MARKETING INFORMATION SYSTEMS AND MARKETING RESEARCH

MARKETING INFORMATION SYSTEM

1. What is marketing information system (MIS)?
M.I.S. consists of:
 People
 Equipment and
 Procedures to gather, sort, analyze, evaluate and distribute needed, timely and
accurate information to marketing decision makers.

2. What is the role of MIS?

 To assess the Manager information needs
 To develop the needed information and
 To distribute the information in a timely fashion to the marketing managers.

All these are necessary because Marketing Managers need information about
developments in the marketing environment in order to carry out their
 Analysis
 Planning
 Implementation and
 Control responsibilities
3. How does a firm develop the needed information?
This is developed through:
 The internal record systems
 The Marketing Intelligence System
 Marketing Research system
 Marketing decision support systems (MDSS)

a) Internal Record system

This is the most basic source of information for marketing managers.
 This includes reports on
- Orders
- Sales
- Prices
- Inventory levels
- Receivables
- Payables, etc.
 By analyzing this information, marketing managers can spot important
opportunities and problems.

b) The Marketing Intelligence system

While the internal record system supplies results data, MIS supplies happening data.

 What is M.I.S?

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 “M.I.S is a set of procedures and sources used by managers to obtain everyday
information about pertinent developments in the marketing environment.”

 How do Marketing managers collect marketing intelligence?

This is done by:
- Reading books
- Reading newspapers and magazines
- Talking to customers
- Talking to suppliers
- Talking to distributors
- From other managers and personnel within the company
- Having access to competitors’ records.
 What should a well-run company do to improve the quality and quantity of
marketing intelligence?
 Train and motivate the sales force to spot and report new developments.
 Motivate distributors, retailers and other intermediaries to pass along
important intelligences
 Purchase information from outside suppliers e.g. Research firms
 Establish internal marketing information center to collect and circulates
marketing intelligence.
The staff scan major publications, abstracts, relevant news, etc. and disseminate new
information to marketing managers
 Having a well-stocked library
 Installing internet facilities
 Purchasing newspapers, magazines etc.
 Facilitating interaction among staff.

c) Marketing Decision Support System (MDSS)

“It is a co-coordinated collection of data system, tools and techniques with supporting software
and hardware by which an organization gathers and interprets relevant information from business
environment and turns it into a basis for marketing actions.”

The use of computer software and hardware is necessary for marketers to analyze, plan and
control their operations.

d) Marketing Research system

Organization may have an in-house research team or commission external researcher to collect,
analyze interpret and present data findings on marketing situations facing a company.

Why do organisations find it necessary to carry out marketing research regularly?

- Competitive pressure.
Need to develop new products more quickly that before in order to be successful. This requires
research to monitor consumer needs and to find out what competitors are doing,

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- Expanding markets
Marketing activities are becoming increasingly compels and boarders in scope as more firms
operate in both domestic and foreign markets. Before designing a marketing programme the firm
needs to conduct research so as to understand what does on in foreign markets.

- Cost of mistakes
Marketing is expensive .A failed marketing efforts can cause several damages to a firms. Before
indicating a marketing programme, a firm should analyze the market, the competition and other
environmental factors.

- Growing Customers expectations

Firms need to research, identify customers’ problems and solve then before they result in lost
business.

- Rising costs of production

Researcher is necessary identify the cost –effective production methods.

Why is Marketing Research Important

Given the high failure rate of new products on the market, marketing research can make
or break a business. Marketing research helps businesses:
 plan future operations to increase sales and profits
 decide what products to produce
 decide where to sell products
 decide how to promote products
 decide how to price products
 solve marketing problems
 anticipate future marketing potential
 keep track of current markets and competitors

CHARACTERISTICS OF GOOD MARKETING RESEARCH

1. Scientific method: Competent marketing research is characterized by an attempt to follow the

scientific method, careful observation, formulation of hypotheses, prediction and testing.

2. Research creativity: At its best, marketing research develops innovative ways to solve a
problem.

3. Multiple methods: Competent marketing researchers keep away from over reliance on any
one method, preferring to adopt the method to the problem rather than the other way round. They
also recognize the desirability of the simultaneous gathering of information in different ways to
give greater confidence than any one method would provide.

4. Interdependence of models and data: Competent marketing researchers recognize that the

facts do not speak for themselves but rather derive their meaning from models of the problem.
They attempt to guide their search for information on the basis of a causal decision model to
help the executive.

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5. Value and cost of information: Competent marketing researchers show concern for
measuring the value of information against its cost. Value/cost is a consideration when the
Marketing Research Department chooses which research projects to conduct, which research
designs to use and whether to gather more information.

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MARKETING RESEARCH

DEFINITION

Marketing research is defined as “the systematic gathering recording and analyzing of data about
problems relating to marketing of goods and services”. Thus, the essential purpose of marketing
research is to provide information which will facilitate in identification of an opportunity or
problem situation and assist managers in arriving at the best possible decision when such
situation(s) are encountered.

Effective marketing research involves five steps

1. problem definition
2. research design
3. field work
4. data analysis
5. report preparation

1. PROBLEM DEFINITION

This first step in the conduction of research calls for careful definition of the problem. If the
problem is stated vaguely, if the wrong problem is defined or if the uses of the research are
not made clear, then the research results may prove useless to the manager.

Research effort is generally more efficient when the problem and the alternatives are well
defined.
The cost of research in general is related to the total information gathered while the value of
research is associated only with the proportion of information that is useful. Hence a clear
definition of the problem is of paramount importance.

The problem definition stage should lead to development of a clear set of objectives stated in
writing if possible. Research objectives should also be stated clearly since they guide the
entire research process. A researcher may be required to state both general and specific
objectives of a study.

2. RESEARCH DESIGN

-The marketing research manager faces a choice among many alternative ways to collect the
information that will satisfy the research objectives. He must decide on:
a) Data collection methods
b) Research instruments to be used
c) Sampling plan

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 a) Data collection methods

Types of data

There are two types of data

i. Secondary data
ii. primary data

Secondary data:
This type of data exists in an accessible form and merely has to be found. It might be
present in an organization’s internal records, in advertising agencies, professional
associations, in government, commercial or trade publications, or purchasable from
marketing research firms.

Secondarydata saves an organization both time and expense due to it availability. It must
however be checked for impartiality, validity and reliability. When satisfactory data are
not available, the researcher must collect primary data.

Primary data
Is data that is collected for the very first time to address a specific problem. This data that
can be gathered from
 Customers
 Middlemen
 Salesmen
 Competitors, etc
Three basic primary data collection methods include:

i.Observation: In which case the researcher attempts to learn about the problem by observing the
relevant actors. The observation method can be used to study:
- Sales techniques
- Customer movements
- Customer responses.
Its main advantage is that it generally leads to a more objective picture of overt behavior than
can be expected from relying on people’s accounts of how they behave. One the other hand, this
method yields no information about:
- The state of mind
- Buying motives or
- Brand images of those being observed.
ii.Experimentation: The experimental method consists of introducing selected stimuli into a
controlled environment and systematically varying them. The purpose of control is to eliminate
competing hypotheses that might also explain the observed phenomena.

 Marketers have applied this data collection method to such marketing problems as:
- Finding the best sales-training method
- The best incentives scheme
- The best price level and

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 - The best advertisement campaign.
iii.Survey: This is the most common method – as compared to either direct observation or
experimentation. It yields a broader range of information and is effective for a greater number of
research problems.
Surveys can produce information on:
- Socio- economic characteristics
- Attitude, opinions, motives and
- Overt behavior of different kinds
Surveys are an effective way of gathering information for:
- Planning product features
- Advertising copy
- Advertising media
- Sales promotions
- Channels of distribution and
- Other marketing variables.

b) Research instruments

Researchers have to use or design a reliable research instrument to gather the information being
sought. Observation methods make use of instruments such as:
- Tape recorders
- Cameras and
- Tally sheets
The experimental methods might involve similar instrument if the subjects are put through a
task. The survey methods, and to some extent experimental methods, commonly rely on
questionnaires.

Questionnaire: the construction of a good questionnaire calls for considerable skill. Every
questionnaire should be presented on a pilot sample of a few persons before being used on a
large scale.

A common type of error occurs in the:

a) Type of questions asked: The inclusion of questions that cannot be answered, and
the omission of other questions that should be answered. Each question should be
checked to determine whether it is necessary in terms of research objectives.
b) The form and working of questions can make a substantial difference to the
response. An open ended question is one in which the respondent is free to answer
in his own words. A close-ended question is one in t\which the possible answers
are supplied.
Note:
Dichotomous questions (Yes/No)
Multiple choice questions (Yes/No/Don’t know)
Scaling questions (Placing marks along a scale)
The choice between open- ended and close-ended questions affects the thoughtfulness of
responses, the costs of interviewing and the quality of the subsequent analysis.

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 c) Choice of words calls for consideration care. The designer should strive for:
- Simple
- Direct
- Unambiguous and
- Unbiased wording
A good rule is always to pretest the questions on a sample of respondents before they are
used on a wider scale.
Other ‘do’s and don’ts’ arise in connection with sequencing of questions in the
questionnaire. The lead question should create interest if possible. An open question is
usually better here. Difficult or personal questions should be used towards the end of the
interview.
The body of questions should be asked in as logical an order as possible in order to avoid
confusing the respondent.

c) Sampling plan

This is the third element of a research design:

The sampling plan answers four questions
 Who is to be surveyed? (sampling Unit)
 How many are to be surveyed? (sampling size)
 How are they to be selected? ( Sampling procedure)
 How are they to be reached?(Sampling media)

1) Sampling unit – The proper sampling unit is not always obvious from the nature of the
information sought. The research must determine not only what information is needed but
also who is more likely to have it (Husband, wife, children, supermarket, specialty store,
e.t.c)
2) Sampling size – Large sample obviously give more results than a small sample but it not
necessary to sample the entire population. Much insight about marketing processes and
attitudes can be gained from a sample of fewer than 100 persons. In motivation – research
studies, fewer than 30 depth interviews usually suffice to uncover significant attitudes.
3) Sampling procedure – Depends upon the research objective. For exploratory research,
non-profitability-sampling procedure may be adequate. However to make an accurate
estimate of population should be draw. Random (Probability) sample of the population
should be drawn. Random sampling allows the calculation of confidence limits for
sampling error. But random sampling is always more costly than non-random sampling..
Sampling could be put to better use by reducing non-sampling errors which can be just as
fatal as sampling errors.
4) Sampling media – Whether the target population should be reached by telephone, mail or
personal interview.

Telephone interviewing: Stands out as the best method for gathering information
quickly. It permits the interviewer to clarify his questions if they are not understood.
Drawbacks
a) Only people with telephone can be interviewed
b) Only short, not too personal interviews can be carried out.

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 Mail interviewing: May be the best way to reach persons who would not give personal
interviews or who might be biased by interviewers. On the other hand, mail
questionnaires require simple & clearly worded questions and the return rate is usually
low and/ or slow.
Personal interviewing: Is the most versatile of the three methods. The personal
interviewer can ask more questions and an supplement the interviewer with personal
observation. Personal interviewing is the most expensive methods and requires much
more techniques and administrative planning and supervision.

3. FIELD WORK

After the research design has been finalized, the research department must supervise, or
subcontract, the task of collecting data. This phase is generally the most expensive and
most liable to error. For major problems arise:

Not-at-home – call back or substitute the house to house next door substitution may be
biasing.

Refusal to cooperate – after finding the designated individual at home, the interviewer
must interest the person in co-operating.

Respondent bias – giving socially accepted answers, “helping the researcher”

Interviewer bias – Interviewers are capable of introducing a variety of biases into the
interviewing process, through the mere fact of their age, sex, manner or intonation- there
is problem of the conscious interviewer bias or dishonesty (cheating).

4. DATA ANALYSIS

The fourth step in marketing research procedure is to attempt to extract meaningful

information from the data. The first step isto clean data to get rid of irrelevancies and
errors, then coding is done in preparation of analysis.

A researcher may then calculate relevant averages and measures of dispersion. The next
step is to cross tabulate the data to produce useful relationships. The next step may
involve measures of correlation coefficients and performance
of goodness-of-fit tests. A researcher may also use multivariate analysis of the data, using
such statistical techniques as multiple regression analysis factor analysis and cluster
analysis.

NB: The data analysis method to be used depends on the type of data to be collected.
So the measures above may not necessarily be used.

5. REPORT PREPARATION

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The last step is the preparation of a managerially oriented report presenting the major
findings and recommendation coming from the analyzed data.
a) The report should begin with a short statement of the study problem and the major
findings.
b) This should be followed by an elaboration of the findings
c) A brief description of the research should then be given with more technical
details being saved for the appendix.

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