talking to functional managers within the organization, particularly production, research and development and finance managers, to collect their viewpoints on the organization's problems and prospects.
ii.Formal environment scanning
Marketing information system has to design and implement a formal system of regular information flow from the market. Formal environmental scanning can be executed through a variety of methods as follows:
Sales personnel
The sales staff, particularly working close to the market are trained and motivated to spot and report back any new developments in the market place. The sales staff should be adequately rewarded for collection of vital information from the market.
Marketing channels
The marketing intermediaries, such as dealers, distributors, wholesalers, and retailers simultaneously handle several competitive products and are aware, to some extent, of the policies and strategies of the various organizations. They usually know in advance about the new product/brand launching, price changes and promotion schemes. it is not easy to get information about competitor's strategies from marketing intermediaries, however, with adequate incentive and public relations skill they can be motivated to pass on vital market information to the company.
Job openings
People working in other organizations are major sources of competitive information. It is difficult to collect intelligence information from competitor's staffs openly. However, the organization can advertise job openings in which many of the staffs working in competitive organizations also apply for the job. The marketing information system executive can collect vital intelligence information from the candidates about their present or past organizations during the course of interview.
Marketing Information Center
The marketing information system can organize and internal marketing information center, which secretly places its staff in competitor's organization. The identity of such staffs, popularly known as commercial spies, is kept as top-secret. These commercial spies collect vital inside information about competitor's policy, strategy and actions and report back to the organization.
3. Marketing Research System
Marketing research involves specific inquiries into specific marketing problems. It is basically problem oriented and based on systematic and careful planning and implementation. Marketing research specifies the information required, designs information collection methods, collects data, analyzes the results and communicates the findings and their implications to decision makers.
3. Marketing Research System
Marketing research involves specific inquiries into specific marketing problems. It is basically problem oriented and based on systematic and careful planning and implementation. Marketing research specifies the information required, designs information collection methods, collects data, analyzes the results and communicates the findings and their implications to decision makers.
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Importance Of Marketing Information System
4. Decision Support System
The decision support system does not collect any information. The system stores, analyzes and synthesizes the collected and stored information. This system has three components as follows:
i. Data bank
Data bank is the store house for all the collected information from internal reports, marketing intelligence and marketing research. The data is stored in such a manner that their retrieval is fast. Most marketing information system use computers for the data storage.
ii. Statistical bank
Statistical bank consists of various statistical analysis tools that help to classify and simplify the raw data for effective analysis. The analytical tools in the marketing information system consist of averages, percentages, measures of dispersion, cross tabulations and multivariate analysis tools such as regression, factor analysis, conjoint analysis etc.
iii. Model bank
Model bank consists of various models that facilitates decision making based on the analyzed and synthesized data. These models define the interrelationship between variables that help the decision makers to understand, predict and control the marketing problems.
4. Decision Support System
The decision support system does not collect any information. The system stores, analyzes and synthesizes the collected and stored information. This system has three components as follows:
i. Data bank
Data bank is the store house for all the collected information from internal reports, marketing intelligence and marketing research. The data is stored in such a manner that their retrieval is fast. Most marketing information system use computers for the data storage.
ii. Statistical bank
Statistical bank consists of various statistical analysis tools that help to classify and simplify the raw data for effective analysis. The analytical tools in the marketing information system consist of averages, percentages, measures of dispersion, cross tabulations and multivariate analysis tools such as regression, factor analysis, conjoint analysis etc.
iii. Model bank
Model bank consists of various models that facilitates decision making based on the analyzed and synthesized data. These models define the interrelationship between variables that help the decision makers to understand, predict and control the marketing problems.
