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. MIS has three components: 1. internal records system, which includes information on the order-to-payment cycle and sales reporting systems; 2. marketing intelligence system, a set of procedures and sources used by managers to obtain everyday information about pertinent developments in the marketing environment. 3. marketing research system that allows for the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation.

Marketing Information System 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. Information Needs Probes What decisions do you regularly make? What information do you need to make these decisions? What information do you regularly get? What special studies do you periodically request? What information would you want that you are not getting now? What are the four most helpful improvements that could be made in the present marketing information system? Internal Records Marketing managers rely on internal reports on: 1. orders, 2. sales, 3. prices, 4. costs, 5. inventory levels, 6. receivables, 7. Payables 8. By analyzing this information, they can spot important opportunities and problems.

Internal Records and Marketing Intelligence

Order-to-Payment Cycle :
1. 2. 3. Customers and sales representatives fax or e-mail their orders. Computerized warehouses quickly fill these orders. The billing department sends out invoices as quickly as possible. using the Internet and extranets to improve the speed, accuracy, and efficiency of the order-to-payment cycle.

Sales Information System:

Marketing managers need timely and accurate reports on current sales. Wal-Mart knows the sales of each product by store and total each evening. enables it to transmit nightly orders to suppliers for new shipments of replacement stock. Wal-Mart shares its sales data with its larger suppliers such as P&G and expects P&G to resupply Wal-Mart stores in a timely manner. Wal-Mart has entrusted P&G with the management of its inventory. Outsourcing Databases, Data Warehousing, and Data Mining : companies organize their information in databases: 1. customer databases, 2. product databases, 3. salesperson databases Organizations combine data from the different databases.

customer database: customer database will contain every customer's: 1. name, 2. address, 3. past transactions, 4. demographics and 5. psychographics (activities, interests, and opinions) in some instances. Marketing Intelligence System :A Marketing Intelligence System is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. The goal is to improve strategic decision making, assess and tracks competitors actions and provide early warning of opportunities and threats.

Sources of Information Marketing managers collect marketing intelligence by: 1. reading books, 2. newspapers, and trade publications; 3. talking to customers, suppliers, and distributors; and 4. meeting with other company managers.

Steps to Improve Marketing Intelligence Train sales force to scan for new developments Motivate channel members to share intelligence Network externally Utilize a customer advisory panel Utilize government data resources Purchase information Collect customer feedback online Marketing Research : is a process that identifies and defines marketing opportunities and problems, monitors and evaluates marketing actions and performance, and communicates the findings and implications to management . Who Is Responsible for Marketing Research Most large companies have their own marketing research departments. At much smaller companies, marketing research is often carried out by everyone in the company. Business Organizations normally budget marketing research at 1 to 2 percent of company sales.

The Marketing Research Process

Defining the Problem and Research Objectives Exploratory research gather preliminary information to help define the problem and suggest hypotheses Descriptive research describe the size and composition of the market Causal research tests hypotheses about cause and effect relationships Developing the Research Plan Determining Specific Information Needs translate research objectives into specific information needs Gathering Secondary Information collect information that is already in existence Planning Primary Data Collection information being collected for the specific purpose at hand

Research Approaches Observational research: involves gathering primary data by observing relevant people action s, situations. Ex a consumer packaged goods marketer might visit supermarkets and observe shoppers as they browse the store , pick up and examine packages, and make buying decisions. It is best suited for exploratory research. Survey research: the approach is best suited for gathering descriptive information. A company that wants to know about peoples knowledge ,attitudes, preferences, or buying behavior can often find out by asking them directly .it is best suited for descriptive research. Experimental research: is best suited for causal information. It involves selecting matched groups of subjects ,giving them different treatments ,controlling unrelated factors , checking for differences in group responses .thus it explains the cause and effect relationships. Ex Mc Donald

Data sources
Data sources: Primary data can be collected in five main ways: Observation, Focus groups, Surveys, behavioral data, Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and customer databases. Experiments. Behavioral Data: Customers leave traces of their purchasing behavior in store scanning data, catalog purchases, and customer databases. Survey Research: Companies undertake surveys to learn about people's knowledge, beliefs, preferences, and satisfaction, and to measure these magnitudes in the general population. Focus Group: is a gathering of six to ten people who are carefully selected based on certain demographic, psychographic, or other considerations and brought together to discuss at length various topics of interest. Experimental Research: The most scientifically valid. The purpose of experimental research is to capture cause-and-effect relationships by eliminating competing explanations of the observed findings. Experiments call for selecting matched groups of subjects, subjecting them to different treatments, controlling extraneous variables, and checking whether observed response differences are statistically significant.

Contact Methods in Research

Mail Telephone Personal Interview Individual interview In-depth interview Internet surveying Electronic mail Web page Sampling Plan A sample is a segment of the population selected to represent the population as a whole To design a sample four decisions must be made: Who will be surveyed? How many people will be surveyed? How will the sample be chosen? Probability or non probability samples When will the survey be given? A. Probability Sample : Simple random sample: Every member of the population has an equal chance of selection. Stratified random sample: The population is divided into mutually exclusive groups (such as age groups), and random samples are drawn from each group. Cluster (area) sample: The population is divided into mutually exclusive groups (such as city blocks), and the researcher draws a sample of the groups to interview.

B. Non-probability Sample Convenience sample: The researcher selects the most accessible population members. Judgment sample: The researcher selects population members who are good prospects for accurate information. Quota sample: The researcher finds and interviews a prescribed number of people in each of several categories. Research Instruments The interview structured e.g questionnaires unstructured Mechanical devices Structured models eg. test markets

What are some types of closed-ended and open-ended questions?

Collect the Information 1) 2) 3) 4) Getting the right respondents is critical. In the case of surveys, four major problems arise. Some respondents will not be at home and must be contacted again or replaced. Other respondents will refuse to cooperate. Others will give biased or dishonest answers. Finally, some interviewers will be biased or dishonest.

Analyze the Information The next-to-last step in the process is to extract findings from the collected data. The researcher tabulates the data and develops frequency distributions. Averages and measures of dispersion are computed for the major variables. The researcher will also apply some advanced statistical techniques and decision models in the hope of discovering additional findings.

Present the Findings As the last step, the researcher presents the findings. The researcher should present findings that are relevant to the major marketing decisions facing management.

Make the Decision The last step is decision-making process Evaluating the decision made The decision process itself Two questions should be asked: 1) Was the decision made? (analyst do not make decisions) 2) Was a decision right ?

The Characteristics of Good Marketing Research 1. Scientific method Effective marketing research uses the principles of the scientific method: careful observation, formulation of hypotheses, prediction, and testing 2. Research creativity At its best, marketing research develops innovative ways to solve a problem: a clothing company catering to teenagers gave several young men video cameras, then used the videos for focus groups held in restaurants and other places teenagers frequently visited. 3. Multiple methods Marketing researchers shy away from overreliance on any one method. They also recognize the value of using two or three methods to increase confidence in the results. Qualitative research explores attitudes, behavior and experiences through such methods as interviews or focus groups. It attempts to get an in-depth opinion from participants. As it is attitudes, behavior and experiences which are important, fewer people take part in the research, but the contact with these people tends to last a lot longer.

Quantitative research generates statistics through the use of large-scale survey research, using methods such as questionnaires or structured interviews. If a market researcher has stopped you on the streets, or you have filled in a questionnaire which has arrived through the post, this falls under the umbrella of quantitative research. This type of research reaches many more people, but the contact with those people is much quicker than it is in qualitative research.

Limitations of Marketing Research

The results of MR are very vague as MR is carried out on consumers, suppliers, intermediaries, etc. who are humans. Humans have a tendency to behave artificially when they know that they are being observed. Thus, the consumers and respondents upon whom the research is carried behave artificially when they are aware that their attitudes, beliefs, views, etc are being observed. MR is not a complete solution to any marketing issue as there are many dominant variables between research conclusions and market response. MR is not free from bias. The research conclusions cannot be verified. The reproduction of the same project on the same class of respondents give different research results. There is less interaction between the MR department and the main research executives. The research department is in segregation. This all makes research ineffective. MR faces time constraint. The firms are required to maintain a balance between the requirement for having a broader perspective of customer needs and the need for quick decision making so as to have competitive advantage. Huge cost is involved in MR as collection and processing of data can be costly. Many firms do not have the proficiency to carry wide surveys for collecting primary data, and might not also able to hire specialized market experts and research agencies to collect primary data. Thus, in that case, they go for obtaining secondary data that is cheaper to obtain. Inappropriate training to researchers can lead to misapprehension of questions to be asked for data collection. Many business executives and researchers have ambiguity about the research problem and its objectives. They have limited experience of the notion of the decision-making process. This leads to carelessness in research and researchers are not able to do anything real.

Assignment Many market researchers have their favourite research approaches or techniques , although different researchers often have different preferences . Some researches maintain that the only way to really learn about consumers or brands is through in-depth qualitative research .others contend that the only legitimate and defensible form of marketing research involves quantitative measures . Take a position :Marketing research should be quantitative Vs Marketing research should be qualitative.