Marketing Information System

A Marketing Information system (MIS) is “a system that analyses and

assesses marketing information, gathered continuously from sources inside
and outside an organisation”.
Marketing Information System (MIS) provides managers and other decision
makers with continuous flow of information about markets, customers,
competitors, and company operations.
A Marketing Information System (MIS) is a set of procedures and methods
designed to generate, analyse, disseminate, and store anticipated marketing
decision information on a regular, continuous basis.
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Learn about:-
1. Introduction to Marketing Information System 2. Concept 3. Meaning 4.
Definition 4. Evolution 6. Characteristics 7. Features 8. Components 9. Needs

10. Subsystems 11. Purpose 12. Importance 13. Kinds. 14. Functions 15.
Inputs 16. Advantages 17. Disadvantages 18. Emerging Trends.

Marketing Information System:

Definition, Functions, Advantages,
Components, Importance,
Characteristics, Needs and Purpose
Marketing Information System – Introduction
Marketing Information System is a Management Information System
designed to support marketing decision making process. It is the system or
way by which market information is formally gathered, stored analysed and
then distributed to the managers in accordance with their informational needs
on a regular basis. It is also a proceeding and interacting structure of people,
producers and equipments to gather, analyse, sort and evaluate information
for use by marketers.
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No one could possibly think of marketing activities taking place in isolation.

Business environment, competition and consumers all dynamic by nature
influence marketing. Further partners, key stake holders and various other
internal factors also influence marketing. Many of these factors are
uncontrollable. Marketing professionals need to design marketing programs
under such an uncertain and dynamic environment.
Marketing department tries to understand the role and impact of these factors
to offset unfavorable situations and harness opportunities. Under such a
situation availability of information is crucial to stay competitive and survive.
Marketing department collects information from various conventional
sources as well as some unconventional sources such as spying.
Since requirement of information is continuous and critical it is suggested to
take system approach towards information management. Marketing
information system (MIS) is a collection of process, methods, tools and
people through which information that supports marketing is collected,
stored, analyzed and disseminated. MIS act as marketing support system and
facilitate marketing managers to take decisions by making valuable
information available to them in precise and timely manner.
Marketing decisions supported by MIS could help organization to outperform
competition and achieve sustainable competitive advantage. Against
convention it is a myth that MIS primarily comprise of Hardware and
software rather any systematic approach towards data collection processing
and generating valuable information and its dissemination to support decision
making could be a MIS. However in today’s information overloaded world
manually processing huge amount of data is not possible, so information
technology backed by computing power has become integrated part of MIS.
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American academic Philip Kotler has defined it more broadly as – “a system

that consists of people, equipments and procedures to gather, sort, analyse,
evaluate and distribute needed, timely and accurate information to marketing
decision makers.” In the modern era of technological advancement, consumer
consciousness and computerized information systems. Marketing Information
System has gained more prominence.
The Marketing Information System encompasses the analyses, planning,
implementation and control function of marketing management. The overall
objective of Marketing Information System is to provide inputs from target
markets, marketing channels, competitors, public and other forces for
creating, changing and improving the market decisions management of a
business enterprise.
A Marketing Information System (MIS) consists of people, equipment, and
procedures to gather, sort, analyse, evaluate and distribute needed, timely and
accurate information to marketing decision makers.

Marketing Information System – Concept

An Information system generates information from data. Data is in the form
of raw material and it is subject to some manipulation to generate useful
information. If a system generates useful information for managerial use in
planning, decision-making and control, it is called as a “Management
Information System”.
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An Information System is a man – machine system that produces information

for use in managerial problem solving and decision-making. A full-fledged
MIS provides for capturing of data at source with desirable accuracy and
processing it to generate information in a usable form for managers.
The purpose of a Marketing Information System is to highlight a situation
requiring a marketing manager’s attention and action. The system collects
data at source about every transaction in every area of activity and stores it
for present or future use. The data items are processed and the information is
either stored or communicated to the users.
A marketing information system is a management information system
designed to support marketing decision-making.
A Marketing Information System (MIS) is a set of procedures and methods
designed to generate, analyse, disseminate, and store anticipated marketing
decision information on a regular, continuous basis. An information system
can be used operationally and strategically for several aspects of marketing.
A marketing information system can be used operationally, managerially, and
strategically for several aspects of marketing.

Marketing Information System – Meaning

Marketing information is the lifeblood of marketing process as marketing
decision won’t be taken in the absence of marketing information. Marketing
decisions are affected by many internal and external environmental variables,
so the marketing decision maker needs a great deal of information related to
these variables. Seeking information about the environment and competitors
is vital for business survival.
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No one single variable can guarantee success, but rather will contribute to
overall organization performance. Information leads to better decision
making especially in this era of fast changing consumer preference, for this
reason management needs to do a lot to acquire, process and transmit
accurate and timely marketing information for better decision making which
will make them gain distinctive advantage, thereby contributing to their
organizational performance.
The marketing success in the organization depends basically on the
availability and the accuracy of marketing information from its multiple
sources. All marketing organizations try to find out and determine the nature
of the markets and their trends, needs and changes that occur in these
markets, as well as try to know the competitors, prices, options and other
marketing information which is the key to success for any marketing
decision. The components of marketing information system (internal records,
marketing research, and marketing intelligence) are the most important
sources in obtaining marketing information.
Marketing information system harnesses data from a set method and
procedures designed by organization in looking at critical information need
of the organization like, information on market trend and sizes, information
on the changing need of customers, information from competitors and the
information on government policies that affect business operations. These
information is basic in identifying , measuring, forecasting and analysing
various market segment as regard to any economic state be it boom or
recession.
The international marketing information system is conceptually very close to
the marketing information system, being its integral part. Consequently, the
international marketing information system is aimed at a systematic and
continuous collection, analysis and provision of all relevant data and
information for making international marketing decisions, as a part of the
company’s marketing information system.

Marketing Information System – Definitions

Marketing Information System has been defined by various authors in
various ways.
According to Phillip Kotler, Marketing Information System is “people,
equipment, and procedures to gather, sort, analyse, evaluate, and distribute
needed, timely, and accurate information to marketing decision makers.”
According to BusinessDictionary(dot)com – A Marketing Information system
is “a system that analyses and assesses marketing information, gathered
continuously from sources inside and outside an organisation”. Timely
marketing information provides basis for decisions such as product
development or improvement, pricing, packaging, distribution, media
selection and promotion.
According to Donald F Cox and Robert E Good a Marketing Information
System may be defined as “a set of procedures and methods for the regular,
planned collection, analysis, and presentation of information for use in
making marketing decisions”. This of course is a step beyond logistics
systems, which handle inventory control, orders, and so forth.”
“A marketing information system consists of people, equipment, and
procedures to gather, sort, analyze, evaluate and distribute needed, timely and
accurate information to marketing decision makers.” – Kotler and Keller
“Marketing information system is a computerized system that is designed to
provide an organized flow of information to enable and support the marketing
activities of an organization.” – Harmon
“Marketing information system may be understood as work on gathering,
forwarding and storing data, as well as research results, aimed at delivering
complete information necessary for marketing decision-making.” – Russ
“Marketing information system is a system in which marketing data is
formally gathered, stored, analysed and distributed to managers in accordance
with their informational needs on a regular basis.” – Jobber
Marketing Information System (MIS) provides managers and other decision
makers with continuous flow of information about markets, customers,
competitors, and company operations. A MIS should provide a means of
gathering, analysing, classifying, storing, retrieving and reporting relevant
data about customers, markets, channels, sales and competitors. A company’s
MIS should also cover important aspects of a company’s external
environment.
Global competition intensifies the need for an effective MIS. Global
companies like Caterpillar, Mitsui, Toyota, ABB, Ford and Texas
Instruments have sophisticated electronic data interchange (EDI) systems to
improve intercompany information sharing. Internet has complemented and
dramatically expanded the ability to access up to date information anywhere
in the world.
MIS acts as a strategic competitive tool. MIS and research function must
provide relevant information in a timely, cost-efficient and actionable
manner. Information systems help geo-centric global companies to meet
challenges in the dynamic world markets, due to political and economic
events.
On the basis of above discussion and definitions given by some renowned
researchers it can be concluded that Marketing Information System is a
structured, interacting complex of persons, machines and procedures
designed to generate an orderly flow of pertinent information collected from
both intra- and extra-firm sources, for use as the bases for decision-making in
specified responsibility areas of marketing management.
Today marketers need to study several important topics in order to make the
most of modern information technology. First, they need to understand the
importance of information technology and marketing information systems as
strategic assets. Second, they need a framework for information scanning and
opportunity identification. Third, they should have general understanding the
formal market research process. Finally, they should know how to manage
the marketing information collection systems and the marketing research
effort.

Marketing Information System – Evolution

Various system for processing information’s have been in use by
organisations for years. As it was typical in the past, the small country store
was owned and operated by one man. The owner was both president and
chief executive undertaking all the functions required to operate the store
including sales promotion, market research, accounting, inventory control,
public relation and so on.
The owner personally gathered all the information necessary to carry out
various functions, either vising it as it was gathered or storing the information
in his memory for later retrieval. Once a decision was made, the owner
usually undertook the necessary action himself.
Within the confinement of a small operation, the owner operated information
system was often very efficient. It made use of highly integrated information
system of the owner himself. Information was expressed and stored in that
system in a form that was readily understood by all the components of
management.
The owner operated information system could also be expected to be efficient
if more than one person worked in the organisation, provided those involved
were relatively closed in their experience and knowledge.
The similarity of purpose and experience of the individuals in such
circumstances usually allow a close communication between them and
facilitate the interaction between their respective stores of information.
In more recent times, an increasing proportion of our affairs has been
conducted by large organisations. Many of the smaller enterprises have been
superseded by large corporation or incorporated into them. Private business
and industry have grown in the size and scope of the national economies of
the leading industrial nations have expanded.
The development of modern economies has a number of effects on the
organisations involved in both public and private sectors. In the first place,
the growth of organisation has made it much more difficult for one man to
control and direct the activities of an enterprise in the manner as the owner of
the country store can do.
As the staff of an organisation increased, the amount of authority that must be
delegated naturally increases too. Responsibility for routine activities and the
accompanying decisions is delegated to managers at the middle and lower
levels of the organisation. Senior management concerns itself with the less
routine activities of planning and policy making.
A necessary counterpart of delegation of authority in the reporting of the
results of the activities that have been assigned, Delegation of authority must,
therefore, be accompanied by the establishment of a communicative channel
through which these results can be reported and discussed. The greater the
degree of delegation, the larger is the number of communication channel
needed as part of the information system.
A second effect of the growth of an organisation is that the breadth of
experience and knowledge of individual members of the organisation tend to
decline. In the early stages of expansion, the owner, president or director of a
small organisations usually does the hiring himself normally choosing person
with whom he can communicate easily and readily.
As the organisation grows, however, the hiring process itself is delegated.
The delegation of authority usually resulted in the hiring process of
individuals with a wider range of characteristics. It is quite common that
individuals with different back ground placed different interpretation upon
information that has been acquired.
This diversity of view point often is a source of strength to an organisation. It
can, however, be a cause of misunderstanding. For this reason, greater
attention to communication between individual members is needed when the
organisation grows in size. This need a particularly acute if the expansion of
the organisation involves geographic dispersion of units.
Another factor with which modern origination must contend is the greatly
increased complexity of the activities in which they are involved. This
complexity is due in most part to the pace and pattern of modern life and has
led to an increased degree of specialization by those who are in organisation.
Increased specialization tend to decrease the amount of knowledge and
experience common among members of an organisation. In addition,
specialization encourages communication between those with similar
backgrounds and decreases passage of information between individuals with
different interest and specialization.
The complexity of external environment in which modern organisation
operate has greatly increased the amount of information that must be
processed within organisation.
The nature of the modern environment has also increased the complexity of
the necessary information handling. A striking example of this increased
complexity is the administration of a company payroll.
The owner of the propriety shop usually paid an employee a previously
agreed upon the amount withdrawn directly from the cash register. The
owner than charged the amount to cost. A modern payroll system has the
same basic function. However, modern social conditions requires that a
payroll system also incorporate a large number of other features.
Modern payroll system are usually required to make deduction from the gross
pay for some of the following income-tax, health care programme, dental
care programmes pension schemes, charitable donation, taxable allowances
and benefit union dues, parking fees, payroll saving plan, garnishment,
disability, insurance, and numerous other social and administrative functions.
As a result, a modern payroll system is very large, and complicated operation
usually requiring computer support to accomplish the necessary data
processing tasks. Organisation have met the demand of the increased
complexity of their activities by diverting an increase proportion of their
effort and resources to administrative task and information system.
In the early twentieth century, the information gathering activities were
devoted almost entirely to reporting the financial condition of the
organisation. As managerial skills developed in economies were introduced
under the general headings of management accounting for evaluation of the
efficiency of subcomponents of the organisation in a market oriented
economy. The early information system were oriented exclusively towards
the financial and managerial accounting functions.
It is note-worthy that the main initial effect of the introduction of the
computer in organisation was an increase in the amount of routine clerical
and data manipulating capacity available to the accounting function. Design
and implementation of information system was often entirely in the hand of
accountants.
The concept of an information system designed to serve a wide range of
managerial function was often given little attention. Primary emphasis at the
time was often given to the work involved in introducing the new computer
supported financial and accounting system.
The idea of information system to guide management decisions predates the
use of computer which have extended the organisation capabilities for
implementing such a system.
Evolution of MIS concept can be summed up by four major areas of system
development. There are Managerial Accounting, Management Science,
Management Theory and computerisation. Indeed the concept of MIS can be
viewed as substantial extension of their concepts.

Marketing Information System – 11

Important Characteristics
Thus, a well-designed management information system is likely to have
following characteristics:
1. MIS is a system, it is a logical grouping of distinct and interdependent
components of information, element assembled for furnishing and generation
of information.
2. It may involve use of manual devices put in frequently manual mechanical
and electro mechanical devices. Often MIS is said to be associated with the
use of computers.
3. The role of MIS is basically that of generating and packaging of
information in the useful quantums of knowledge. The design of management
report embodying such MIS is very important and crucial.
4. MIS is related to organisational levels i.e. it is need based. At top level the
information required is summary in a “Flesh form”. At the lower and middle
levels it is more detailed for exercising day to day control. The frequency of
information furnished will be decided by the need of the management.
The frequency of information is higher at middle and low levels. Besides it is
internally focussed “at the lower and middle level whereas ‘external’ directed
at the top level”.
5. It is associated with the establishment of data bank in a central unit that
computer data close to its origin and connects their input into management
information.
6. Information communication is wide horizontal and vertical, throughout the
requisition. It is necessary therefore, to employ in use sophisticated
communication decision devises.
7. The information supplied is “Exception oriented” showing the level at
which action is required. There are in fact exception which decide when to
report.
8. Information supplied is futuristic i.e. predictive. It primarily aims at giving
a fed for the developed and the trend there of. An effective MIS craves for
“before the fact reporting.”
9. It must involve complete commitment of the executives. There should be
periodical review of the system as the organisation grows or decays.
10. Management get a steady flow of information on a regular basis the right
information for the right people, at the right time and cost.
11. The system is composed of a collection of sub-system with varying
degrees of integration among the parts.

Marketing Information System – Features

For a marketing information system to be a sound source for decision-
making, it should have the following features:
1. MIS should be marketing oriented/directed – The MIS of an organisation
should be so designed as to meet the information needs of the Marketing
Department at all levels so that the marketing objectives are achieved.
2. It should be Organisation Driven – The Marketing Information System is a
support function. Its purpose is to meet the marketing information needs of an
organisation. As such the Marketing Information System should be so
designed that its strategy is derived from the overall corporate strategy.
3. It should be an Integrated System – Marketing Information System views
the organisations marketing information needs from a system’s point of view.
It should blend together databases of all subsystems of the marketing system
and through information interchange integrates the overall marketing
organisation.
4. It should avoid redundancy in data storage – As MIS is an integrated
system, it should avoid unnecessary duplication and redundancy in data
gathering and storage.
5. It should be based on heavy planning – As the design and implementation
of MIS requires heavy investment, such a system should be designed and
implemented only after heavy planning.
6. There should be flexibility and ease of use – The MIS should be flexible
enough to accommodate new requirements. The system should be easy to
operate so that not many computer skills are required on the part of the user
to access information.
7. Distributed systems – Most organisations have their offices, sales outlets,
etc., geographically spread over a wide area. These offices work mostly
independently of its headquarters. However information has to be routinely
exchanged between these offices. In such cases the information system
should be such as can meet the information processing requirements of the
various constituents.
8. Information as a resource – Information is a resource. As such the MIS
should be so designed that the information resources can be shared across
offices and sales outlets and thus increasing the return from investment in
information resources.
Marketing Information System – Components
The marketing information system is an invaluable aid to decision making
and is a specialized subset of the corporate ‘management information
system’. The term ‘management information system’, along with that of
marketing information system, is synonymous with data processing and
forms a framework for managing information that is gathered from both
outside and inside the organization.
The management information system consists of five separate planning
components, namely- Production or Operations; Human Resource
Development; Finance; Logistics and of course
1. The internal accounting system is a system that reports orders, sales,
dispatches, inventory levels and cheques receivable and payable.
2. The market intelligence system is a set of procedures and sources used to
obtain everyday information about pertinent developments in the marketing
environment, largely built up from data like reports from sales representative.
3. The marketing research system is the systematic design, collection,
analysis and reporting of data findings relevant to a specific marketing
situation facing the company.
4. The analytical marketing system analyses marketing data using statistical
procedures and models. This analysis feeds into strategic marketing plans.
Subsystems 1, 2 and 3 are data collection methods, whereas subsystem 4 is an
analytical method. Together they provide a framework for marketing
managers to marshal their thoughts into tactics, and to assist management in
seeing the important elements of a particular situation and examining the
relationships between these elements.
A successful marketing information system provides a structure for analysis,
planning and control of a given set of activities. Creating a management
information system and marketing information system for any business is a
complex, individualized process.
Lancaster and Massingham distinguish between marketing information
system and marketing research. Marketing research is concerned with the
task of generating information, whereas the marketing information system is
focused on managing the flow of information to marketing decision makers.
This distinction is important because information is worthless unless it is
relevant and effectively communicated.

Marketing Information System – Reasons for the Need

of MIS
In the present day of dynamic and competitive market environment, the needs
of Marketing Information System are ever greater.
Following points highlight the needs of marketing information system in
the context of present day situation:
1. To Recognize Market Trends – Marketing Information System helps
managers to recognise market trends in respect of price, designs of products
fashions, etc. Timely information of the market trends enables the firm to
follow the right course of action.
2. To Facilitate Marketing Planning and Control – Effective marketing
planning is required in terms of product planning, pricing, promotion and
distribution. Such planning will be possible only if the firm is possessing
adequate and relevant information. This is possible only through an effective
Marketing Information System.
3. To Ensure Quick Supply of Information – In today’s competitive business
world, a firm has to take quick decisions to cope with the market needs. For
this purpose, it requires fast flow of information; which is facilitated by a
properly designed Marketing Information System.
4. To Improve Quality of Decision Making – Properly designed Marketing
Information System supplies reliable and relevant information. With the help
of computers and other data processing equipments, the marketing managers
can make the right decision at right time.
The reasons for the need of marketing information system can be
summarized in the following points:
1. Competitive Pressures:
They require the Organizations to have the ability to compete, to produce,
and to market developed products more quickly than before.
2. Increase in Consumer Expectations:
The steady increase in consumer expectations and what they expect of
products, in terms of its ability to satisfy their needs, and the consequences of
less serious or inaccurate decision taking due to the lack or inaccuracy of the
information upon which the decision will be built, and its impact on the
organization’s success and sustainability.
3. Emergence of Large Markets:
The widespread production and distribution contributed to the emergence of
large markets, and their requirements of a large number of intermediaries
between producers and final consumers, these intermediaries become a
barrier to the flow of data that can guide the development of marketing
decisions related to the consumers needs and desires, as a result the widening
gap between producers and final consumers reinforce the importance of
marketing information system in bridging this gap.
4. Information Revolution:
Each organization has more than one source of information, but the problem
lies in how to use and manage this information, with the development of
computers and other operating data equipment, it has become quick and
inexpensive for management to run and analyze vast amounts of marketing
data and provide information necessary for effective decisions.

Marketing Information System – Top 4 Subsystems of

a Well Designed MIS
A well-designed market information system consists of four subsystems:
a. The first is the internal records system, which provides current data on
sales, costs, inventories, cash flows, and accounts receivable and payable.
Many companies have developed advanced computer-based internal reports
systems to allow for speedier and more comprehensive information.
b. The second market information subsystem is the marketing intelligence
system, supplying marketing managers with everyday information about
developments in the external marketing environment. Here a well-trained
sales force, purchased data from syndicated sources, and an intelligence
office can improve the quality and availability of marketing intelligence
flowing to company marketing managers.
c. The third subsystem, marketing research, involves collecting information
that is relevant to specific marketing problems facing the company. The
marketing research process consists of five steps – defining the problem and
research objectives; developing the research plan; collecting information;
analyzing the information; and presenting the findings. Good marketing
research is characterized by the scientific method, creativity, multiple
methodologies, model building, and cost/benefit measures of the value of
information.
d. The fourth system is the Marketing Decision Support System (MDSS
marketing system) that consists of statistical and decision tools to assist
marketing managers in making better decisions. MDSS is a coordinated
collection of data, systems, tools, and techniques with supporting software
and hardware. Using MDSS software and decision models, the organisation
gathers and interprets relevant information from the business and the
environment and turns it into a basis for marketing action. MDSS experts use
descriptive or decision models, and verbal, graphical, or mathematical
models, to perform analysis on a wide variety of marketing problems.
To carry out their responsibilities, marketing managers need estimates of
current and future demand. Quantitative measurements are essential for
market opportunity, planning marketing programs, and controlling the
marketing effort. The firm prepares several types of demand estimates,
depending on the level of product aggregation, the time dimension, and the
space dimension.

Marketing Information System – Purpose of MIS to

Marketing Managers (3 Main Sources)
The information needed by marketing managers that serves as input to
MIS comes from three main sources:
1. Internal Company Information:
E.g., sales, orders, customer profiles, stocks, customer service reports, etc.
2. Marketing Intelligence:
Marketing intelligence is a set of procedures that marketing people use for
continuous monitoring and gathering information about developments in the
market that helps them to prepare and adjust their marketing plans. This can
be information gathered from many sources, including suppliers, customers,
distributors, reading newspapers, trade magazines, surfing internet etc.
It is possible to buy intelligence information from outside suppliers (e.g. IDC,
ORG, MARG) who set up data gathering systems to support marketing
intelligence requirements of all players in a market and sell these information
as product to them. More recently marketing intelligence has gained
considerable importance primarily due to its capability to underpin strategic
success.
Marketing intelligence coupled with competitive intelligence (gaining quick
information about competitors through formal and informal channels) is
collectively referred as Boundary Spanning. Boundary spanning strategy is
using marketing intelligence and competitive intelligence in tandem with
internals information sources to develop and execute business plans to gain
competitive advantage.
3. Market Research:
Management cannot always wait for information to arrive in bits and pieces
from internal sources. Also, sources of market intelligence cannot always be
relied upon to provide relevant or up-to-date information (particularly for
smaller or niche market segments). In such circumstances, businesses often
need to undertake marketing research either conducted in-house or
outsourced as specific studies to support their marketing strategy.
A typical Marketing Information system integrates various functions of
marketing so well that entire marketing works seamlessly. The information
between various participating parties flows smoothly and caters their
respective needs in timely and effective manner leading to an overall
improvement of marketing productivity.
James O’Brien a well-known author in Management Information
System has proposed following components of marketing information
system:
1. Interactive marketing
2. Sales force automation
3. Marketing research and forecasting
4. Customer service and support
5. Advertising and Promotion
6. Product management
7. Sales Management.
Marketing Information should not be approached in an infrequent and
unsystematic manner.
If information management is done this way, a firm could face following
problems:
1. Market opportunities may be missed.
2. There may be a lack of awareness of environmental changes and
competitors’ actions leading to revenue loss.
3. Marketing actions may be reactionary rather than anticipatory and
proactive.
4. Data collection may be difficult to analyze over several time periods.
5. Marketing plans and decisions may not be properly reviewed.
6. Previous studies may not be stored and made available as and when
required.
The information management of a marketing department typically
comprises of three steps that are as follows:
1. Data Creation – This could be of following two types –
(a) Continuous monitoring – It is the procedure by which the changing
environment is regularly viewed and data from various internal and external
sources are captured.
(b) Marketing research – Used to obtain information on particular marketing
issues.
2. Data warehousing – Involves the retention in integrated manner of all types
of relevant company records and information collected through continuous
monitoring and marketing research.
3. Dissemination – Analyzing the stored data in warehouses, making relevant
and useful information available to managers for decision making.
Depending on a firm’s resources and the complexity of its needs, a marketing
intelligence network may or may not be fully computerized. The ingredients
for a good MIS are consistency, completeness, and orderliness. Marketing
plans should be implemented on the basis of information obtained from the
intelligence network.
A Marketing Information System offers many advantages:
1. Organized data collection.
2. A broad perspective to market, competition and consumers.
3. The storage of important data over a period of time.
4. An avoidance of crises by retrieving critical data quickly.
5. Comprehensive and coordinated marketing plans could be developed and
executed with little effort.
6. Speed in obtaining sufficient information to make decisions.
7. Offers capability to do a cost-benefit analysis.
The disadvantages of marketing information system are:
1. High initial time to design and implement MIS and train users.
2. High labor costs on continuous basis to design develop and maintain the
MIS.
3. Complexity of setting up an information system.
4. Information overload to managers. Marketers often complain that they lack
enough marketing information of the right kind, or have too much of the
wrong kind.
However a marketing information system that is well designed and has strong
in built analyzing capability is the solution all above problems because
rewards of an efficient and effective MIS outperform the associated costs. At
the end we could only say that it just the beginning of an internet along with
Information technology driven age where paradigms of marketing are
expected to change beyond expectation. Sitting in this time it would be
difficult for any prophet to describe in what ways our life will be altered.

Marketing Information System – Benefits

A Marketing Information System is important as it offers the following
benefits:
1. Aids in Recognising Trends:
A good marketing information system helps a marketing manager to
recognise changing market trends. Trends are constantly changing and a
marketing manager should be able to predict and respond to the changing
trends. The changing trends may be in respect of prices, product design,
packaging, promotion schemes, etc. A Marketing Information System helps
managers to take effective marketing decisions in respect of prices, product
designs, etc., in response to changing trends in the environment.
2. Help Managers to Recognise Change:
A sound marketing information system will point out the changing trends and
thus aid a marketing organisation to change the product mix or to introduce a
new line according to the changing market demand.
3. Instant Supply of Required Information:
Marketing is a dynamic function and a marketing organisation needs to
respond quickly to the various changes taking place in the marketing
environment. Here the Marketing Information System helps the marketing
manager by supplying the required information in a quick and timely fashion,
leading to effective decision-making.
4. Quality of Decision-Making:
Decisions have to be taken in every area of marketing by a marketing
manager every day. A properly designed marketing information system
promptly supplies reliable and relevant information. With the help of this
information, the marketing manager can make the right decisions at the right
time.
5. Facilitates Marketing Planning and Control:
An effective Marketing Management System makes it possible for a
marketing manager to effectively plan and control all marketing activities.
Marketing planning with respect to product planning, price planning and
decisions, promotion and distribution is made more effective through the use
of the Marketing Information System, as decisions related to all such aspects
are taken on the basis of scientifically collected and analysed data and not in
a vacuum.
6. Provides Marketing Intelligence:
Marketing intelligence refers to information of the events that are happening
in the external environment, i.e. changes in customer tastes, expectations,
competitors strategies, government policies, international environment, etc.
With the help of MIS specialists, it is possible to collect marketing
intelligence which is vital to make effective marketing decisions.
7. Integration of Information:
Large firms with widespread marketing departments can gather information
which is scattered at many centers or and integrate it for effective decision-
making. Such integration is possible if there is a centralised MIS.
8. Tapping of Business Opportunities:
An effective Marketing Information System helps a marketing manager in
tapping, untapped markets. It thus makes available business opportunities to
the Marketing Manager.

Marketing Information System – 3 Main Kinds of MIS

There are three kinds of systems namely:
i. Marketing control system – It provides the management information
relating to the trends and problems in the market as also the marketing
opportunities. The system is useful for controlling the marketing cost and
finding out reasons for poor sales.
ii. Marketing planning system – It furnishes information required for future
planning of products in a most convenient and intelligible form. The
problems handled by this system are sales forecasting, promotional planning,
credit management, etc.
iii. Marketing research system – This is useful for analysing and solving
current marketing problems. It measures characteristics of different types of
customers and their behaviour. Marketing research handles problems
concerning advertising, price, etc.
Marketing Information System – 7 Main Functions
Marketing information system performs various types of functions as
follows:
1. Market Identification Function – The determination of potential buyers and
their characteristics is vital in order to satisfy their needs and desires. This
enables the marketer to know –
a. Where the buyers are located?
b. When do they buy?
c. How frequently do they buy?
d. In what quantity do they buy?
2. Purchase Motivation Function – An assessment of various social,
economic and psychological forces which influence the purchase behaviour
of the market is made under this function.
3. Product Adjustment Function – This function includes all such activities
which are necessary to match the product/ service offerings with the market.
4. Physical Distribution Function – The actual movement of goods from the
production centre to the point of consumption is considered in this function.
5. Communication Function – This function includes decisions on
advertising, personal selling, sales promotion, publicity, packaging issues,
etc.
6. Transaction Function – It includes all such activities which are needed to
facilitate the transfer of ownership title of goods/ services between parties in
a transaction.
7. Post Transaction Function – In this function, feedback about the
performance of the product/service is obtained from the customers, so that
customer satisfaction can be ensured.
Marketing Information System – 3 Inputs to the MIS
The three inputs to the marketing information system are examined
individually:
1. The Internal Accounting System:
Internal company data can be a fruitful source of information, but it is often
not fully utilized. The data collected in the form of database about the daily
operations of the companies, and includes the necessary data records to
obtain information regarding the scale of activity and the current performance
in sales, cost, inventory and cash flow…. etc.
Sources of information available from the internal accounting system are
multifarious and represent the most obvious data that can be of use within the
marketing information system. Other departments can input valuable data and
such information can be collected from Research and Development, Human
Resource and Production in particular where measures of output and
productivity can be used.
2. The Market Intelligence System:
The market intelligence system is concerned with collection and analysis of
ongoing developments in the marketing environment. This is normally
regarded as a sub-set under marketing research where it is referred to as ‘desk
research’. However, it is logical to consider it as a component part of the
marketing information system here, so marketing research follows later. The
main sources are secondary data sources, the principal ones of which are now
summarized.
3. The Marketing Research System:
This is the final input to the marketing information system and the method
used can be one, or a combination of survey research, observation and
experimentation.
i. Survey Research:
Survey research is a method of market research that is generally used to
collect primary data. It is based’ on questioning an audience or segment of
the market. Market surveys are conducted to gather information about
products and services in order to analyse and understand customers’
behaviour.
Market surveys are an important part of market research that measure the
feelings and preferences of customers in a given market. Varying greatly in
size, design, and purpose, market surveys are one of the main pieces of data
that companies and organisations use in determining what products and
services to offer and how to market them.
ii. Observation:
While collecting primary data, sometimes it is not just the obvious but the
implicit that also needs to be incorporated. Individual responses collected
through surveys sometimes need to be supplemented with observation that
incorporates people’s actual behaviour. When the consumers’ buying
decisions are videotaped it becomes possible to observe how they buy a
product. This gives a more accurate picture of consumers’ buying habits and
shopping patterns.
A major advantage of observational techniques is that they may be used
without the observed respondent’s knowledge. This is particularly useful
when such knowledge would influence or bias the results, or where perhaps
respondents would not be willing to participate at all. Understandably, use of
observation without the knowledge of the respondents raises a number of
ethical and legal issues.
iii. Experimentation:
This is a more formal approach to primary data collection. As in any
experimental design, the essence of this approach is to determine causal
relationships between factors and to support or refute hypotheses about these
relationships. The most usual marketing research application is that of test
marketing. This is a technique in which the product under study is placed on
sale in one or more selected localities or areas and its reception by consumers
and the trade is observed, recorded and analysed.
Performance in test markets gives some indication of performance to be
expected when the product goes into general distribution and it includes
likely sales and profitability of the product when marketed on a national or
international scale, and feasibility of the marketing operation, meaning the
soundness and integration of all elements that enter into it.
It is often an economic necessity to reduce new product risk by using one or
more small and relatively self-contained marketing areas, wherein the
marketer can apply a full-plan marketing strategy in order to gain at least a
reasonably reliable indication that the product can be sold profitably in the
eventual total marketplace.
The problem with the experimental approach to marketing is the difficulty of
designing and administering the experiment in a scientific way. It is difficult
controlling extraneous factors that might affect test results. The marketer may
want to use experimentation to assess the impact on sales of different prices.
It would seem relatively simple to do this by running several test markets
using different prices while holding the other elements of the marketing mix
constant. In these circumstances, any differences in sales between the test
markets would be purely down to differences in prices.
Internal Records:
Internal records provide an input to the marketer for their marketing decision
making. Right from order to payment cycle to the sales data to prices to costs
to inventory levels to receivables and payables, all these information play a
key role in decision making process.
a. Order to Payment Cycle:
Order to payment cycle is the heart of the internal record system.
Distributors, dealers, retailers send the orders to the company. On the basis of
these orders, production and inventory calculations are made to produce and
supply at the desired level. In the era of internet, intranet and extranet; the
process has become much faster, accurate and efficient.
b. Sales Information System:
Similarly, timely and accurate reporting on current sales is helping the
companies to be at the right time, with the right product and with the right
quantity. All the dealerships of Maruti Suzuki are connected through extranet
and minute by minute information is updated, so that you get your white
Swift or red A-Star or your blue Wagon-R in time.
c. Databases, Data Warehousing and Data Mining:
In this information age, when there are a lot of databases like customer
database, product database, sales persons database etc.; it is important that
databases are managed and warehoused properly. Once databases are stored,
it can be mined on the basis of marketing information required.
In India, ICICI Bank is using the techniques of data mining to acquire new
customers. These customers may be totally new to ICICI or in most of the
cases; ICICI Bank taps their customer base and offers them various other
services. For example: If you are having an ICICI Bank Account, you have
special privilege offers from the bank for new services like Home Loans, Car
Loans, Credit Cards, Personal Loans and others.
ICICI Bank has also got Loan on Phone Scheme and Pre Approved Offers
into each of their services; so that the relationship with the customer can not
only be maintained, but can also be expanded with new service offerings.
Ultimately in the long run, the business of ICICI Bank will grow manifold by
using the data mining techniques.
d. Marketing Intelligence System:
In the era of cut throat competition and information overload, the company
needs to put in place an effective and efficient marketing intelligent system. It
helps the company in understanding today’s and tomorrow’s customer needs
better.
‘A marketing intelligence system is a set of procedures and sources,
managers use to obtain everyday information about developments in the
marketing environments. Marketing Managers collect marketing intelligence
by reading books, newspapers and trade publications; talking to customers,
suppliers and distributors; monitoring social media on the internet via online
discussion groups; e-mailing lists and blogs; and meeting with other company
managers.’ – Philip Kotler
The success of marketing intelligence system lies on the following:
i. Distributor, Dealers, Retailers:
Distributors, dealers and retailers are the backbone of the marketing
information system. They can provide data on day to day happening of the
market, as they are aware about the company as well as the competitors. Most
of the times, retailers keep multiple products at their shop. These retailers can
give the information needed by the marketing intelligence system.
Many companies are also hiring mystery shoppers to gauge the customer
experience and service quality, all across the world. But who is a mystery
shopper?
A Mystery Shopper is like an undercover agent. Your job is to evaluate a
business – either through onsite visits or telephone calls – as if you were an
actual shopper or potential customer looking for a particular service. You
need to evaluate and provide feedback about the greeting and attitude of store
employees and the location’s appearance.
Bare International is one of the companies, who are helping the companies to
understand the market better in India and 100 other countries in the world.
Companies like Bare International assign shopping research assignment to its
affiliated shoppers.
Each mystery shopping research assignment is different because each of their
clients are different, right from restaurants to gyms to department stores to
multiplexes to telecom services provider to car dealerships to something else.
Mystery Shoppers learn specific information about individual businesses
prior to each assignment, so that evaluations are performed correctly. So, if
you want to enjoy movie at a multiplex free of cost or you want to go
shopping without paying anything, then you can also become a mystery
shopper by joining an organisation like Bare International
(www(dot)bareinternational(dot)com).
ii. Sales Force:
Sales force is the link between the company and the distributors, dealers and
retailers. The effectiveness of these distributors, dealers and retailers in
providing information, is also dependent on the company’s sales force. As the
sales force is the first hand contact in the company, it can be very useful in
providing the correct information.
iii. An Eye on Competition:
In today’s era of cut throat competition, a company needs to be careful all the
time as the competition can take the fizz away from you. That’s why
‘Successful companies design and operate systems for gathering continuous
intelligence about competitors.’
A company needs to network itself not only with the distributors, dealers,
retailers and sales force. But it should also look out for information through
social networking sites and industry specific websites. It can also gather
information through road shows and trade fairs.
iv. Customer Advisory Panel:
Customer advisory panel can do wonders for the company. In top B-schools,
there is an advisory panel to provide valuable insight into the course
curriculum. In Indian Railways also, there is a system of customer advisory
panel. In almost all the retail operation, a process of customer feedback is
maintained for better insight into the business.
v. Governmental Data:
Governmental data forms the basis of marketing calculations including
market forecast. The census of India provides the biggest source, besides the
National Sample Survey Organisation (NSSO) data, Economic Surveys,
Industry specific surveys and others.
vi. Private Data Sources:
Market research firms provide a lot of data to the companies. In India, ORG-
MARG, A C Nielsen, IMRB, TAM Media Research etc. provide syndicated
research data.
vii. Online Customer Feedback System:
Online customer review forums like mouthshut(dot)com and industry specific
sites like motoroids(dot)com, team-bhp(dot)com, autocarindia(dot)com,
Vicky(dot)in, zigwheels(dot)com etc. for automobile industry,
techtree(dot)com, tech2(dot)com, technoholic(dot)com, thinkdigit(dot)com
etc. for technology can provide a lot of input for marketing. Blogs are also
turning out to be a major source of customer feedback now.
A company needs to be proactive in using these resources. The management
needs to be involved in getting the market updates. These updates can shape
the marketing strategy and its implementation in a better way.

Marketing Information System – 7 Main Advantages

With an increasingly competitive and expanding market, the daily
information need of every business enterprise is profound. It is therefore
imperative that every business enterprise develops its own Marketing
Information System.
The advantages which an organisation enjoys from Marketing
Information System are discussed below:
1. Organised Data Collection:
It is possible to collect lots of data from the market. But what management
requires for effective decision making is the availability of ‘organised’ data.
To ensure effective managerial decision, organising of data in various groups
and sub-groups as per needs of the organisation is very important; else the
data are meaningless. The Marketing Information System helps to organise
the firm’s database thereby improving its productivity.
2. A Broad Perspective:
With a proper Marketing Information System in place, the whole organisation
can be tracked which can used to analyse independent processes. This helps
in establishing a broader perspective enabling the management to know
which step can be taken to facilitate improvement.
3. Storage of Important Data:
Stored data often serve most crucial need of management. For example,
several times in pharmaceuticals, when one drag is being produced, they may
need data of another drag which was produced years back. Similarly, in
Media, photographs are stored in archives. This storage of important data
plays a crucial role in execution and thus proves that Marketing Information
System is important not only for information but also for execution.
4. Avoidance of Crisis:
The best way to analyse a stock (Share Market) is to see its past performance.
Top websites like money control thrive on Marketing Information System.
Similarly, Marketing Information System helps management to keep tracks
of margins and profits. With an amazing information system established,
management can know where the organisation is moving at a point of time;
which helps it to avert a crisis long before it takes place.
5. Co-Ordination:
Consumer durables and Fast Moving Consumer Goods (EMCG) have huge
number of processes which needs to be co-ordinated. These companies
depend completely on Marketing Information System for the proper running
of the organisation. There are dedicated people for Marketing Information
Systems in such organisations. This is mainly because of the speed required
to access information and implement them.
6. Analysis and Planning:
Marketing Information System is critical for planning we cannot do planning
without adequate information. For planning, the first thing needed is the
organisation’s capabilities, then the business environment and finally
competitor analysis. In a proper Marketing Information System all these are
resent and are continuously updated. Thus, Marketing Information System is
very important for planning and analysis.
7. Control of Execution:
Just as the Marketing Information System helps in a crisis, in normal times as
well it serves as controlling device as the management has information of the
various ongoing processes and what is happening across the firm. Thus, it
provides management with sense of control.

Marketing Information System – 3

Major Disadvantages
The application of marketing information system in organizations, faces
some problems, the most important of them are:
1. Possibility of Bias of the System:
The system depends basically, on individuals in the supply, summary,
generation, and dissemination, and interpretation of data. The possibility of
bias of the system in terms of providing data that support preferred actions,
rather than evaluating all possible actions has been raised.
Analysts have drew attention to the inaccuracy of the organizations research
for the use of information, the goals of individuals may be a particularly
important factor for the objectiveness of marketing information system in
managing the operation of providing the information to choose among
alternatives, and making planning decisions.
Managers who use the marketing information system data may impose their
private choice on the information, as well as on the ways of manipulating,
them. It should be noted that there are many obstacles that prevent the free of
flow of information, such as fear of the implementation, and personal
reasons, mainly from the standpoint of self-protection within the
organization.
2. Perception of Marketing Information System as an Innovation:
Marketing information system faces interactions problems especially in the
stages of creation and developments of the system. In addition to other
problems related to planning and control, there is die problem of the degree
of change resistance that can be directed to this change in different kinds of
circumstances, which is the result of the new entity existence or evolution as
an innovation. Change is one of the main causes of organizational conflict in
terms of creating tension and anxiety which lead to resistance and then the
struggle to avoid or change the direction of change.
3. Nature of the Organizational Environment:
One of the problems facing the use of marketing information system is the
way in which institutional relations hinder the use of marketing information
systems. Kotler described 23 cases of potential conflict between sections
resulting from the various assertions placed on certain matters by the various
departments in a way that reflect personal approaches of individuals, as well
as differences in goals between departments.

Marketing Information System – Emerging Trends

Information system in an organisation is like the nervous system in the
human body that integrates the various components of the organisation in a
single whole.
Recently because of rapid change in the management system, information
systems have undergone rapid developments such as-
i. Manual Reporting System:
In Manual Reporting System, this flow is in the form of periodical progress
reports from the lower levels in the organisation to the higher levels and the
communication of decisions from the higher to the lower levels. The reports
received from the operational levels are consolidated and summarised at each
higher level.
The main purpose of these reports are to ensure accountability and work
productivity. Often, targets of work are assigned to the operational staff and
the report highlights the comparison of actual performance with the assigned
targets. In this way it may also provide the basis for measurement of
performance of the operational staff.
Despite a number of draw backs in this process the periodical reports may be
used for long term trends and general awareness on the part of the operational
system at lower levels.
ii. Centralised Batch Processing System:
The widespread use of second generation computers during the sixties
brought about centralisation of information processing. The centralisation
brought about by the computer was not due to any advantage of centralisation
but to take advantage of the economies of scale associated with the computer
processing.
In this process the documents from various department were to be lend to a
central information system department and the processed on computer to
generate detailed because it was not possible to afford computer at every
level.
It is based on periodical information from lower levels, retained the basic
character of manual system i.e. the periodic flow of information computer
helped in availability of information in shorter time. It made the quick use of
information in decision making and preparing plans and programmes of long
term nature.
Unfortunately, this system has a number of demerits such as transforming
process of documents from various sets to the central computer and their
verification there requires a lot of time. This results in delay in taking
decisions on the basis of the results of this process.
iii. Real Time System:
Real time system became possible with developments in Computer system by
way of reserving the informations in reserve memory. All the relevant data
files and a complete set of programmes are stored in the central computer.
The terminal operators have to sue only a simple command language which
selects the appropriate modules of computer program.
The program module located the relevant data on the file and makes it
available to the operators. The two basic operations, performed from the
terminal are ‘Query’ and ‘Update’. While the query operation involves the
reference to an item of data in file, the update involves a change in the status
of that data.
It is an effective and prompt method mainly used in the west for operations,
such as, banking insurance, marketing, production, planning and control,
railway, reservation etc. In practice, both batch processing and real time
system use files of data separate for each application stored on computer
media.
While batch processing basically requires the sequential access of records,
real time systems used facility of random access of an isolated records from
the file.
iv. Data Base System:
A data system is a collection of interrelated data which are independent of
application program and which can serve many application, present and
future. It may contain all the data items otherwise stored separately in the
employee file, department file and the project file without redundancy.
The data items are organised into a logical structure called ‘Schema’. This
structure defines the logical relationships between entities. For example, an
employee must belong to one and only one department but he may be
working in one and more projects simultaneously.
A department may have more than one employee and the salary of each
employee in the department comes from the department budget. These logical
relationships are known to the data base system software and they are not just
treated as isolated data items as in the file system.
Data base system provides an integrated view of data which is particularly
useful for higher levels of management. It can handle unplanned queries,
provides a logical view of data which is consistent with the physical reality
and eliminates the frequent needs of change in the application programmes
due to changes in the organisation of data.
Dynamic Restructuring of data base is possible as new types of data and new
applications are added independent of existing application program. This
system is proved to be useful for the large corporations.
v. Decentralised Processing System:
Decentralised Processing system was evolved to take advantage of data base
technology and economy of scale in data storage on the one hand and
inexpensive processing devices on the other hand. National Information
Centre of the Govt. of India is one such system in the country.
The main large computer is used at top and a number of small mini and micro
computers have been installed at various department of the Govt. of India.
The central computer would maintain data bases of interrelated data
originating from more than one departments.
vi. Distributed Processing System:
In the Distributed Processing System, the information processing in the
organisation is distributed amongst various functional departments, each
having its own independent computer.
There is a need among these computerised centres to share the computing as
well as information resources. One department may like to refer to the files
maintained by another department.
One of the centres may have a specific programme which the other may like
to use occasionally. Therefore, they need to be connected in a suitably
designed network.
Corporate method of distributed processing designed for specific applications
in business and governments are different from sources sharing network. This
network may have vertical distribution, horizontal distribution or some
combination of vertical and horizontal distribution.
vii. Distributed Data Base System:
In Distributed Data Base System, data are physically distributed among
processing centres but are structured in an integrated logical frame work or
schema. In a traditional data base system programmer or user refers to a
logical record or files. The data base software derives that records from the
physical records.
The same is true in a distributed data base system, but now the data might be
in a distant location and the system has to find them. The user does not want
to know where the data are stored. He merely refers to a logical records and
expects it to be provided.
The distribution and networking should be completely invisible to them.
Distributed data base may consist of a local data base and global data base
software at each location