This can optimize sales, and if done the right way, it can help monitor changes, patterns and wants of consumers. Marketing is very dynamic, everything keeps changing in this modern world, and the mail goal of all companies is to have a step ahead of other competitors, provide innovation to the consumers, before them. That is why decision makers need to forecast and Marketing Information System (MKIS) helps in achieving this specific objective. Besides, with the rapid growth of information technology, firms have progressed.
Strategic functions of marketing have been emphasized further. Internet-based technologies have enabled new approaches in profit maximization where customers are more accessible to information technology and thus provides new means for collecting marketing data. This can be seen in financial service providers such as banks, stockbrokers and insurance companies cannot do further business today without having their client-server-based information’s via technology. Internet based technologies, marketing have become more interactive and real time. Marketing Information Systems Marketing information systems are people, equipment, and procedures to gather, sort, analyse, evaluate, and distribute needed, timely, and accurate information to marketing decision makers”1. Marketing Information System is a system that analyses and assesses data which is gathered continuously from sources inside and outside an organization. With MKIS disparate items of data are brought together into a coherent body of information. It helps in providing basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion.
The MKIS increases the number of options available to decision-makers and supports every element of the marketing strategy. And it consists of four important components: • Internal databases • Marketing intelligence • Marketing research • Marketing decision support system (information analysis) [pic] • • Illustration of the four component of Marketing Information System 1Kotler, Philip; Keller, Kevin Lane (2006). Marketing Management (12 ed. ). Pearson Education. Internal Databases
Internal databases are electronic and non-electronic collections of consumers and market facts, mainly obtained from the organization network; it includes financial records, operation reports, customer services… Internal database is quickly and easily accessed, it provides an immense amount of data for a market research project at a fraction of cost, avoiding he time and inconvenience of primary data collection. Usually companies use Data warehousing to store their data designed to simplify management decisions. Data is usually processed throughout these three steps: Data collection is the capturing information from different internal and external sources that need to be organised, verified and processed for database. • Data management. Formatting and storing data in an effective way to facilitate access by warehouse users. • Data access. Use of tools to query data and analysis. i. Data Marts and Data Mining Data Mart is a subset of the data resource, in comparison to a data warehouse, the data mart is created for specific and predefined purpose to support business needs. Data mart is configured so that it can be accessed easily and rapidly.
Whereas data mining is the process of analysing data from different angles and summarizing it to create a homogeneous for the purpose of improving decision making which will have an impact on marketing, sales and customer support operations. ii. Importance of internal database In an effort to more effectively target potential customers, many enterprises build models of their targeted demographic group, track down these groups and focus their advertising budgets on them in the hope that it will result in an improved return on investment from their advertising spend.
This trend of using internal database is seen as database marketing. It relies on databases that stored information about customers’ and potential customers; profiles and purchase patterns. Database marketing can: • Locate geographically potential customers in a specific territory • Analyse Profit • Monitor reliability and efficiency • Market the products and services in different segments • Add more revenue through repacking and re-pricing in different market • Offer new products through evaluation. • Find the best sellers or most profitable in consumer products • Assess on-going marketing programs ii. Advantages of internal database Internal database is of great use to marketers because it can be obtained at a fraction of the cost, time and inconvenience of primary data collection. It includes the following advantages: • No pressure to pay back money • Full control over finance • All sources are internal, therefore direct link to source is easier and quick iv. Real case: use of Internal Databases In hotels, decision makers gather all information about existing customers using software called Amadeus. This software helps them to record different types of information on their customers, such as Personal information • Time spent in the hotel • Period of their stay • Preferred activities. This information is used for marketing campaign and for providing more personalized services. Market intelligence Market intelligence is to use existing sources of data to provide a global view of the market to an organisation, to understand what is happening in the market and to analyse new potential ones. Before entering a new foreign market, accuracy and confident decision-making must be taken while determining market opportunities, market penetration strategies and market development metrics.
Market Intelligence can be split into two parts: • Market Intelligence based on external data • Market Intelligence based on internal data Even Market Intelligence relies mainly on external data such as the internet, the government statistics, trade, business, professional associations, analyst reports… there is an also The internal source of data must not be neglected since it can be very useful, for example the list of existing client can be used for a mailing campaign. i.
Market Intelligence from external data The main source of external information for Marketing Intelligence is the desk research. The objective of desk research is to gain background knowledge of a market by gathering data that’s already in internal sources, publications,governmentaland non-governmental institutions, internet … Advantages of a desk research: • Cost effective • Time effective • Large amount of data can be received quickly ii. Market Intelligence from internal data
One internal source of information comes from the internal database. By analysing information that already exists, cross-sale and up-sale opportunities can be spot to forecast customer behaviour or to understand what type of customers are the most profitable. With the growth of internet based applications, websites also become a high valuable source of information. Through analytics (web tool) firms can analyse website traffic and can manage to redirect customers on what they are looking for.
Market Research Green and Tull defined marketing research as follows: “Marketing research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing. “2 It can be used for different purposes: • Measuring the impact of advertising on consumer behaviour, this type of study allows the marketer to know if the good strategic has been used. Assessing the satisfaction of existing consumer, the information collected help organisations to make improvement of their services and products. • Knowing the perception of consumers, Marketing Research involves different steps: a) Define the problem is to describe clearly what are the needed information to make the decision and how these data can be acquired. b) Determine research design. There are three categories of market research depending on the objective of the research : Exploratory research helps to eliminated impractical idea and assumptions by clarifying concepts and providing enlightenment • Descriptive research is, searching information in order to know how are the users of a particular product in order to define the proportion of its population or make forecast for future demand for a product. • Causal research are used to find the cause and effect between two variable, it is normally carried out in laboratory or field experiment c) Identify data types and sources, it exist two type of data: Primary data which it the gathering of fresh information through surveys, interviews, group discussion or market experiment. • Secondary data, usually before choosing the primary sources of information which is usually expensive and time consuming, organisation must look for secondary data. It is data that has been collected by other (internal or external) for other purposes. 2Green, P. E. , Tull, D. S. and Albaum, G (1993), Research For Marketing Decisions, 5th edition, Prentice-Hall d) Design data collection forms and questionnaires- Questionnaire helps to collect primary data.
In order to get the right information, it is essential to design correctly the questionnaire and do a pilot test. e) Determine sample plan and size- Define who will be the respondents. f)Collect the data g) Analyse and interpret the data h) Prepare the research report which consist of : • Authorization letter for the research • Table of Contents • List of illustrations • Executive summary • Research objectives • Methodology • Results • Limitations • Conclusions and recommendations • Appendices containing copies of the questionnaires, etc.
While conducting an objective, systematically and analytically, marketing research help decision makers in reducing doubts in the decision making process and increases the probability and magnitude of success. It is important because it: a) guides communication of organisations with current and potential customers b) helps company to identify opportunities in the marketplace c) Minimizes the risk of doing business. d) Uncovers and identifies potential problems. e) Creates benchmarks and helps you track your progress. f)Helps managers to evaluate their success.
Marketing Decision Support System (Information analysis) The Marketing Decision Support System (MDSS) is a computer base of combination of information technology including software and hardware used to support operations, management and decision making activities. This system is implemented not to replace the decision makers but to assist them in their activities. The MDSS has features which answer inquiries and generate reports helping the managers to access marketing information, make analysis and determine what are the ideal courses of action to take. i. Marketing Decisions Support System Functions
The purpose of the MDSS is to make available analytical model for prediction, assumption and optimization. The MDSS tools compromise simple spread sheets such as Excel, statistical analysis packages such as SPSS and SAS, on-line analytical processing (OLAP) tools, data mining applications, and neural networks. The system gives the possibilities to explore different options. Typical MDSS functions include models and tools for: a) Sensitivity analysis. It allows analysing the impact of different strategic variables such as price and model on the demand or competitive behaviour. ) What-if analysis shows the effect of revenues and costs on profits and cash flows. c) Goal setting is the analysis focuses on the wanted outcome and supply base needed to achieve the goal. d) Exception reporting also called the gap analysis, helps to search results that exceed or fall short of stated objectives or benchmarks. e) Pareto analysis helps to detect activities that generate unbalanced results. For instance, the top 20 percent of customers may account for 80 percent of sales revenues. f)Forecasting models are used to analyse time series data for prediction of future sales nd market share levels. g) Simulation models. Monte Carlo simulations address marketing decision making under conditions of uncertainty. Variables such as the market price, unit variable cost, and quantity sold are unknown ahead of the product investment decision. Simulation models allow decision makers to study risk and evaluate the possibilities that will most likely result out of their choice. h) Scorecards and dashboards can present a consistent framework to follow up the efficiency of marketing activities.
They often have different modules for senior executives,marketingmanagers,productmanagers,andcustomerservice managers. Scorecard systems allow the user to “drill down” on an analytic and workflow basis to determine the status of any strategic initiative. Dashboards allow frontline managers to monitor their critical performance indicators. These systems are often used in conjunction with “best practice” standards for call-centre-based customer support. ii. MDSS Analyses The MDSS models and tools are usually used by manager to analyse the stake olders. The MDSS gives possibilities to do different types of analysis such as: • Market segmentation. • Market share. • Competitor. • Pricing. • Cost. • Sales. • Sales forecasting. • Sales force productivity. • Advertising. • Distribution. • Stimulation. • Customer satisfaction. iii. Example how MDSS is used La Palmeraie Hotel (A local hotel) has implemented Google analytic to their website. This tool gives statistics in order to study different variable such as: • The numbers of people who have visited their website Time spent on the website • The pages most visited. • Country of the visitors. • How visitors access to the website (By clicking on a link found on another website) This information allow managers to know if the website is working correctly and at the same knowing the consumer behaviour, that is, what kind of information the clients are looking for and which country is more interested by the services proposed by the hotel. The option, “knowing how the visitors accessed the website” help decision makers know what online advertising are working correctly.
Conclusion Information is very important to business since it facilitates decision making. The different component of the Marketing information System helps Organisation in different ways. Internal data base which many company forget help managers to improve business without much cost since the information is already available. W hen the data is not accessible from internal, organisation will have to look for it outside the company and this can be done throughout Market Research.
W hereas, the Marketing Decision support system is how to implement the gathering of information which will help manager. The implementation of MIKS allow organisation to remain up to date without wasting much time in the research of information. Information allow companies not only to identify opportunities of the market but also to know the changing pattern of consumer behaviour, these information help company to know in what direction to go in order to remain in this competitive market.
If changes are not made internally, competitors will never miss an opportunity to improve in order to have steps ahead. Reference: Kotler, PhilipKeller and Kevin Lane (2006). Marketing Management (12 Ed. ). Pearson Education. Green, P. E. , Tull, D. S. and Albaum, G (1993), Research For Marketing Decisions, 5th edition, Prentice-Hall Marketing information System [Online] Available: