ASSIGNMENT

On
Marketing Information System
Paper: Marketing Management (MGT-202) Submitted To: L.D.Singh Date of Submission: 30/05/2011

Submitted By:
Group III Name Bendangnungla Jamir Debasish Phukan

Sl. No i ii

Roll. No. NU/MN-04/10 NU/MN-06/10

MBA 2nd Semester NU/MN-06/10 School of Management Studies, NU

Marketing Information System

An Introduction to Marketing Information System (MkIS) Simply put, MkIS is a computerized system that is designed to provide an organized flow of information to enable and support the marketing activities of an organization. "A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control". The MkIS serves collaborative, analytical and operational needs. In the collaborative mode, the MkIS enables managers to share information and work together virtually. In addition, the MkIS can enable marketers to collaborate with customers on product designs and customer requirements. The analytical function is addressed by decision support applications that enable marketers to analyze market data on customers, competitors, technology and general market conditions. These insights are becoming the foundation for the development of marketing strategies and plans. The MkIS addresses operational needs through customer management systems that focus on the day-to-day processing of customer transactions from the initial sale through customer service. MkIS systems are designed to be comprehensive and flexible in nature and to integrate with each other functionally. They are formal, forward looking and essential to the organizations ability to create competitive advantage. The MkIS is the firms window on the world and, increasingly, it is the primary customer interface.

Figure 1: Illustrates the major components of an MIS, the environmental factors monitored by the system and the types of marketing decision which the MIS seeks to underpin. The explanation of this model of an MkIS begins with a description of each of its four main constituent parts: the internal reporting systems, marketing research system, marketing intelligence system and marketing models. It is suggested that while the MkIS varies in its degree of sophistication - with many in the industrialized countries being computerized and few in the developing countries being so - a fully fledged MkIS should have these components, the

Marketing Information System

methods (and technologies) of collection, storing, retrieving and processing data notwithstanding. Internal reporting systems: All enterprises which have been in operation for any period of time have a wealth of information. However, this information often remains underutilized because it is compartmentalized, either in the form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is usually categorized according to its nature so that there are, for example, financial, production, manpower, marketing, stockholding and logistical data. Often the entrepreneur, or various personnel working in the functional departments holding these pieces of data, does not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. The internal records that are of immediate value to marketing decisions are: orders received, stockholdings and sales invoices. These are few of the internal records that can be used by marketing managers, but even this small set of records is capable of generating a great deal of information. Below, is a list of some of the information that can be derived from sales invoices... Product type, size and pack type by territory Product type, size and pack type by type of account Product type, size and pack type by industry Product type, size and pack type by customer Average value and/or volume of sale by territory Average value and/or volume of sale by type of account Average value and/or volume of sale by industry Average value and/or volume of sale by sales person By comparing orders received with invoices an enterprise can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns. Marketing research systems: Marketing research is a proactive search for information. Such studies aim to solve a perceived problem, or a problem that can be defined and solved with the course of study. Marketing research is the systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing by an organization. It focuses on applied research- studies that are conducted to answer questions about specific marketing problems or to make decisions about particular course of action, strategies or policies. Companies make use of marketing research in a wide variety of situations. Market research can help marketers assess market potential and market share; understand
Marketing Information System

customer satisfaction and purchase behavior and measure the effectiveness of price, product and promotion activities in specific markets. The other form of marketing research practice is not on a specific marketing problem but is an attempt to continuously monitor the marketing environment. These monitoring or tracking exercises are continuous marketing research studies, often involving panels of farmers, consumers or distributors from which the same data is collected at regular intervals. Competitive pressure, the cost of making a strategy mistake, and the complexity of domestic and foreign markets dictate that a firm must have access to timely information. Marketing research plays an important role in providing marketing information system. Marketing intelligence systems: A marketing intelligence system is a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making. Marketing intelligence can be collected by reading books, newspapers, trade journals and publications, and by talking to and listening to customers, suppliers, and distributors. It can also be obtained by meeting and discussing with other company managers. It also involves a large informal process of observation and environment scanning by the marketing managers. Marketing intelligence is the province of entrepreneurs and senior managers within an agri-business. It involves them in scanning newspaper trade magazines, business journals and reports, economic forecasts and other media. In addition it involves management in talking to producers, suppliers and customers, as well as to competitors. Nonetheless, it is a largely informal process of observing and conversing. Some enterprises will approach marketing intelligence gathering in a more deliberate fashion and will train its sales force, after-sales personnel and district/area managers to take cognizance of competitors' actions, customer complaints and requests and distributor problems. Enterprises with vision will also encourage intermediaries, such as collectors, retailers, traders and other middlemen to be proactive in conveying market intelligence back to them.
Methods of Scanning the economic and Business Environment for Marketing Intelligence Unfocused The manager, by virtue of what he/she reads, hears and watches exposes scanning him/herself to information that may prove useful. Whilst the behavior is unfocused and the manager has no specific purpose in mind, it is not unintentional Semifocused scanning Again, the manager is not in search of particular pieces of information that he/she is actively searching but does narrow the range of media that is scanned. For instance, the manager may focus more on economic and business publications, broadcasts etc. and pay less attention to political, scientific or technological media.
Marketing Information System

Informal search

This describes the situation where a fairly limited and unstructured attempt is made to obtain information for a specific purpose. For example, the marketing manager of a firm considering entering the business of importing frozen fish from a neighboring country may make informal inquiries as to prices and demand levels of frozen and fresh fish. There would be little structure to this search with the manager making inquiries with traders he/she happens to encounter as well as with other ad hoc contacts in ministries, international aid agencies, with trade associations, importers/exporters etc. This is a purposeful search after information in some systematic way. The information will be required to address a specific issue. Whilst this sort of activity may seem to share the characteristics of marketing research it is carried out by the manager him/herself rather than a professional researcher. Moreover, the scope of the search is likely to be narrow in scope and far less intensive than marketing research

Formal search

Marketing models: Within the MkIS there has to be the means of interpreting information in order to give direction to decision. A good marketing information system should have, within itself, the means of interpreting information to facilitate giving direction to decision making. This will consist of marketing models, which could be computerized or manual. Some useful marketing models are given below: Time series sales modes Brand switching models Linear programming Elasticity models (price, incomes, demand, supply, etc.) Regression and correlation models Analysis of Variance (ANOVA) models Sensitivity analysis Discounted cash flow Spreadsheet 'what if models These and similar mathematical, statistical, econometric and financial models are the analytical subsystem of the MkIS. A relatively modest investment in a desktop computer is enough to allow an enterprise to automate the analysis of its data. Some of the models used are stochastic, i.e. those containing a probabilistic element whereas others are deterministic models where chance plays no part. Brand switching models are stochastic since these express brand choices in probabilities whereas linear programming is deterministic in that the relationships between variables are expressed in exact mathematical terms.

Marketing Information System

The Role of the Internet in MkIS Information technology has transformed how firms conduct business. For example, financial service providers such as banks, stockbrokers and insurance companies could not do business today without their client-server-based information technology. This technology has long supported marketing activities. However, it is the recent advent of the Internet, and especially the browser based World Wide Web, which has ignited a revolution in MkIS. The term cyber marketing is often used to describe the Internets convergence of computers, information systems, telecommunications and the customer with the marketing process. Internet marketing is characterized by interactivity, graphical user interfaces, multimedia content, and one-to-one connectivity. Internet technologies are not only providing new ways to reach the customer, but also to enable the reengineering of the entire marketing process and, indeed, the entire enterprise. The rapidly growing field of marketing automation encompasses customer management functions to support e-commerce. As depicted in Figure 2, customer management applications include marketing decision support systems, customer relationship management, sales force automation, and customer service and e-commerce activities. These activities are often described as front office customer-oriented activities. Back office enterprise resource planning (ERP) activities include manufacturing, finance and human resources. Supply chain management (SCM) activities encompass electronic procurement, inventory management, quality management and logistics systems to link an organization with its suppliers. These three elements comprise the enterprise information system. Figure 2: The interfaces of MkIS

Supply Chain
Supply Chain Management (SCM) Electronic procurement Inventory management Quality management Logistics Chain

Enterprise Back Office

Enterprise Resource Planning (ERP)
Order Processing Manufacturing Finance/Accounting Human Resources

Marketing Front Office

Marketing Automation E-Commerce MDSS Sales Force Automation CRM Customer Service

Marketing Information System

Benefits of the Marketing Information System (MkIS): The MkIS increases the number of options available to decision-makers and supports every element of marketing strategy. MkIS affects marketings interfaces with customers, suppliers and other partners. The primary benefits of the MkIS impact in the areas of market monitoring, strategy development, strategy implementation, and functional integration. 1. Market Monitoring. Through the use of market research and marketing intelligence activities the MkIS can enable the identification of emerging market segments, and the monitoring of the market environment for changes in consumer behavior, competitor activities, new technologies, economic conditions and governmental policies. Market research is situational in nature and focuses on specific strategic or tactical marketing initiatives. Marketing intelligence is continuous in nature and involves monitoring and analyzing a broad range of market-based activities and information sources. There are three major sources of market information. The first is syndicated data published by market research companies and industry associations. Company-sponsored primary research is another option. It is much more focused since you ask specific questions of respondents within your markets. But, it is considerably more expensive and time consuming. Perhaps the best data available are your own customers behavior captured from web site viewing, point of sale (POS) transactions, and systematic feedback from the sales force. 2. Strategy Development. The MkIS provides the information necessary to develop marketing strategy. It supports strategy development for new products, product positioning, marketing communications (advertising, public relations, and sales promotion), pricing, personal selling, distribution, customer service and partnerships and alliances. The MkIS provides the foundation for the development information system-dependent e-commerce strategies. 3. Strategy Implementation. The MkIS provides support for product launches, enables the coordination of marketing strategies, and is an integral part of sales force automation (SFA), customer relationship management (CRM), and customer service systems implementations. The MkIS enables decision makers to more effectively manage the sales force as well as customer relationships. Some customer management software companies are extending their CRM applications to include partner relationship management (PRM) capabilities. This has become increasingly important as many marketers are choosing to outsource important marketing functions and form strategic alliances to address new markets. 4. Functional integration. The MkIS enables the coordination of activities within the marketing department and between marketing and other organizational functions such as engineering, production, product management, finance, manufacturing, logistics, and customer service.

Marketing Information System

The Strategic Role of the Marketing Information Systems (MkIS): Historically, the role of the marketing function has been to support make and sell business strategies that emphasized increases in market share over the creation of long-term customer value. This view started to change after World War II with the recognition that satisfying the customers needs and wants should be the focus of a firms business activities. The emphasis on the customer elevated the importance of marketing as a core business function on a par with research and development and production. The marketing function has become the firms window to the world in the sense that it must monitor the marketing environment for changes in buyer behavior, competition, technology, economic conditions, and government policies. Marketing is a strategic function in that marketing activities enable organizations to identify and adapt to changes in the market environment. The strategic function of marketing is further emphasized as Internet-based technologies have enabled radically new approaches to selling where information technology for the first time touches customers and provides new means for collecting marketing information. In a knowledge-intensive economy, the ability to collect, analyze and act upon marketing information more rapidly than the competition is the core competency from which competitive advantage flows. Marketing information systems provide the information technology backbone for the marketing organizations strategic operations. In a broader sense, the MkIS creates an organized and timely flow of information required by marketing decision makers. It involves the equipment, software, databases, and also the procedures, methodologies and people necessary for the system to meet its organizational objectives. MkIS encompasses a broad spectrum of activities from simple transaction processing complex marketing strategy decision making.

Referred: 1. Marketing Management Dr. K.Karunakaran (HPH) 2. Marketing Management - Philip Kotler (PHI) 3. Internet

Marketing Information System