Table of Contents Hide
- What is a Marketing Information System?
- Why Marketing Information System?
- Marketing Information System Components
- Characteristics of a Marketing Information System
- Process of Creating a Marketing Information System
- Marketing Information System’s Importance
- Types of Data in a Marketing Information System
- Advantages with Examples of Marketing Information System
- Examples a Marketing Information System
- Marketing Information System FAQs
- What is a Marketing Information System?
Marketing information systems are crucial tools that assist marketing managers and business owners in making product development and promotional decisions. In this post, you’ll learn what a marketing information system is with examples, why they’re crucial, and how firms use them in practice.
What is a Marketing Information System?
A marketing information system (MIS) is a piece of software that gives data on marketing studies. It enables users to compile and evaluate data in a simple and well-organized manner. MIS systems are also useful tools for assisting users in making decisions on consumer behavior and the marketing mix, such as product placement, pricing, and promotion. The more information a management information system can supply, the more sophisticated it is.
But then every marketing operation works in tandem with the conditions that exist both inside and outside the company, and as a result, there are a variety of sources (internal, marketing intelligence, and marketing research) from which relevant market information can be collected.
Why Marketing Information System?
Within an organization, a marketing information system ensures effective communication. It provides reliable and useful information to team members in order to keep all internal teams informed and focused on specific tasks and goals. Furthermore, by giving everyone the same access to shared information, it also helps eliminate misinterpretation.
Using a marketing information system can also help your company’s overall success. You can make smarter, more strategic decisions by studying and comprehending well-organized data. You might also discover new ways to upgrade or expand your systems in order to collect and analyze data more effectively and build a more efficient company.
Marketing Information System Components
The following are major components of the marketing information system.
#1. Internal Records:
For the most part, internal records include sales data, customer databases, product databases, financial data, and operations data, among other things. The following is a full explanation of the internal data sources:
- Information can be gathered from records such as invoices, transmission copies, and billing documents created by businesses when they receive orders for goods and services from consumers, dealers, or salespeople.
- Current sales data, which serves as an aid to the Marketing Information System, should be maintained on a regular basis. The statistics on current sales and inventory levels assist management in determining their goals, and marketers can utilize this data to plan their future sales strategy.
- The companies maintain many databases, including the Customer Database, which stores complete information about a customer’s name, address, phone number, purchasing frequency, financial situation, and so on.
- *Product Database- This is a database that stores all of the information about a product’s price, features, and variants.
- *Salesperson database, which saves all of the salesperson’s information, including his name, address, phone number, sales target, and so on.
- Companies store their data in a data warehouse, from which they can retrieve it whenever they need it. Statistical professionals mine it using a variety of computer applications and procedures; converting it into useful information such as facts and statistics after saving.
#2. Marketing Intelligence System:
A marketing intelligence system delivers information about market events; i.e. information about the marketing environment outside of the firm. It contains information on changing market trends, competition pricing strategies, changes in customer tastes and preferences, new items introduced to the market, competitor promotion plans, and so on.
Basically, companies should strive aggressively to develop the marketing intelligence system in order to have an efficient marketing information system by implementing the following steps:
- Providing sufficient training and motivating the sales team to keep an eye on market trends. These include changes in customer tastes and preferences, and provide ideas for improvements, if necessary.
- Motivating channel partners in the field, such as dealers, distributors, and retailers, to give relevant and necessary information about customers and competitors.
- Companies can also strengthen their marketing intelligence system by gathering more data about their competition. This can be achievable by purchasing a competitor’s product, attending trade exhibitions, or reading publications, journals, and financial reports by the competitor.
- Companies can improve their marketing information systems by involving loyal consumers in a customer advisory panel, where they can share their experiences and offer advice to new potential customers.
- Companies can strengthen their marketing information system by utilizing government data. The information might be related to population trends, demographic features, agricultural production, and other factors that assist a company plans its marketing operations.
In addition, organizations can purchase information about the marketing environment from research firms that conduct studies on all market participants.
#3. Marketing Research:
This is the systematic collecting, organization, analysis, and interpretation of primary or secondary data in order to discover solutions to marketing challenges.
Several companies use statistical methods to study the marketing environment, which includes changes in client tastes and preferences, competition strategies, the breadth of new product launches, and other factors. To perform market research, data must be acquired, which can be either primary data (first-hand information) or secondary data (information obtained from other sources); second-hand data, available in books, magazines, research reports, journals, etc.
The secondary data is publically available. However, for original data, you’d need to obtain those from using questionnaires, personal interviews, surveys, seminars, and other means.
Marketing research plays an important role in the marketing information system because it provides factual data that has been thoroughly tested by researchers.
#4. Marketing Decision Support System:
This system consists of numerous software packages that marketers can utilize to examine the data they’ve gathered so far and make better marketing decisions.
The introduction of computers allows marking managers to save large amounts of data in a tabular format, evaluate the data using statistical algorithms, and make decisions based on the findings.
As a result, marketers must keep an eye on the marketing environment. This includes both internal (inside the company) and external (outside the organization). In the end, it helps to establish marketing policies, processes, and strategies that are appropriate.
Characteristics of a Marketing Information System
- Management information systems (MIS) is a continuous process. It is always in action.
- The MIS serves as a data bank, allowing managers to make quick decisions.
- MIS focuses on the future. It solves marketing problems as well as anticipates and prevents them. In marketing, it is both a preventative and a curative procedure.
- Operations research techniques are a tool to process data a business acquires. In the world of marketing, modern mathematical and statistical methods are accessible for problem-solving.
- Management information systems (MIS) is a computer-based data collecting, processing, and storage system.
- Management receives a consistent stream of information — the correct information, for the right people, at the right time and at the right cost.
- The Marketing Information System serves as a buffer between the marketing environment and the marketing decision-makers. From the environment to the marketing information system, marketing data flows.
Process of Creating a Marketing Information System
To influence decision-making, marketing information systems use a sequential process to synthesize data and discuss insights. The steps in the marketing information system process, at a glance, are as follows:
#1. Decide on the right marketing metrics
Because every piece of knowledge has both potential and an actual cost, It is critical to carefully choose the subject or area that requires the use of a marketing information system, as well as the appropriate metrics to use.
#2. Obtain pertinent information from both external and internal sources
The relevant data is then collected according to the selected KPIs from various internal and external sources (books of accounts, sales records, sales reports, and analytics) (customer surveys, economic or financial metrics, social media insights, and competitor results).
#3. Visualize trends by graphing the data
The collected data must then be structured and presented on a graph in a systematic manner to allow for comparative analysis, future prediction, and interpretation.
#4. Distribute the trend data to the departments who need it
Now you’d need to distribute the graphical information to various departments so that the data may be better interpreted and analyzed. This’d ensure that businesses make decisions in accordance with corporate goals.
#5. Use the information to choose the best line of action
The final stage is to determine the best course of action and implement it in the business to improve marketing results.
Marketing Information System’s Importance
Like we’ve mentioned on countless occasions, the marketing information system has made it easier for marketing managers to make decisions. It has also proven to be a beneficial tool for the strategic planning of business activities.
Let’s have a look at some of its other importance:
It fills up Information Gap:
Marketing information systems make global shopping and other international trade activities easier for businesses. The goal is to address their information demands while also keeping them informed about the global situation.
It is a useful tool for future decision-making involving strategic, operational, and control considerations.
A marketing information system evaluates market demand and potential sales to guarantee that a company plans its marketing operations effectively.
MIS aids in implementing non-price competition techniques. It makes the brand image, product customization, product differentiation, public relations, supplementary services, and other things easier. This helps to keep customers without having to compete on price.
Demand Generation and Fulfillment:
It also gives data on client needs. Thus, through marketing research, creating a need for those things that the consumer’s subconscious mind desires, and then satisfying those wants in reality.
Saves Money and Time:
A marketing information system focuses on a problem area and makes the appropriate judgments to prevent wasting time, money, and effort on ineffective operations.
Systematic Data Recording:
It allows for the systematic organization of obtained data in order to provide helpful information for future marketing planning and decision-making.
Better Control and Evaluation:
A marketing information system aids in the monitoring and evaluation of marketing operations and programs. It also allows for corrective action in the event that the desired results are not achieved.
Adapting to Changes in the Marketing Environment:
It monitors any changes in the economic, political, technological, and competitive settings on a regular basis. It aids in seizing fresh chances and preparing for future obstacles.
The management of corporate activities has become a lot easier than it was before, thanks to technological advancements and modernization. With just a single click, we can now stay up with current events and recent developments on our computers.
Types of Data in a Marketing Information System
In a marketing information system, there are various types of data. The following categories are the most common:
Storage of large volumes of marketing and sales data, as well as client information, often go into specific databases. And certain organizations may be able to gain access to these databases for little or no expense.
Businesses can use the data they buy to help them make better, more informed decisions by entering it into their marketing information system. Companies that specialize in gathering data on business trends, consumer behavior, and business trends, for example, and developing reports to sell are available. Similarly, businesses can buy data from government databases to learn about the demographics and economics of firms, groups, or specific individuals.
Data from within the company
Internal company data can be turned into valuable insights using marketing information systems. You could, for example, use data from marketing activities or sales to generate reports. You can also use your marketing information system to acquire information about specific individuals, departments, or business units by integrating it with an internal company communications network or intranet.
Intelligence on Marketing
You can use marketing information systems to acquire insights from the marketing intelligence data you collect about your target market. Consider gathering marketing intelligence data from your competitors’ websites or industry trade journals, for example. You might also look into less automatic and more manual solutions like speaking with distributors, making observations, attending trade events, or testing products.
Market research and data from custom and syndicated research reports, as well as primary and secondary research, can be integrated using marketing information systems. It’s critical to gather as much specific and unique data as possible, particularly about your customers, competitors, and overall business environment. This will enable you to gain more useful information and make better decisions.
Advantages with Examples of Marketing Information System
The amount of information required by a business on a daily basis is enormous in today’s increasingly competitive and developing industry. As a result, they must set up a Marketing Information System. Marketing information systems have a number of advantages and disadvantages too.
1) Organized Data Collection
The market can provide a wealth of information. However, the keyword here is “organized.” Data organization is critical; else, the data is worthless. As a result, MIS aids in the organization of your database, resulting in increased productivity.
2) A Broad Perspective
With the right MIS in place, you can track the entire organization, which can be used to analyze independent processes. This aids in the development of a broader viewpoint, allowing us to determine which activities can be taken to support improvement.
3) Important Data Storage
In the pharmaceutical industry, it is not uncommon for data from a previous drug to be required when a new drug is being developed. Photographs are archived in the same way in the media. This significant data storage is critical for execution, demonstrating that a Marketing Information System, in these examples, is vital not just for information but also for execution.
4) Crisis Avoidance
The best approach to evaluate a stock in the stock market is to look at its prior performance. MIS aids in the tracking of margins and earnings. With a great information system in place, you’ll be able to see where your company is headed and possibly avoid a catastrophe before it occurs. Ignoring hints from MIS reports is a bad idea.
Consumer durables and fast-moving consumer goods (FMCG) organizations have a large number of processes that must be coordinated. These businesses rely entirely on MIS to keep their operations functioning smoothly. In such firms, there are people who are solely responsible for marketing information systems. This is primarily due to the speed with which information must be accessed and implemented.
7) Analysis and Planning
Like we mentioned earlier management information systems (MIS) are essential for planning. You can’t plan without knowing what you’re doing. The capabilities of the organization must come first in planning, then the business environment, and finally competitor analysis. All of these are present by default in a good MIS which undergoes updates on a regular basis. As a result, MIS is critical for planning and analysis.
Just as MIS can assist in a crisis, it can also assist in normal times, providing some sort of control. This is achievable by providing information about the various processes in progress and what is happening throughout the company. As a result, it gives you a sense of control.
However, marketing information systems have a number of drawbacks, including maintenance, complexity, and setting up the systems. Furthermore, incorrect data being fed into MIS can be inconvenient, necessitating the establishment of appropriate filters.
The high initial time and labor costs, as well as the complexity of setting up an information system, are disadvantages of a Marketing information system. Marketers often claim that they don’t have enough or the correct kind of marketing information, or that they have too much of the wrong kind.
Risks and Limitations of MIS
“Because of the rapid changes in the external market, marketing data should be collected on a frequent basis.” According to Bhasin, the following are some of the potential risks that the company could face if they do not follow the rules:
- It’s possible that opportunities will be missed.
- It’s also possible that employees aren’t aware of environmental changes or competitors’ conduct.
- Data collecting over a long period of time may be challenging to analyze.
- It’s possible that marketing plans and decisions aren’t thoroughly scrutinized.
- Data collection could be disjointed.
- Previous research may not be saved in an easily accessible format.
- If a new study is required, there may be a time lag.
- Actions could be reactive rather than proactive.
Overall, the key impediments to marketing information systems are maintenance, complexity, and setting up an MIS. Furthermore, incorrect data being input into MIS can be inconvenient, necessitating the establishment of appropriate filters.
“Both primary and secondary types of research give lots of the data and information needed for marketers,” Kotler and Philip write, “whereas secondary data sources are significantly superior in providing data quickly and at a reduced cost.”
Simultaneously, a company may not be able to find all of the data required on its own, but it may be possible to do it with the support of secondary research. However, in order to ensure accuracy, updates, and fairness, researchers must examine data collected from both primary and secondary data sources. Each of the three basic data gathering methods – observational, survey, and experimental – has benefits and drawbacks. Similarly, each research contact technique — mail, phone, human interview, and online – has its own set of benefits and cons. All of which will affect the end result of what an MIS has to offer.
Examples a Marketing Information System
As the following two examples demonstrate, the marketing information system is evolving.
Using MIS to Assist in the Development of Marketing Plans:
The Gillette Company uses information acquired from recurring research studies to assist its management in developing marketing plans. Gillette created projects to give management a comprehensive image of the razor and blade business, compete with extensive descriptions of consumers, competition, and distribution.
These projects provide data on market shares, brand loyalty and switching, consumer attitudes, brand and advertising awareness, product advantages versus the competition, inventory levels, out-of-stock, retail prices and display, local advertising, and more to Gillette marketing managers.
The managers have a complete picture of the current market and competitive conditions from the most recent set of studies, and they are aware of the recent trends that exist in all of these data. This is because the data is gathered from recurring studies. All of this data provides the Gillette executives with a good historical record on how to construct their new marketing strategies.
MIS to Evaluate the Effectiveness of the Marketing Plan:
For each market area, as well as overall, gross margin, marketing expenditures, and contribution to earnings are reported. This data is also presented for each market;
- as a percentage of the total for all markets, and
- as a dollar amount of change from the previous year.
In addition, for each market, the total industry sales in dollars, the firm’s market share, the percentage of retail distribution achieved for the product, and television media costs are shown for this year and last year.
Changes in demand (as reflected in total industry sales), sales, costs, and earnings, changes in competition (as reflected in market share and retail distribution percentages), and changes in advertising costs can all be observed using these data. This data is available for all markets and by market. With this information, management can reevaluate a product’s marketing budget as well as the effectiveness of the advertising-sales promotion mix in use, and make changes as needed.
For example, $100,000 in advertising and promotion expenses in Area A resulted in a contribution to earnings of $260,000.
On the other hand, $400,000 in advertising and promotion expenses resulted in a contribution to earnings of only $280,000 in Area E. This suggests that the company could boost its overall earnings contribution by moving some advertising and promotion funds from Area E to Area A.
Marketing Information System FAQs
What is a Marketing Information System?
A marketing information system (MIS) is a piece of software that gives data on marketing studies. It enables users to compile and evaluate data in a simple and well-organized manner.