Concept of Marketing Information System and its Components

Marketing Information System (MIS)

A marketing information system (MIS) is a set of methods and procedures that are designed to generate, analyze, and store anticipated marketing decision information on a regular or continuous basis. An information system could be used operationally, managerially, and strategically for various aspects of marketing.

We all know that no any marketing activity can be carried out in isolation, know when we say it doesn’t work in isolation that means there are several forces that can be external or internal, controllable or uncontrollable that are working on it. Thus to know which forces are acting upon it and its impact the marketers need to gather the data and information through its own resources which in terms of marketing we can say he is trying to gather the market information or form of Marketing Information System(MIS).

 The effectiveness of the marketing decision is proved if it consists of strong information system offering the firm a competitive advantage. Marketing Information should not be approached in an irregular manner. If research is done this way, a company may face these risks:

1. Opportunities can be missed.
2. There might be a lack of awareness of environmental changes as well as competitors’ actions.
3. Data collection can be difficult to analyze over various time periods.
4. Marketing decisions and plans may not be properly reviewed.
5. Data collection can be disjointed.
6. Previous studies might not be stored in an easy to use format.
7. Time lags might result if a new study is required.
8. Actions can be reactionary rather than anticipatory.

The disadvantages of a Marketing information system are labor costs and high initial time and the complexity of setting up an information system. Marketers often complain that they lack much marketing information or the right kind, or have too much of the wrong kind. Effective marketing information system will help to solve those problems.

The major role of MIS is to identify what sort of information is required for the marketing managers. It then collects and analyzes the collected information. It supplies this information to the marketing manager at the right time. MIS collects the information through its subsystems. These subsystems are called components.

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Components of Marketing Information System MIS

The four main components of Marketing Information System (MIS) are:

1. Internal Records,
2. Marketing Intelligence,
3. Marketing Research(MR), and
4. Marketing Decision Support System.

The basic components of MIS are depicted and explained below.

Internal Records

The first component of Marketing Information System is ‘Internal Record’. Marketing managers can get lots of information from the internal records of the organization. These records provide present information about sales, costs, cash flows, inventories, account receivable and account payable. Many organization maintains their computerized internal records. Inside records help marketing managers to achieve faster access to reliable information.

Internal records are information collected from sources within the organization in order to evaluate marketing performances and also to detect marketing problems and opportunities. Most of the marketing managers use internal records and reports consistently, especially for making day-to-day planning, implementation and control decisions. Information from internal records is normally quicker and cheaper to get than information from any other sources, but it also presents some problems. Because internal information was for other purposes so it can be incomplete or in the wrong form while making marketing decisions. 

Marketing Intelligence

The second element of MIS is ‘Marketing Intelligence’. It gathers information from external sources. It provides information about present marketing environment and changing situation in the market.This information can be easily collected from external sources like; magazines, trade journals, commercial press etc.This information cannot be gathered from the Annual Reports of the Trade Association and Chambers of Commerce, Annual Report of Companies, etc. The salesmen’s report also contains information on market trends.

The information that is collected from the external sources could not be used directly. It should be first evaluated and arranged in a proper order. It can be then used by the manager while taking decisions and making different plans and policies about marketing.So, marketing intelligence is major component of MIS.

The total information requirement of the marketing department can be satisfied and specified through a marketing intelligence network. The marketing intelligence system determines the intelligence requirement, collects it by searching in the environment and delivers it to the marketing managers who need it. Marketing intelligence comes from various sources. Much intelligence is from the organization’s personnel - executives, engineers, and scientists, purchasing agents and the sales force. But the people of the organization are often busy and fail to pass on necessary information. The organization must 'sell' its people on their importance as intelligence gatherers, train those people to spot new developments and urge them to report intelligence hack to the company.

The organization should also persuade suppliers, resellers, and customers to pass along important intelligence. The organization may also learn about competitors from what others say about them in business publications and at trade shows. Or the organization could watch what competitors do - buying and analyzing competitors' products, monitoring their sales as well as checking for new patents. The firm also buys intelligence information from outside suppliers.

Marketing research:

The third essential elements of MIS is ‘Marketing Research’.Marketing research (MR) is a proactive search for information. That is, the enterprise that commissions these studies does so in order to solve a perceived marketing problem. In various cases, data and information are collected in a purposeful way to address a well-defined problem (or problem that could be defined and solved within the course of the study). Marketing Research is conducted in order to solve specific marketing problems of the firm. It collects data about the problem. These data are tabulated, analyzed and conclusions are drawn. Then the recommendations are provided for solving the problem. Marketing research also gives information to the marketing managers. However, this information is specific information. It can be used only for a specific purpose. MIS and MR are not substituted for each other. The scope of MIS is very broad. It includes ‘MR’. However, the scope of MR is very narrow.

Marketing decision support system:

The fourth component of Marketing Information System is ‘Marketing Decision Support System’. These are the tools that help the marketing managers to analyze the collected data and to take better marketing decisions. They include hardware, i.e. computer and software programs. The computer helps the marketing manager to analyze and evaluate the marketing information. It also helps them to take better decisions. In fact, today marketing managers could not work without computers. There are many software programs, that help the marketing manager to do market segmentation, advertising ,budgets, price fixing, etc.

Reference

http://www.fao.org/docrep/W3241E/w3241e0a.html

http://kalyan-city.blogspot.com/2013/01/4-main-components-of-marketing.html