Commonwealth Law College - Department of Business Studies

MBA- MARKETING MANAGEMENT (LECTURE: -2- 24.10.05)

Marketing information system

Information for competitive advantage

Competitive advantage can be achieve through the use of information:
Customer service: The heart of marketing concept- can provide competitive advantage over competitor.
Information about market, consumer, competitors and to identify the need and gap in the market.
Help in differentiation - to differentiate the product and services from that of competitors.
Business organizations can standardize their products and services too.
HOW? By maintaining the data about consumers, their buying habit, monitor the movements of
competitors, buying behaviour, consumer attitude.
‘Good information system may provide organizations with new opportunities.’

Setting the scene: why is it required?

Every organization requires the information to take any business decision.
Information: process analyze present the findings

This is an information age: information is required for any kind of business from consumer goods to
industrial products.
Knowledge base economy: knowledge about market,
Economic condition, feasibility study and above all new ideas.
E.g.: Goggle, eBay, yahoo all the.com companies, Apple I Pod

Concept and component of marketing information system:

A marketing information system consists of people, equipment, and procedures of gather, sort, analyse,
evaluate and distribute the needed, timely, and accurate information to marketing decision makers (Kotler,
1999)

The collection, organisation and analysis of marketing information are the responsibility of a marketing
information system in itself is a part of the hierarchy of information system that exists within organisation.
The information collected, organised and analysed by an MKIS will typically include the following.
- Details on consumers and markets
- Sales- past, current and forecast
- Production and marketing cost
- Data on the operation environment: competitors, suppliers, distributors and so on

Internal record system: This part of record MKIS utilises the internal records of the company-
information on cost, production, schedules, orders, sales and some type of financial information relating to
customer.

Though these records have been generated for some other purpose, they provide an invaluable insight into
the current situation of the company. Many of these records are stored in computerised database and
therefore storage, retrieve and analysis of such record is relatively easy.

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 Com
ponentsofM
KIS

Internal
reportingsystem

M arketing M arketing
intelligence D
ecision - research
system . making system

A nalytical
m arketing
system .

Source: (CIM, 2004)

Marketing
Managers Marketing Information System Marketing
Environment

Analysing Developing information

Assessing
Internal Marketing Target markets
Information
Needed records intelligence
Marketing
Planning channels

Implementati Competitors
Distributing
on Marketing Marketing
information Publics
decision Research
support
Control Macro enviro-
Analysis
nment factors

Marketing decisions and communications

Source: (Kotler, 1999)

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 Customer service data
Service records
Customer complaints
Help-line calls

Out bound logistic data Sales and marketing data

Finished goods inventory Marketing lead and prospect
records data
Warehouse inventory Sales commission records
records Quotation system records
Shipping records Marketing Order entry system
Decision Account receivable systems
Making

Production and operations data

Production schedules and delays Inbound logistic data
Production costs Bid received
Rework and modification records Purchasing and accounts payable
systems
Receiving systems
Raw materials and parts inventory
system

Marketing intelligence system: marketing intelligence system is the set procedures and sources used by
managers to obtain everyday information and potential developments in the marketing
environment.
This system collect and stores the information about the external environment information such as industry
reports, competitors marketing materials and competitor’s quotes.
Managers can scan the environment in four ways:

1. Undirected viewing: having general exposure to information with no specific purpose in view.
2. Conditional viewing: directed exposure
3. Informal search: an unstructured effort to obtain specific information
4. Personal search: a deliberate effort with a plan, procedure, or methodology to obtain specific
information.
Marketing managers carry on marketing intelligence mostly their own by reading books, newspapers and
trade publications, talking to customers, suppliers and other outsiders.

Marketing research: The collection, analysis and communication of information undertaken to assist
decision-making on marketing (Alan Wilson, 2002).

“The investigation and gathering, recording, and analysis of data pertinent to a specific issue.”
“The systematic gathering, recording, and analysing of market information for management decision-
making purposes.”
“The facilitating function of collecting and interpreting data on consumer demands and characteristics
so that firms can develop new products and sell existing ones profitably.”

Market research:
A systematic collection, analysis, and reporting of data about the market and its preferences, opinions,
trends, and plans, used for corporate decision making.

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Organizations use sample surveys, polls, focus groups, and other techniques to study market
characteristics (e.g., ages and incomes of consumers; consumer attitudes) and improve the efficiency of
sales and distribution. Development of new products, opening of new markets, measurement of advertising
effectiveness, and knowledge of business competitors are among its basic aims. Developed in the United
States in the early 20th century, the field expanded rapidly after World War II, spreading to Europe and
Japan.

Marketing research can be classified as:

Market research: Forecasting demand, Sales forecast by segment, analysis of market share, market trend,
industry trend, acquisition and diversification.
Product research: new product development, analysis of substitute products, and comparison of
competitor’s products. Test marketing, product extension, packaging design testing, and product testing of
existing product.

Price research: competitor’s price analysis, cost analysis, profit analysis, market potential, sales potential,
sales forecast volume), customer perception of price, price –demand relationship, discounting and credit
terms.

Sales promotion research: Analysis of the effect of campaigns, monitoring/analysing advertising media
choice, evaluation of sales force performance etc.

Distribution research: planning channels of distribution, design and location of distribution centres, in
house logistic vs. outsourcing, export/international studies.

Promotion research: motivation research, media research, copy research, advertising effectiveness,
competitive advertising studies, public image studies, sales force compensation studies, sales force quota
studies, sales force territory studies and studies of premiums, Coupons deals etc.

Buying Behaviour: brand preference, brand attitude, product satisfaction, purchase behaviour, purchase
intentions, brand awareness and segmentation studies.
Summary of marketing research process
Define the problem and research
objectives

Develop the research

plan

Collect and process the data

Analyse and interpret

the data

Report on the
findings

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Secondary data: the secondary data collection process is also known as desk research. Secondary data
consists of the information that already exists somewhere, having been collected for another purpose.
Secondary data can be collected from many sources such as internal sources (within the company),
government publication. Periodical books and from commercial data.

Primary data: primary data consists of the original information gathered for the specific purpose. Primary
data cancan be collected in four ways:

1. Observational research: fresh data can be gathered by observing the relevant actors and settings.

2. Focus group interview: A focus group is the gathering of six to ten persons who are invited to
spend few hours with a skilled moderators to discuss a product, service organization or any other
marketing entity.

3. Survey research: survey research is the midway between observational research and focus-group
research, on the one hand and experimental research on the other hand. Focus group is best
suitable for exploratory research.

4. Experimental research: the most scientifically valid research is experimental research.

Experimental research calls for selecting matched groups of subjects, subjecting them to different
treatments, controlling extraneous variable, and checking that the observed response differences
are statistically significant.

In research plan decision need to be made under the following headlines.

Data sources Primary data (data collected by organisation’s

itself), Secondary data
Type of data required Continuous/ad hoc
Quantitative (numbers)
Qualitative (important insights)
Research methods Observations
Focus group
Survey
Experiment
Research tools Interviews (semi structured, unstructured, open vs.
closed questions)
Questionnaires
Mechanical tools (video, audio)
Sampling plans Sampling units
Sample size
Sample procedure
Contact methods Telephone
Mail
Face to face

Information, technology, markets and marketing

ICT (INFORMATION &COMMUNICATION TECHONOLOGY) has change the traditional way of

business. E.g. British Textile Industry - off shore manufacturing
This presents new market opportunity as well as competitor threats.
New technology increase the opportunities to develop GLOBAL MARKET, for what once may only have

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 been local products and services.

Marketing management and information:

It can be summarized by using the acronymAPIC
A- Analysis
P- Planning
I- Implementation
C- Control

1.Analysis:
 Marketing function begins with the complete analysis of
 Company's present situation.
 Market and marketing environment
 Marketing opportunities
 Micro and Macro factors
 SWOT analysis of the company- S- Strength, W-Weaknesses, O-Opportunities, T-Threat
 Environmental threat
 Available resources current and possible market action

2.Planning
Strategic and Tactical Planning

Strategic planning: The Company decides what it wants to do with each business unit with the help of
strategic planning.
Marketing planning involves deciding the marketing strategies to attain the company’s overall strategic
objective.

3.Implementation
Good marketing plan can’t be successful, as long it has not been implemented in a perfect way to achieve
the organizational objective.
It requires that people from all level should work together to implement the marketing plan.
It involves the cooperation and co-ordination among the internal departments like Marketing, finance,
purchasing and manufacturing.
Successful implementation of any business plan and activity also depends upon the contribution of the
external people like suppliers, resellers, advertising agencies, research firms etc.
4.Control

All the marketing process must be monitored and controlled.

All the ongoing marketing activities require measurement of performance.
Plans can be modified to achieve the goal and objectives.
Determining the causes of any serious gap and deciding the best corrective actions

Marketing information requirement

Markets: who are customers/what they like? Their buying decision model.

Market share: total sale of the product and compare it with competitors

Product: the customer thinking about products, what do they do with it? The stage of product whether is
at growth level or at declining level (in other words the stage of product at Product Life Cycle. Do we need
to extend our product range or else we need to delete any one of the product.

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Price: compare the price with your other competitors; high, average or low? Is the market is sensitive to
price?

Distribution: the mode of distribution should be direct or indirect or both? What discounts are required?
Sales force: whether the organization has enough/ too many sales forces? Are their territories equal to their
potential? Are they contacting the right people? Should we pay commission?
Advertising: do we have right media? Do we communicate the right message? Is it effective?

Customer attitude: what do they think of our/product/ firm/service/delivery?

Competitor’s activities: who are our competitors? Are they more or less successful then us? Why are they
more or less successful then us?

Environmental factors: what factors impact the marketing planning process (PESTEL factors).
Information and decision-making:
Information is required at all level of APIC as described by the Kotler et al (1991)
Strategic level: - product/ market decisions, product life cycle, product development, market entry strategy
Tactical: setting short-term price, discounting, and promotions campaigns. Advertising, distribution,
product and service level, planning and sales territories.

Operational: Pricing including discounting, competitor tracking, customer research, consumer research,
and Distribution channels. Sales and marketing budget, Promotion/ advertising and data base management.

User specific information:

Key elements:
Rationale: The need of information and what user intends to do with the information? In other words
decision making process
1. Budget: what is the budget to carry out the research?
2. Timescale: stipulated time frame to carry out the research.
3. Objectives: what are the key objectives to carry out the research?
4. Methods: scale of research, need of qualitative and quantitative research.
5. Reports: final presentation of information.
Characteristic of a good marketing research:

1.Scientific method: the effective marketing research uses the principal of scientific method: careful
observation, formulation of hypotheses, predication and testing.

Research creativity: marketing research should develop the innovative ways to solve the complex
problems.

Multiple methods: most of the marketing researcher uses the combination of marketing research tools.

Interdependence of models and data: different models should guide for the collection of different type of
information/data.

Value and cost information: the value of information must be compare against the cost of collecting that
information.

Ethical marketing: the researcher should make sure that the information collected by them shouldn’t be
misused and the personal information of those who participated in the research must not be share for any
other purpose.

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Marketing Decision Support System: most of the organisations use this system to help their marketing
managers for better decisions.

A coordinated collection of data system, tools and techniques with supporting software and hardware by
which an organization gathers and interprets relevant information from business and environment and turns
into a basis of marketing action.