Market Information System (MIS) | Components of Market Information System
1. Marketing Information
System (MIS)
2. Characteristics/Features
of Marketing Information System (MIS)
3. Importance of Marketing
Information System (MIS)
4. Components of Marketing Information System
An MIS has four components:
a) an internal records system, which includes customer-related records, sales-related records, and other reports.
b) a marketing intelligence system, a set of procedures and sources used by managers to obtain everyday information about pertinent developments in the marketing environment.
c) a marketing research system that allows for the systematic design, collecting, analysis, and reporting of data and findings relevant to a specific marketing situation; and
d) a marketing decision support system that helps managers interpret relevant information and turn it into a basis for marketing action. They are explained below:
Fig.:- Components of
Marketing Information System
1. Internal record system
The internal record system is an important component of MkIS,
which provides information that is related to the organization internally.
Inside records help marketing managers to gain faster access to reliable
information. Marketing managers get lots of information from the internal
records of the company. The organization regularly receives reports on sales,
inventory, customer orders, cash flows, accounts receivable, payable and
complaints, etc. which contains valuable market information on the problems and
possible solutions. The major records used by the MkIS are as follow:
a. Customer related records:
It includes customers' orders, invoices, and customer complaints.
The customers' orders provide information on the demand for the organization's
product in the market and the sales potential of a particular brand in a
specific market segment. Meanwhile, customers' complaint contains information
on the problem and possible solution relating to product quality, packaging,
distribution, price, and promotion. Similarly, invoices provide valuable
information like the strength and weaknesses of sale territories, identify the
products giving profit and losses, and identify the customer groups who
order in large quantities.
b. Sales related records:
Report submitted by salesforce provides information about the
performance of brands, sales trends, problems, and prospects of each product
item sold by the organization in every market segment. The effect of
modification in the marketing mix can be evaluated based on the sales
report.
c. Other reports:
Internal records consist of reports such as financial statements,
audit reports, annual reports, and inventory level records. They are important
sources of information. This report shows the condition of the organization in
the market. It provides the detailed strength and weaknesses of the
organization.
2. Marketing intelligence system
A marketing intelligence system is also known as environmental
scanning. It is a set of procedures and sources used by marketing
decision-makers to obtain day-to-day information about competitors,
developments in the marketplace, and changing marketing environment. It
generates information on day-to-day market activities that occur inside and
outside the organization. A marketing intelligence system is established with
the motive to track the competitors' actions. It also predicts opportunities
and threats in the market to improve strategic decision-making.
A
marketing intelligence system is executed through formal as well as informal
methods.
a. Formal environment scanning involves the following activities:
- Training and motivating the sales force
to spot and report back any new development in the marketplace.
- Motivating distributors/dealers,
wholesalers, retailers, and other marketing intermediaries to pass on
vital market information to the company.
- Purchasing market information from
external agencies.
b. Internal Marketing Information Center, which secretly
places its staff in competitors' organizations to collect vital information
about competitors' policies, strategies, and actions.
- Interacting with qualified people and
employees from other organizations via job openings and interviews.
c. Informal environment scanning involves the following
activities:
- Interaction with customers, suppliers,
channel members, and other stakeholders on pros and cons, their
preferences, and attitude towards the product.
- Information from newspapers, magazines, and trade journals about changes in the environment.
- Informal talk with managers and personnel
of the organization and several departments.
3. Marketing research system
A marketing research system is a systematic design, collection
analysis, and reporting of information to a specific marketing situation faced
by an organization. Market research is conducted to solve specific marketing
problems of the company. It collects data ab0Ut the problem. This data is
tabulated, analyzed and conclusions are drawn, Then the recommendations are
given for solving the problem.
It is a mechanism established to conduct a systematic
investigation to solve special market-related problems. It is used in every
phase of the company's market program. However, this information is specific. It can be used only for a particular purpose. It is basically
problem-oriented and based on systematic and careful planning and
implementation.
The purpose of marketing
research:
- To provide reliable and sufficient
information that helps the business executive to take appropriate action,
- To provide important customer feedback to
the firm and to understand the dynamics of the marketplace.
4. Decision support system
A decision support system is a procedure that allows a manager to
interact with data and methods of analysis to gather, analyze and interpret
information. This system does not collect information. This system just stores
analyzes and synthesizes the collected and stored information. This system
designs a decision model by applying statistical, mathematical, and managerial
tools to the information gathered by the internal record system, marketing
intelligence system, and market research system. It is also known as an
analytical system since it analyzes the problems. This is the tool that helps
marketing managers to analyze data and to make better marketing decisions.
There are many software programs, which help the marketing manager with
segmentation, price-fixing, advertising budgets, etc.
This system has three
components:
a. Data Bank:
It stores and secures the data and information collected by
internal record systems, marketing intelligence systems, and market research systems by using several tools such as record management, filing, modern
technological tools, etc. The data is stored in a systematic manner that
facilitates easy and smooth access to the data.
b. Method banks (statistical bank:
It analyzes the data stored in the data bank. It consists of
various statistical analysis tools that help to classify and simplify the raw data
for effective analysis. The general tools used in the decision support system
are averages, percentages, measures of dispersion, cross-tabulations,
regression, factor analysis, cluster analysis, conjoint analysis, etc.
c. Model Bank:
Model banks provide the pre-visual of any problems. It helps to
understand, predict and control the problems. The model bank consists of models
that facilitate the analysis and synthesis of data. Models define the
interrelationship between different variables that help the decision-makers to
understand, predict, and control the marketing problems and provide appropriate
solutions.
Statistical Tools
1. Multiple regression:
A statistical technique for estimating a 'best fitting"
equation showing how the value of a dependent variable varies with changing
values in several independent variables. Example: A company can estimate
how unit sales are influenced by changes in the level of company advertising
expenditures, sales force size, and price.
2, Discriminant analysis:
A statistical technique for classifying an object or person into
two or more categories. Example: A large retail chain store can determine the
variables that discriminate between successful and unsuccessful store
locations.
3. Factor analysis:
A statistical technique is used to determine the few underlying
dimensions Of a larger set of infer-correlated variables. Example: A broadcast
network can reduce a large set of TV programs down to a small set of basic
program types.
4. Cluster analysis:
A technique Of statistics uses for separating objects into the
specified number of mutually exclusive groups such that the groups are
relatively homogeneous. Example: A marketing researcher might want to classify
a set of cities into four distinct groups.
5. Conjoint analysis:
A technique of statistics whereby respondents' ranked preferences
for different offers is decomposed to determine the person's inferred utility
function for each attribute and the relative importance of each attribute. For
example, an airline can determine the total utility delivered by different
combinations of passenger services.
6. Multidimensional scaling:
A variety of techniques for producing perceptual maps of
competitive products or brands. Objects are represented as points in a
multidimensional space of attributes where their distance from one another is a
measure of dissimilarity. Example: A computer manufacturer wants to see where
its brand is positioned among competitive brands.
Models
1. Markov-process model:
This model shows the probability of moving from a current state to
any future state. Example: A branded packaged-goods manufacturer can determine
the period-to-period switching and staying rates for their brand and, if the
probabilities are stable, the brand's ultimate brand share.
2. Queuing model:
This model shows the waiting times and queue lengths that can be
expected in any system, given the arrival and service times and the number of
service channels. Example: A supermarket can use the model to predict queue
lengths at different times of the day given the number of service channels and
service speed.
3. New-product pretest model:
This model involves estimating functional relations between buyer
states of awareness, trial, and repurchase based on consumer preferences and
actions in a pretest situation of the marketing offer and campaign. Among the
well-known models are ASSESSOR, COMP, DEMON, NEWS, and PRINTER.
4. Sales-response model:
This is a set of models that estimate functional relations between
one or more marketing variables- such as sales force size, advertising
expenditure, sales promotion expenditure, and so forth - and the resulting
demand level.
Optimization Routines
1. Differential calculus:
This technique allows finding the maximum or minimum value along
with a well-behaved function.
2. Mathematical programming:
This technique allows finding the vales that would optimize some
objective function that is subject to a set of constraints.
3. Statistical decision theory:
This technique allows determining the course of action that
produces the maximum expected value.
4. Game theory:
This technique allows determining the course of action that will
minimize the decision maker's maximum loss in the face of the uncertain
behavior of one or more competitors.
5. Heuristics:
This involves using a set of rules of thumb that shorten the time
or work required to find a reasonably good solution in a complex system.
