MARKETING INFORMATION SYSTEM & MARKETING RESEARCH

Marketing Information System (MIS)

• One of the source of information that may be available to decision makers is a system known as MIS which stands for Marketing Information System.

• An MIS is a structure consisting of PEOPLE, EQUIPMENT, and PROCEDURES to GATHER, SORT, ANALYSE, EVALUATE and DISTRIBUTE NEEDED, TIMELY and ACCURATE INFORMATION to marketing decision makers.

• It is often used to determine decision makers’ information needs, acquire the needed information, and distribute that information to the decision makers in a form and at a time when they can be used for decision making.

•  First, it interact with these managers to (I) ASSESS INFORMATION NEEDS. Next, it (ii) DEVELOP NEEDED INFORMATION from internal company records, marketing intelligence activities, and marketing research (subsystem of MIS). Then, in order the ensure the information is useful, it will gone through a process known as (iii) INFORMATION ANALYSIS PROCESS and finally, the MIS (iv) DISTRIBUTE INFORMATION to managers in the right form at the right time to help them make better marketing decisions.

• A good marketing information system balances the information managers would like to have against what they really need and what is feasible to offer.

• The company begins by interviewing managers to find out what information they would like. But managers do not always need all the information they ask for, and they may not ask for all they really need.

• Some managers will ask for whatever information they can get without thinking carefully what they really need therefore resulted to information overloaded which may affect the decision made. They should not assume that additional information will always be worth obtaining, rather they should weight carefully the costs and time of additional information against the benefits resulting from it.

• The MIS must watch the marketing environment in order to provide decisions makers with information they should have to make key marketing decisions. However, sometimes the company cannot provide the needed information due to certain constraints such as availability, time and cost.

• Most marketing managers use internal records and report regularly, especially for making day-to-day planning, implementation, and control decisions.

• Internal records information consists if information gathered from sources within the company to evaluate marketing performances and to identify marketing problems and opportunities.

• Example such as the accounting department prepares financial statements and keeps detailed records of sales, costs and cash flow and manufacturing reports on production schedules, shipments and inventories whereas marketing department maintains a database of customer demographics, psycho-graphics and buying behavior.

• Managers can use information gathered from these and other sources within the company to evaluate performance, detect problems, and create new marketing opportunities.

• Internal records usually can be accessed more quickly and cheaply than other information sources, but they also present some problems. It is because it was collected from other purposes, it may be incomplete or in the wrong form for making marketing decisions. In addition, a large company produces great amounts of information, and keeping track of it all is difficult.

• Therefore, the MIS must gather, organised, process, and index this mountain of information so that manager can find it quickly and easily.

• Marketing Intelligence is everyday information about developments in the marketing environment. The marketing intelligence system determines what intelligence is needed, collects it by searching the environment, and delivers it to marketing managers.

• It can be gathered from many sources. For example, from the company’s own personnel such as the executives, engineers, scientists, purchasing agents, and the sales force.

• But company people are often busy and fail to pass on important information. Therefore, the intelligence gatherers have to be trained to spot new developments as well as urge to report back to the company.

• In addition, the company must also get suppliers, re-sellers and customers to pass along important intelligence.

• Information on competitors can be obtained from what they said about themselves in annual reports, speeches, press releases and advertisements.

• Company can also buy intelligence information from outside suppliers. Eg: Nielsen Marketing Research sells data on brand shares, retail prices, and percentages of store stocking different brands. Besides that, company can also get information for a fee through online databases or information search services. Eg: Adtrack online database tracks all the advertisements of a quarter page or larger from 150 major consumer and business publications and Donnelly Demographics database provides demographics data from the U.S. Census plus their own demographics projections by state, city or zip code. 

• A readily available online database exists to fill almost any marketing information need. General database services such as CompuServe, Dialog, and Nexis put an incredible wealth of information at the fingertips of marketing decisions makers.

• Some companies set up a department to collect and circulate marketing intelligence. The staff scans major publications, summarizes important news, and sends bulletins to marketing managers. The department members develop a file of intelligence information and help managers evaluate new information. These services greatly improve the quality of information available to marketing managers.

• Managers cannot always wait for information to arrive in bits and pieces from the marketing intelligence system. They often require formal studies of specific situations.

• Marketing research acts as the function that links the marketers to consumers and the public through information. It is used to identify and define marketing opportunities and problems, to generate, refine and evaluate marketing actions; to monitor marketing performances; and to improve understanding of the marketing process.

• Every marketer needs research. Marketing researchers engage in a wide variety of activities, ranging from market potential and market share studies, to assessments of customer satisfaction and purchase behavior, to studies of pricing, product, distribution, and promotion activities.

• A company can conduct marketing research in its own research department or have some of it done outside. Whether a company uses outside firms depends on its own research skills and resources. Although most large companies have their own marketing research tasks or special studies. A company with no research department has to buy the services of research firms.

• Information gathered by the company’s marketing intelligence and marketing research systems often requires more analysis, and sometime managers may need more help to apply the information to their marketing problems and decisions.

•  This help may include advanced statistical analysis to learn more about both the relationships within a set of data and their statistical reliability. Such analysis allows managers to go beyond means and standard deviations in the data.

• It might also involve a collection of mathematical models that well help marketers make better decisions. Each model represents some real system, process and outcome. This models can help answer the questions of WHAT IF and WHICH IS BEST.

• Marketing information has no value until managers use it to make better marketing decisions. The information gathered through marketing intelligence and marketing research must be distributed to the RIGHT PERSON ie: marketing managers at the RIGHT TIME.

• Most companies have centralized marketing information systems that provide managers with regular performance reports, intelligence updates, and reports on the result of studies.

• Managers need this routine report for making regular planning, implementation, and control decisions. But marketing managers may also need non-routine information for special situations and on-the-spot decisions.In the company with centralized information systems, these managers must request the information from the MIS staff and wait. Often, the information arrives too late to be useful.

• Developments in information technology have caused a revolution in information distribution. With recent advances in computers, software, and telecommunication, most companies are decentralizing their marketing information systems. In many companies, marketing managers have direct access to the information network through personal computers and other means. Thus, it allowed the managers to get the information they need directly and quickly and to tailor to their needs.

• As more managers develop the skills needed to use such systems, and as improvements in the technology make them more economical, more and more marketing companies will use decentralized marketing information systems.

• In general, it is defined as formal studies of specific problems and opportunities, in which it involves systematic gathering, recording, and analysing of data about problems relating to the marketing of goods and services or specific marketing situation facing the company.

• It uses information to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. It communicates findings and their implications.

• Whereas, MARKET RESEARCH is a research or a systematic analysis of a single particular market which is just a component of marketing research.  

•  It should be carried out to assist in certain areas such as:-

• Date gathered should involved in:-

• The marketing research process (see figure 4.2 below) consists of FOUR STEPS: (1) DEFINING THE PROBLEM & RESEARCH OBJECTIVES, (2) DEVELOPING THE RESEARCH PLAN, (3) IMPLEMENTING THE RESEARCH PLAN and (4) INTERPRETING AND REPORTING THE FINDINGS

• The marketing manager and the researcher must work closely together to define the problem carefully, and they must agree on the research objectives.

• The manager best understands the decision for which information is needed; the researcher best understand marketing research and how to obtain the information.

• Defining the problem and research objectives is often the hardest step in the research process. The manager may know something is wrong but might not know what are the specific causes.

• After the problem has been defined carefully, the manager and researcher must set the research objectives. They must have 3 types of objectives.

• The objective of exploratory research is to gather preliminary information that will help define the problem and suggest hypotheses.

•  The objective of descriptive research is to describe things such as the market potential for a product or the demographics and attitudes of consumers who buy the product.

• The objective of casual research is to test hypotheses about cause-and-effect relationships.

• The statement of the problem and research objectives guides the entire research process. The manager and researchers should put the statement in writing to be certain that they agree on the purpose and expected results of the research.

• The 2^nd step of the marketing research process calls for determining the information needed, developing a plan for gathering it efficiently, and presenting the plan to marketing management. The plan outlines sources of existing data and spells out the specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data.

• Research objectives must be translated into specific information needs.

• To meet the managers information needs, the researcher can gather secondary data, primary data or both. Secondary data consist of information that already exists somewhere, having being collected for another purpose. Primary data consist of information collected for the specific purpose at hand.

• Sources of secondary data would be for instant the online information database provided by A.C. Nielsen for fees or Government Census provided in libraries for public viewing with or without fees.

• Researchers usually start with gathering secondary data because it can be obtain more quickly and at a lower cost than primary data. However, it may present problems in which the needed information may not exist and researchers can rarely obtain all the data they need from secondary sources.

• Therefore in most cases, however, the company must also collect primary data.

• Collecting relevant, unbiased, accurate and current primary data is essential so as to ensure effective decisions. Therefore, it will calls for a number of decisions on the (i) research approaches, (ii) contact methods, (iii) sampling plan and (iv) research instruments.

• In using observation methods, researchers record respondents' overt behaviour, taking note of physical conditions and events.

• Direct contact with respondents is avoided; instead, their action are examined and noted systematically.

• Observation may also combined with interviews.

• It can sometime be biased if the respondent is aware of the observation process.

• It can be placed in a natural market environment, such as grocery store, without biasing or influencing shoppers' actions.

• Mechanical observation devices can also be used Eg: installing video camera, recorders, electronic scanners, counting machines and equipment to record eye movements of respondents looking at an advertisement or to count the numbers of customers passing by the certain area.

The Role of MIS  

(I) ASSESS INFORMATION NEEDS

(II)             DEVELOPING INFORMATION

The Subsystem of MIS

The information needed by marketing managers can be obtained from (1) Internal company records, (2) Marketing intelligence and (3) Marketing research. The information analysis system then processes this information to make it more useful for managers.

1. Internal Records 

2 . Marketing Intelligence

3. Marketing Research

(iv)              Information Analysis

(III)    DISTRIBUTING INFORMATION

MARKET RESEARCH & MARKETING RESEARCH

                                                                                                (Dennis Adcock,1998)

                                                                                                (Phillip Kotler, 1987)

• -          New Product Development
  -          Promotion
  -          Pricing
  -          Packaging
  -          Distribution
  -          Competitive Action
  
  

-          Total market estimated size

-          Size and location of new potential market

-          Growth Rates

-          Market characteristics (ie:nature of demand)

-          Sales forecast

-          Potential customers and competitors

MARKETING RESEARCH PROCESS

STEP 1: DEFINING THE PROBLEM & RESEARCH OBJECTIVES

STEP 2: DEVELOPING THE RESEARCH PLAN

(i)                 Research Approaches 

- Several approaches such as observational research, survey research and experimental research.

Observation Methods

Survey Methods

·         It includes interviews by mail, telephone, e-mail, and personal interviews. Survey results are used to describe and analyse consumer behaviour.

·         Gathering information through surveys is becoming more difficult because response rates are declining.

·         Some causes of nonresponse are fear of invasion of privacy, overly long questionnaires, dull topics, time pressures, and general skepticism regarding the personal benefits of participating in research study.

·         Moreover, fear of crime makes respondents unwilling to trust personal interview and the use of sales techniques disguised as market surveys has also contributed to decreased respondent cooperation.

Experimental Method

·         It is best suited for gathering causal information. Experiments involves selecting matched groups or subjects, giving them different treatments, controlling unrelated factors and checking for differences in group responses.
·         Observation and surveys may be used to collect information in experimental research.



(ii)               Contact Methods

·         Information can be collected by mail, telephone, or personal interview. Below shows the strengths and weaknesses of each of these contact methods.

·         Mail questionnaires can be used to collect large amounts of information at low cost per respondent. Respondents may give more honest answers and no interviewer is involved to bias the respondents’ answers. However, it is not flexible, take longer time and low response rate as well as can’t detect who are the person responding their mails.
·         Telephone interviewing is the best method of gathering information quickly, and provides greater flexibility. Interviewers can explain difficult questions and can skip some questions depending on the responses or answer they received thus allow greater control. Its bad side would be high cost and the absent of interviewer bias as they may interpret and record responses differently.
·         Personal Interviewing takes 2 forms individual interviewing– talking face to face with people at their homes, offices, street or in shopping mall and group interviewing – inviting a group of people (6-10) to gather a few hours with a trained moderator to talk about a product, service or organisation. Advantages would be flexible because it can be conducted at anywhere and anytime as well as can obtained fairly quick or immediate responses. As for group interviewing, it can have better focus and group interaction will encouraged actual feelings and thoughts thus lowered down the rate of bias information. Disadvantage again, interviewer bias is greater, higher cost and takes time especially in grouping the respondents who posses different demographic variables.

(iii)             Sampling Plan

·         Marketing researchers usually draw conclusions about large groups of consumers by studying a small sample of total consumer population.
·         A SAMPLE is a segment of the population selected to present the population as a whole. Ideally, the sample should be representative so that the researcher can make accurate estimates of the thoughts and behaviours of the larger population.
·         It involved 3 decisions:-

(i)                 WHO is to be surveyed (WHAT SAMPLING UNIT)?
(ii)               HOW many people should be surveyed (WHAT SAMPLE SIZE)?
(iii)       HOW should the people in the sample be chosen (WHAT SAMPLING PROCEDURES)?


(iv) Research Instruments

·         In collecting primary data, researchers have a choice of TWO main research instruments – the questionnaire and mechanical devices.
·         The questionnaire, by far the most common instrument, is very flexible – there are many ways to ask questions. It must be developed carefully and tested before they can be used on a large scale.
·         In term of the form of question (ie: Open-ended or close-ended) is important as well as the wording and ordering of the questions should not be biased and indirect.
·         Apart from this, the mechanical instruments such as people meters and supermarket scanners can be used also. Another group of mechanical devices measures subjects’ physical responses eg: galvanometer measures the strength of interest or emotions aroused by a subject’s exposure to different stimuli for instant to an advertisement or pictures/posters.
·         In addition, the eye cameras are used to study respondents’ eye movements to determine at what points their eyes focus first and how long they linger on a given item.
·         After deciding on all of the above, the researchers should then summarise the plan in a written proposal. A written proposal is especially important when the research project is large and complex or when an outside firm carries it out.
·         The proposal should cover the management problems addressed and the research objectives, the information to be obtained, the sources of secondary information or methods for collecting primary data, and the way the results will help management decision making. The proposal also should include research costs.
·         A written research plan or proposal assures that the marketing manager and researchers have considered all the important aspects of the research, and that they agree on why and how the research will be done.

STEP 3: IMPLEMENTING THE RESEARCH PLAN

·         The researchers next put the marketing research plan into action. This involves collecting, processing, and analysing the information. Data collection can be carried out by the company’s marketing research staff or by outside firms.
·         The company keeps more control over the collection process and data quality by using its own staff. However, outside firms that specialise the data collection often can do the job more quickly and at lower cost.
·         The data collection phase of the marketing research process is generally the most expensive and the most subject to error. The researcher should watch fieldwork closely to make sure that the plan is implemented correctly and to guard against problems with contacting respondents, with respondents who refuse to cooperate or who give biased or dishonest answers, and with interviewers who make mistakes or take shortcuts.
·         Researchers must process and analyse the collected data to isolate important information and findings. They need to check data from questionnaire for accuracy and completeness and code it for computer analysis. The researchers then tabulate the results and compute averages and other statistical measures.

STEP 4: INTERPRETING AND REPORTING THE FINDINGS

·         The researcher must now interpret the findings, draw conclusions, and report them to management. The researchers should not try to overwhelm managers with numbers and fancy statistical techniques. Rather, the researcher should present important findings that are useful in the major decisions faced by the management.
·         Interpretation should not be left only to the researchers, however. They are often experts in research design and statistics, but the marketing manager knows more about the problem and the decisions that must be made.
·         In many cases, findings can be interpreted in different ways, and discussion between researchers and manager will help point the best interpretations. The manager will also want to check that the research project was carried out properly and that all the necessary analysis was completed. Or, after seeing the findings, the manager may have additional questions that can be answered through further sifting of the data.
·         Finally, the manager is the one who ultimately must decide what action the research suggests. The researchers may even make the data directly available to marketing managers so that they can perform new analyses and test new relationships on their own.
·         Interpretation is an important phase of the marketing process. The best research is meaningless if the manager blindly accepts wrong interpretation from the researchers. Similarly, managers may have biased interpretation- they tend to accept research results that show what they expected to reject those that they did not expect or hope for. Thus, managers and researchers must work together closely when interpreting research results, and both must share responsibility for the research process and resulting decisions.