Marketing Information System

Definition: The Marketing Information System refers to the systematic collection, analysis,
interpretation, storage and dissemination of the market information, from both the internal and external
sources, to the marketers on a regular, continuous basis.
The marketing information system distributes the relevant information to the marketers who can make the
efficient decisions related to the marketing operations viz. pricing, packaging, new product development,
distribution, media, promotion, etc.

Every marketing operation works in unison with the conditions prevailing both inside and outside the
organization, and, therefore, there are several sources ( viz. Internal, Marketing Intelligence, Marketing
Research) through which the relevant information about the market can be obtained.

Components of Marketing Information System

Internal Records: The Company can collect information through its internal records comprising of sales
data, customer database, product database, financial data, operations data, etc. The detailed explanation of
the internal sources of data is given below:
o The information can be collected from the documents such as invoices, transmit copies, billing
documents prepared by the firms once they receive the order for the goods and services from the
customers, dealers or the sales representatives.
o The current sales data should be maintained on a regular basis that serves as an aide to a the
Marketing Information System. The reports on current sales and the inventory levels help the
management to decide on its objectives, and the marketers can make use of this information to
design their future sales strategy.
 o The Companies maintain several databases such as*Customer Database- wherein the complete
information about the customer’s name, address, phone number, the frequency of purchase,
financial position, etc. is saved.
*Product Database- wherein the complete information about the product’s price, features, variants, is
stored.
*Salesperson database, wherein the complete information about the salesperson, his name, address, phone
number, sales target, etc. is saved.
o The companies store their data in the data warehouse from where the data can be retrieved
anytime the need arises. Once the data is stored, the statistical experts mine it by applying several
computer software and techniques to convert it into meaningful information that gives facts and
figures.
Marketing Intelligence System: The marketing intelligence system provides the data about the
happenings in the market, i.e. data related to the marketing environment which is external to the
organization. It includes the information about the changing market trends, competitor’s pricing strategy,
change in the customer’s tastes and preferences, new products launched in the market, promotion strategy
of the competitor, etc.
In order to have an efficient marketing Information System, the companies should work aggressively to
improve the marketing intelligence system by taking the following steps:

o Providing the proper training and motivating the sales force to keep a check on the market trends,
i.e. the change in the tastes and preferences of customers and give suggestions on the
improvements, if any.
o Motivating the channel partners viz. Dealer, distributors, retailers who are in the actual market to
provide the relevant and necessary information about the customers and the competitors.
o The companies can also improve their marketing intelligence system by getting more and more
information about the competitors. This can be done either by purchasing the competitor’s
product, attending the trade shows, reading the competitor’s published articles in magazines,
journals, financial reports.
o The companies can have an efficient marketing information system by involving the loyal
customers in the customer advisory panel who can share their experiences and give advice to the
new potential customers.
o The companies can make use of the government data to improve its marketing Information
system. The data can be related to the population trends, demographic characteristics, agricultural
production, etc. that help an organization to plan its marketing operations accordingly.
o Also, the companies can purchase the information about the marketing environment from the
research companies who carry out the researches on all the players in the market.
o The Marketing Intelligence system can be further improved by asking the customers directly
about their experience with the product or service via feedback forms that can be filled online.
Marketing Research: The Marketing Research is the systematic collection, organization, analysis
and interpretation of the primary or the secondary data to find out the solutions to the marketing
problems. Several Companies conduct marketing research to analyze the marketing environment
comprising of changes in the customer’s tastes and preferences, competitor’s strategies, the scope of new
product launch, etc. by applying several statistical tools. In order to conduct the market research, the data
is to be collected that can be either primary data (the first-hand data) or the secondary data (second-hand
data, available in books, magazines, research reports, journals, etc.)
The secondary data are publicly available, but the primary data is to be collected by the researcher
through certain methods such as questionnaires, personal interviews, surveys, seminars, etc.

A marketing research contributes a lot in the marketing information system as it provides the factual data
that has been tested several times by the researchers.

Marketing Decision Support System: It includes several software programs that can be used by
the marketers to analyze the data, collected so far, to take better marketing decisions. With the use of
computers, the marking managers can save the huge data in a tabular form and can apply statistical
programs to analyze the data and make the decisions in line with the findings.
Thus, the marketers need to keep a check on the marketing environment, i.e. both the internal (within the
organization) and the external (outside the organization, so that marketing policies, procedures, strategies
can be designed accordingly.
Importance of Marketing Information System
Marketing information system has become an essential part of the marketing decision making process.
Importance of marketing information system can be described as follows:
Closing Information Gap
Expansion of the geographical market coverage from local-to national-to international scale has made
marketing information system vital for day to day operation of an organization. This expansion of the
market coverage has widened the information gap between the organization and its market.

The information need of an organization that operates at the local market level is less than that of an
organization that operates the national market level. The information need of exporters who operate at the
international level is very high, because they operate very far from their market. Marketing information
system provides information on the local, the national and the international markets.

Want Creation and Delivery

Today, marketing goals have changed from understanding and satisfying buyer’s needs to want creation
and delivery. It has posed a greater challenge for organization to more accurately understand the
consumer’s desires located in the subconscious part of the mind.

Marketing has reached a new height where organizations strive to create, mold and modify new desires
and want among the consumers. This requires the organization to undertake intensive consumer research
activities targeted at probing deeply into the mind of consumers. The mind-probing exercise is conducted
to understand the hidden and ungratified desires of consumer groups and stimulating these desires to take
the shape of wants for products.

In the highly competitive world, success of an organization depends on creating wants and delivering
products that specially satisfy the created wants. This new challenge has increased the role of marketing
information system for an organization.
Non-price Competition
Organizations, to-day believe that price competition leads to price cuts, which usually results in a loss not
only to individual organizations but to the industry as a whole. Organizations prefer to compete over non-
price factors, such as product differentiation, image, service and promotion.

Implementation of non-price competition requires a variety of information on consumers’ awareness and

attitude towards the organization’s and competitors’ products, product positions in the market, the
services offered by competitors, effectiveness of promotional tools etc. Such vital information is provided
to the decision makers by the marketing information system.

Environmental Monitoring and Scanning

Organizations need to constantly monitor the movements in the environmental forces, particularly the
economic, competitive, technological and political environment of the market. Changes in any of the
environmental forces bring challenges and new opportunities to the organization.

Environmental scanning process collects vital information on the development taking place in the
environment and prepares the organization to face the threats and capitalize on the new opportunities.
Environmental monitoring and scanning are integral parts of the marketing information system.

Marketing Planning
Marketing planning involves a detailed planning of the marketing activities in relation to the needs of the
target markets. In a competitive market, the success of and organization depends on adequate and
accurate marketing planning. Planning requires variety of information on the market including demand
estimates and sales forecasts, which are supplied by the marketing information system.

Evaluation and Control

Regular evaluation and control of the marketing program are important activities of the marketing
management process. the organization needs to know to what extent its program has been successful, to
what level it has met the desired targets, in what forms modifications and corrections are necessary and so
on. Such information is provided by the marketing information system through regular market monitoring
and occasional market research activities.

Scope of Marketing Information System

o It helps marketing planning by making available correct information on the external environment
and the internal company realities.
o The information if free from any bias towards the pre-conceived conclusion will have more value
than otherwise.
o The information, if free from any error, will have more value than otherwise.
o The quality of marketing decisions is decided to a great extent by the quality of marketing
information available to the decision maker.
o It facilitates the development of action programmes for achieving set goals.
o It helps the controlling of marketing activities.
o It helps effective tapping of marketing opportunities and effective defense against marketing
threats.
o It helps the firm to adjust its product and services to the needs and taste of customers.
o It provides market intelligence to the firm.
o It helps rapid spotting of trends and facilitates the formulation of basic assumptions on economic
and business conditions.