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Marketing Inform ation Sys tem

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 compo nents:

1. internal records system, which includes information on the order-to-payment cycle and salesreporting systems;

2. marketing intelligence system, a set of procedures and sources used by managers to obtaineveryday information about pertinent developments in the marketing environment.

3. marketing research system that allows for the systematic design, collection, analysis, andreporting of data and findings relevant to a specific marketing situation.

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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.

In form at ion 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 Record s

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.

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Internal Records and Marketing Intelligence

Order-to-Payment Cycle :

1. Customers and sales representatives fax or e-mail their orders.

2. Computerized warehouses quickly fill these orders.

3. 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 Inform at ion 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 re-

supply Wal-Mart stores in a timely manner.

Wal-Mart has entrusted P&G with the management of its inventory. Outsourcing

Databases, Data Warehou sing , 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.

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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 Informat ion

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.

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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 Respon sib le for Market ing Research

Most large companies have their own marketing research departments.

At much smaller companies, marketing research is often carried out by everyone in thecompany.

Business Organizations normally budget marketing research at 1 to 2 percent of companysales.

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The Marketing Research Process

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Defining the Problem and Research Objectives

Exploratory research gather preliminary information to help define the problem and suggesthypotheses

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 informationneeds

Gathering Secondary Informationcollect 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 observeshoppers as they browse the store , pick up and examine packages, and make buyingdecisions. It is best suited for exploratory research.

Survey research: the approach is best suited for gathering descriptive information. A companythat wants to know about peoples knowledge ,attitudes, preferences, or buying behavior canoften find out by asking them directly .it is best suited for descriptive research.

Experimental research: is best suited for causal information. It involves selecting matchedgroups of subjects ,giving them different treatments ,controlling unrelated factors , checking fordifferences in group responses .thus it explains the cause and effect relationships. Ex McDonald

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Data sou rces

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.

Behavio ral 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.

Experim ental Research:The most scientifically valid. The purpose of experimental research is tocapture cause-and-effect relationships by eliminating competing explanations of the observedfindings.

Experiments call for selecting matched groups of subjects, subjecting them to differenttreatments, controlling extraneous variables, and checking whether observed responsedifferences are statistically significant.

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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.

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B. Non-probabi l i ty Sample

Convenience sample: The researcher selects the most accessible population members.

Judgment sample: The researcher selects population members who are good prospects foraccurate information.

Quota sample: The researcher finds and interviews a prescribed number of people in each ofseveral 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?

Col lect the Informat ion

Getting the right respondents is critical.

In the case of surveys, four major problems arise.

1) Some respondents will not be at home and must be contacted again or replaced.

2) Other respondents will refuse to cooperate.

3) Others will give biased or dishonest answers. Finally,

4) some interviewers will be biased or dishonest.

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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 thehope 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?

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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.

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Lim itat ions of Market ing 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.

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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.

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