Beruflich Dokumente
Kultur Dokumente
Unit 4 Understanding the Marketing Information Systems (MIS)
Structure
4.1 Introduction
4.2 Characteristics of MIS
4.3 Benefits of MIS
4.4 Types of Marketing Information
4.5 Components of MIS
4.6 Marketing Research
4.7 Features of Marketing
4.8 Objectives of Marketing
4.9 Marketing Research Process
4.10 Importance of Marketing Research
4.11 Advantages and Limitations of Marketing Research
4.12 Summary
Terminal Questions
Answers to SAQs and TQs.
4.1. Introduction
In the earlier chapter, we saw how marketing environment is changing and presenting new
opportunities and threats to an organization. The main responsibility for identifying significant
changes in the market place falls on the marketing department. They are better placed and have
advantages in undertaking this task because they are regularly interacting with customers and
observing competition.
The Marketing Departments need to develop Marketing Information Systems that provide them
information about buyer wants, preferences, behavior and also about competition. They are able to
do this by setting up systems and marketing related research methods to collect this valuable
information which is ultimately used to help make marketing decisions.
Sikkim Manipal University 53
Marketing Management Unit 4
A Marketing Information System is a set of procedures to collect, analyze and distribute accurate,
prompt and appropriate information to different levels of marketing decision makers.
Learning Objectives
After studying this unit, you will be able to:
1. Understand the concept of Marketing Information System, as well as its characteristics &
benefits.
2. Outline different components of a Marketing Information system and classify different types of
Marketing Information that are being used.
3. Understand role and scope of Marketing Research in making Marketing decisions.
4. Define the objectives of a typical marketing research study
5. Outline and explain the steps involved in Marketing Research process
6. Understand the importance of marketing research
7. Explain the advantages and limitations of the marketing research function.
4.2. Characteristics of MIS
Philip Kotler defines MIS as “a system that consists of people, equipment and procedures to gather,
sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision
makers.
Its characteristics are as follows:
1. It is a planned system developed to facilitate smooth and continuous flow of information.
2. It provides pertinent information, collected from sources both internal and external to the
company, for use as the basis of marketing decision making.
3. It provides right information at the right time to the right person.
A well designed MIS serves as a company’s nerve centre, continuously monitoring the market
environment both inside and outside the organization. In the process, it collects lot of data and stores
in the form of a database which is maintained in an organized manner. Marketers classify and
analyze this data from the database as needed.
Sikkim Manipal University 54
Marketing Management Unit 4
With the advent of Computer Technology, MIS has taken a step further to provide managers direct
access to the databases. This system called Marketing Decision Support System (MDSS) links a
decision maker to relevant databases and analysis tools, thereby allowing him to gain deep insights
into needs and trends of customers with the help of sophisticated statistical analysis.
Today companies organize the information in databases such as customer database, product
database, and field sales database and combine them to be stored in a huge database called Data
Warehouse. The process of searching through information in data warehouse to identify meaningful
patterns that guide decision making is called Data Mining.
4.3. Benefits of MIS
Various benefits of having a MIS and resultant flow of marketing information are given below:
1. It allows marketing managers to carry out their analysis, planning implementation and control
responsibilities more effectively.
2. It ensures effective tapping of marketing opportunities and enables the company to develop
effective safeguard against emerging marketing threats.
3. It provides marketing intelligence to the firm and helps in early spotting of changing trends.
4. It helps the firm adapt its products and services to the needs and tastes of the customers.
5. By providing quality marketing information to the decision maker, MIS helps in improving the
quality of decision making.
4.4. Types of Marketing Information
A Marketing Information System supplies three types of information.
1. Recurrent Information is the data that MIS supplies periodically at a weekly, monthly, quarterly,
or annual interval. This includes data such as sales, Market Share, sales call reports, inventory
levels, payables, and receivables etc. which are made available regularly. Information on
customer awareness of company’s brands, advertising campaigns and similar data on close
competitors can also be provided.
2. Monitoring Information is the data obtained from regular scanning of certain sources such as
trade journals and other publications. Here relevant data from external environment is captured to
Sikkim Manipal University 55
Marketing Management Unit 4
monitor changes and trends related to marketing situation. Data about competitors can also be
part of this category. Some of these data can be purchased at a price from commercial sources
such as Market Research agencies or from Government sources.
3. Problem related or customized information is developed in response to some specific
requirement related to a marketing problem or any particular data requested by a manager.
Primary Data or Secondary Data (or both) are collected through survey Research in response to
specific need. For example, if the company has developed a new product, the marketing
manager may want to find out the opinion of the target customers before launching the product in
the market. Such data is generated by conducting a market research study with adequate sample
size, and the findings obtained are used to help decide whether the product is accepted and can
be launched.
4.5. Components of MIS
The following diagram shows a typical Marketing Information System with its components. Which
are?
1. Internal Records System
2. Marketing Intelligence System
3. Marketing Research System
4. Analytical Marketing System
Sikkim Manipal University 56
Marketing Management Unit 4
Fig 4.1 The Marketing Information System
Marketing Marketing
Marketing Information System
Information Information
Internal Marketing
Marketing Environment Marketing Managers
reports research
system system
Target markets Analysis
Marketing channels Planning
Competitors Publics Marketing Analytical Implementation
Macro environment Intelligence marketing Control
forces system system
Marketing decisions and Communications
Source: Phillip Kotler, Marketing Managemnet: Analysis, Planning, and Control,
5 th ed. (Englewood Cliffs, N.J.: PrenticeHall, 1984), p. 189
Internal Records System
This includes information on (i) Order to payment cycle and (ii) sales information systems.
Order to payment cycle has a system which records, the timing and size of orders placed by
consumers, the payment cycle followed by consumers and the time taken to fulfill the orders, in the
shortest possible time. Customers place order through sales people and companies dispatch the
goods and receive payments directly or through bank. A proper record system pertaining to order –
to – payment cycle management helps mangers to decide on production and dispatch schedule,
inventory and accounts receivable schedule and also logistics and distribution management
schedules,
Sikkim Manipal University 57
Marketing Management Unit 4
Sales Information Systems record everything in the sales Department, starting from Sales Call
Reports to prospects history to Sales territory and quota information for better sales planning and
forecasting purpose.
Marketing Intelligence System
This is a set of procedures and sources used by managers to obtain everyday information about
developments in the marketing environment. This system supplies ‘happenings’ data unlike Internal
Records System which supplies ‘results’ data. Marketing managers collect data from published
sources like books, magazines and journals; by talking to customers, intermediaries and sales
personnel. Some companies appoint specialists to gather consumer and competitor information, who
does mystery shopping to monitor the performance of their own or competitor’s dealers. Competitor
information can also be obtained by buying their product, attending their press conferences, trade
shows and reading their annual reports. Companies purchase commercial information from outside
suppliers and market research agencies like IMRB, ORG – MARG to obtain competitive data on their
sales, advertising expenditures etc., besides their own.
Marketing Research System
This is the third component of MIS. Marketing Research provides information to marketing manager
when he/she encounters marketing problems. This may involve conducting Marketing Research
survey by collecting primary data. These surveys may be conducted by the marketing department
itself or a it can hire services of an external marketing research agency.
Analytical Marketing Systems
Also known as Marketing Decision Support systems (MDSS), this is a coordinate collection of data,
systems, tools and techniques with supporting software and hardware by which an organization
gathers and interprets relevant information from business and environment and turns it into a basis
for marketing action. All the data which is generated through the other three systems described
above are stored in a data base. The storage and retrieval capability of decision support system
allows the collection and use of a wide variety of data throughout the company. Senior managers can
access the data base and continually and monitor sales, markets, performance of the sales people
and other marketing systems as well.
Sikkim Manipal University 58
Marketing Management Unit 4
Self Assessment Questions 1
1. A Marketing Information System (MIS) caters to the needs of ______________
2. MIS enables a company to develop effective ______________ against emerging marketing
threats.
3. Recurrent Information is the data that MIS supplies _______________
4. ____________ Information is developed and provided in response to any specific data requested
by a marketing manager.
5. In Marketing Decision support systems, the manger is provided direct access to
_______________
4.6. Marketing Research
Earlier we saw that Marketing Research is an important component of the Marketing Information
System. Marketers need to acquire good understanding of their own markets to monitor the changing
environment. They need information to assess their own past performance as well as to prepare
future marketing plans. Hence they require timely and accurate information on their consumers and
competitors as well as on the performance of their products. In today’s highly competitive and
complex environment consumer needs are changing at a fast pace. Hence decision making is very
challenging.
Marketing Research performs the task of collecting, recording and analyzing relevant data. Thus, it
has emerged as one of the important activities of the marketing function.
American Marketing Association (AMA) defines Marketing Research as –
Definition: Marketing Research is the function which links the consumer, customers and public to
the marketer through information – information used to identify and define marketing opportunities
and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and
improve understanding of marketing as a process.
Philip Kotler defines Marketing Research as – the systematic design, collection, analysis and
reporting of data findings relevant to a specific marketing situation facing the company.
Sikkim Manipal University 59
Marketing Management Unit 4
5.7 Features of Marketing Research
1. It is a systematic process – It has to be carried out in a stepwise and systematic manner and
the whole process needs to be planned with a clear objective.
2. It should be objective – It is important that the methods employed and interpretations are
objective. The research should not be carried out to establish an opinion nor should it be
intentionally suited towards predetermined results.
3. It is multidisciplinary – Marketing Research draws concepts from other disciplines such as
Statistics for obtaining reliable data and from Economics, Psychology and sociology for better
understanding of buyers.
4.8. Objectives of Marketing Research
Marketing Research may be conducted for different purposes. Based on how organizations use
Marketing Research, objectives of Marketing Research can be summarized as follows:
1. To understand why customers buy a product
2. To forecast the probable volume of future sales or expected market share
3. To assess competitive strengths and strategies
4. To evaluate the effectiveness of marketing action already taken
5. To assess customer satisfaction of company’s products/services
4.9. Marketing Research Process
Every marketing research problem is different requiring a special approach or emphasis. Still there is
a sequence of steps, called the research process which can be followed in all the marketing research
studies and projects. Each step in this research process in independent but it is closely related to
other steps, because the result of the preceding step is the basis for the succeeding step.
Sikkim Manipal University 60
Marketing Management Unit 4
Define the problem & research
objectives
Develop the Research Plan & Design
Collect the information
Analyze the information
Present the findings
Fig 4.2 Marketing Research Process
Step I – Define the problem and research objectives
It is said that ‘a problem well – defined is a problem half – solved’. A careful and precise definition of
the marketing problem will lead to useful and relevant results which can solve the marketing problem.
Each research project should have one or more objectives which form the broad frame within which
research has to be conducted.
It is very important to formulate the problem properly as being the first step in the process; any error
in this can mislead the entire study towards incorrect and erroneous results.
Step II Develop the Research Plan and Design
A Research plan is simply the framework within which collection and analysis of data is undertaken.
This step involves decisions on the data sources, research approaches, research instruments,
sampling plan and contact methods.
1. Data sources – The researcher has to decide which data sources to use – Secondary Data or
Primary Data or both.
Sikkim Manipal University 61
Marketing Management Unit 4
Secondary Data are data which collected for some other purpose or for commercial purpose of
selling.
Primary Data are freshly gathered for a specific purpose or a specific research project.
Researchers usually look for Secondary Data to see whether the research problem can be partly or
fully solved without collecting primary data. Secondary Data, when available, should be checked for
reliability, accuracy and relevance to specific situation. If so, it is a much better option as it is cheaper
and is immediately available. If such needed data is not available, primary data will have to be
collected.
2 Research Approaches – Primary Data can be collected using any of the five approaches. They
are:
1. Observational Research – Fresh data can be collected by observing the situation and the
people in the situation.
2. Focus Group Research is a method of discussion in which a team of eight to twelve persons
invited for a group discussion in presence of a skilled moderator to discuss a product, service, a
firm or any marketing related activity. The proceedings are observed and recorded on videotape
and subsequently analyzed to understand consumer attitudes, beliefs and behavior.
3. Survey Research – This is the most common of the approaches wherein surveys are undertaken
with the help of a questionnaire to learn about people’s knowledge, beliefs and preferences.
4. Behavioral Research – Customer’s actual behavior in terms of actual purchases reflect their
preferences and are more reliable than responses provided in surveys which are memory based.
5. Experimental Research – The most scientific method of research is experimental research
which tries to capture cause and affect relationships.
Experiments are conducted by selecting matched groups of subjects, which are subjected to different
treatments. Extraneous variables (The external variable that affect the research process) are
controlled and then responses of the two groups are observed and checked for statistically significant
differences, if any. Since the extraneous factors are eliminated or controlled, the observed effects are
related to the variations in the treatments.
3 Research Instruments – There are mainly two types of research instruments: questionnaires
and mechanical devices
Sikkim Manipal University 62
Marketing Management Unit 4
i Questionnaire – This consists of a set of questions logically arranged and presented to the
respondents to answer. Questionnaire is the most commonly used instrument for collection of
primary data due to its flexibility. It needs to be carefully prepared and pre – tested before being
used for actual data collection.
ii Mechanical Devices – Mechanical Devices such as galvanometers are used to measure the
interest or emotions aroused by exposure to an ad. Eye Cameras study respondent’s eye
movement to see which part of an ad attracted attention first and how long they pay attention to a
single item. These days Television audience ratings are measured using Audiometers which can
be attached to TV’s in a set of sample households. These devices record when the set is on and
to which channel it is tuned. The data collected by mechanical devices are generally found to be
more accurate than by human observation.
4 Sampling Plan – Now the researcher must prepare a sampling plan which outlines who should
be surveyed (Sampling Unit), How many should be surveyed (Sample Size) and how should they
be selected for the survey (Sampling Procedure).
i Sampling Unit – Researcher must define the element of the target population by whom
information shall be collected. For example, housewife or a youth between 16 – 25 years or an
office located on M. G. Road.
ii Sample Size – Large samples provide more reliable results than smaller samples. But normally
sample size is decided based on nature of the study and variance in the population, level of
accuracy desired and above all money available for research.
iii Sampling procedure – Two types of methods are available for selecting the samples –
Probability Sampling and Non– Probability Sampling.
Probability sampling method requires that each element of the population has an equal or known
chance of getting selected. It also allows the calculation of confidence limits for Sampling Error.
Three commonly used Probability sampling methods are Simple Random Sampling, Stratified
Random Sampling and Cluster Sampling.
In Non Probability Sampling method, respondents are chosen on the basis of researcher’s judgment
or convenience and this method does not allow sampling error to be measured. In spite of these
limitations, many researchers take Non – probability samples due to time and cost constraints. Three
commonly used Non – Probability sampling methods are Convenience Sampling, Judgment
Sampling and Quota Sampling.
Sikkim Manipal University 63
Marketing Management Unit 4
5 Contact Methods – Now the researcher has to decide how the respondent should be
contacted.The choices of methods available are mail, telephone, personal interview or online
interview.
Mail Questionnaire – This is the best way to reach people who may not give personal interview or if
the subject of the study is of a personal nature. This questionnaire should be simple and clearly
worded so that respondent can fill up the answers without any assistance. The response rate in this
method is usually low and responses come slowly.
Telephone Interview – This method is very quick way for gathering information. The method is
interactive, in case any clarification is required, but such an interview typically should be short. Only
few questions can be asked through this method. In India, Telephone interviewing is difficult as
people do not like to answer questions coming from strangers.
Personal Interview – This is the most versatile method which can be adapted to any kind of
research subject. By face to face interaction researcher will be able to make personal observations.
It is the most expensive and also time consuming method. Personal Interviews can be undertaken
after arranging interviews at the respondent’s premises or at Shopping Malls by stopping people and
requesting interview. The latter method is called Mall Intercept Method. This method is necessarily a
non – probability method but is less expensive and does not take too much time.
Online Interviews – There are many ways to collect information through the internet. A Company
can put a questionnaire on its web site and offer incentive to people to answer; a banner can be kept
on a popular site like Yahoo!, inviting people to answer some questions and win a prize. Every day
new methods are being evolved to start a new way to collect data. Advantages of online Interview
are that it is very inexpensive and can be very fast, whereas disadvantage is that it has limited reach
and results can be skewed.
Step III Collect the Information – After designing the research instrument, the researcher should
now actually contact the respondent and collect the information. At this stage, it is very important to
keep the quality of the data under control by ensuring accurate unbiased answers and by seeking the
entire respondent’s co – operation. In case the researcher has to appoint data collectors to collect
the information from respondents, they must be well trained and motivated.
Sikkim Manipal University 64
Marketing Management Unit 4
Step IVAnalyze the information –In this stage researcher collects the data and codify it.
Nowadays, many questionnaires are pre coded which makes the task of data entry very easy. The
coded data is then tabulated to provide frequency distributions. Tabulated data is now analyzed.
Averages and measures of dispersion are computed for the major variables. Advanced Statistical
Techniques are used to discover findings. Here the data is converted to information which may be
used in decision – making.
Step V Present the findings – At this last step, the researcher should present findings to the
decision makers or users of the information.
Normally, the findings are presented in the form of a report which should present the following
aspects of the research undertaken.
General Format of a Report
1. Introduction – An introduction to background of the marketing problem and the firm.
2. Statement of Purpose – Statement of purpose and objectives of the study including
hypothesis/hypotheses is/ are proposed.
3. Research Methodology – Methodology of data collection used and tools used, Sampling
Procedure used and Sample Size, Limitations of the study if any.
4. Analysis of Data – Includes tables /graphs and statistical analysis used along with data
interpretation.
5. Findings and Conclusions Major findings and conclusions.
6. Recommendations – Recommendations for action.
7. Appendix and Bibliography.
4.10. Importance of Marketing Research
With the increase in customer orientation, it has become necessary to acquire information on
consumers’ needs, preferences and opinions. This will help the marketers to make changes in the
marketing mix. Thus marketing research is a very important and useful tool in enhancing the decision
– making ability of the marketer in today’s dynamic environment.
Sikkim Manipal University 65
Marketing Management Unit 4
Self Assessment Questions 2
1. ___________ involves collection of information from a group of 8 – 12 persons who are invited
to discuss matters related to a product or service.
2. ____________ Data are data collected for some other purpose.
3. _______________ Research tries to capture cause and effect relationships.
4. In _____________ sampling method, respondents are chosen based on researcher’s judgment
or
5. ______________ Method involves stopping people while they are shopping and requesting an
interview.
4.11. Advantages And Limitations Of Marketing Research.
Advantages: Marketing Research has several advantages
1. It uses a scientific approach in designing the problem and finding out alternative solutions
through use of statistical and mathematical techniques.
2. It helps to make better marketing decisions as they are based on authentic information, rather
than pure judgment or guess work.
3. It helps in evaluating the effectiveness of various marketing actions and draws attention to likely
problem areas.
4. It is helpful in ascertaining the reputation of the firm and its products.
5. It helps the firm in knowing the marketing and pricing strategies of its competitors.
6. It is helpful to a firm in making sales forecasts for its products and thereby, establishes a
harmonious match between demand and supply of its products.
Limitations:
Like any other managerial tool, marketing research is not free from flaws. It is seen that in many
cases, wrongly executed marketing research project or improperly interpreted findings, has had to
disasters in business. Following are some of the limitations of marketing research.
1) Not an exact Science: Though marketing research uses scientific methods but it is not an exact
science. It deals with human behavior and many controllable and uncontrollable factors, which
influence marketing forces, play their role.
Sikkim Manipal University 66
Marketing Management Unit 4
2) It is not a panacea: Marketing Research can only provide accurate information, based on which
marketers have to take their decision using their experience and judgment as well. Marketing
Research is only an aid, it does not provide solutions.
3) Human Tendencies – Consumers, dealers, wholesalers etc are the basic constituents on whom
marketing research is carried out. Human beings behave artificially when targeted for research
information. These aspects of human behavior affect the quality of marketing research data.
4) Inexperienced research staff: It needs well trained and experienced researcher, interviewer and
investigator, otherwise quality of data will be adversely affected.
5) Involves high cost: It is considered a luxury or a wasteful activity in India, as it involves high
cost.
6) Limitations of tools and techniques: The validity of marketing research is also limited by the
limitation of tools and techniques involved.
4.12 Summary
1. Marketing Research is the systematic gathering recording and analyzing of data about problems
relating to marketing of goods and services.
2. Marketing managers need a Marketing Information System (MIS) to carry out their tasks of
analysis, planning, implementation and control related to the marketing function, effectively.
3. By providing timely and accurate information, MIS helps in improving the quality of decision –
making.
4. An MIS has four Components (I) Internal Records System (II) Marketing Intelligence System (III)
Marketing Research System (IV) Analytical Marketing System.
5. Marketing Research Process refers to a set of sequential steps to be followed to conduct a
marketing research study.
6. The main features of Marketing Research are that it is a systematic process; it should be
objective and it is multidisciplinary in nature.
7. With the changing character of markets, increase in Customer needs and wants and increasing
competition, it is important that marketers acquire information about consumer, the markets and
the competition. Marketing Research now is an important tool for marketers as an aid in decision
making.
Sikkim Manipal University 67
Marketing Management Unit 4
Terminal Questions
1. Explain the benefits of MIS?
2. Discuss briefly the process of Marketing Research?
3. What are the features of Marketing Research?
4. What is the usefulness of Marketing Decision support system?
5. Write a short note on limitations of Marketing Research?
Answers to Self Assessment Questions
Self Assessment Questions 1
1. Marketing Decision – Makers
2. Safeguard / Defuse
3. Periodically
4. Customized
5. Databases
Self Assessment Questions 2
1. Focus Group Research
2. Secondary
3. Experimental
4. Non – Probability
5. Mall Intercept
Answers to Terminal Questions
1. Refer to 4.3
2. Refer to 4.9
3. Refer to 4.7
4. Refer to 4.5
5. Refer to 4.11
Sikkim Manipal University 68