A marketing information system (MIS)
is intended to bring together disparate items of data into a coherent body of
information. An MIS is, as will shortly be seen, more than raw data or
information suitable for the purposes of decision making. An MIS also provides
methods for interpreting the information the MIS provides. Moreover, as
Kotler's1 definition says, an MIS is more than a system of data
collection or a set of information technologies:
"A marketing information system is a continuing and
interacting structure of people, equipment and procedures to gather, sort,
analyse, evaluate, and distribute pertinent, timely and accurate information
for use by marketing decision makers to improve their marketing planning,
implementation, and control".
The following figure illustrates the major
components of an MIS, the environmental factors monitored by the system and the
types of marketing decision which the MIS seeks to underpin.
The explanation of this model of an
MIS begins with a description of each of its four main constituent parts: the
internal reporting systems, marketing research system, marketing intelligence
system and marketing models. It is suggested that whilst the MIS varies in its
degree of sophistication - with many in the industrialised countries being
computerised and few in the developing countries being so - a fully fledged MIS
should have these components, the methods (and technologies) of collection,
storing, retrieving and processing data notwithstanding.
Internal reporting systems: All enterprises which have been in operation for any period
of time nave a wealth of information. However, this information often remains
under-utilised because it is compartmentalised, either in the form of an
individual entrepreneur or in the functional departments of larger businesses.
That is, information is usually categorised according to its nature so that
there are, for example, financial, production, manpower, marketing,
stockholding and logistical data. Often the entrepreneur, or various personnel
working in the functional departments holding these pieces of data, do not see
how it could help decision makers in other functional areas. Similarly, decision
makers can fail to appreciate how information from other functional areas might
help them and therefore do not request it.
The internal records that are of
immediate value to marketing decisions are: orders received, stockholdings and
sales invoices. These are but a few of the internal records that can be used by
marketing managers, but even this small set of records is capable of generating
a great deal of information.
Below, is a list of some of the information that
can be derived from sales invoices.
·
Product type, size and pack type by territory
· Product type, size and pack type by type of account
· Product type, size and pack type by industry
· Product type, size and pack type by customer
· Average value and/or volume of sale by territory
· Average value and/or volume of sale by type of account
· Average value and/or volume of sale by industry
· Average value and/or volume of sale by sales person
· Product type, size and pack type by type of account
· Product type, size and pack type by industry
· Product type, size and pack type by customer
· Average value and/or volume of sale by territory
· Average value and/or volume of sale by type of account
· Average value and/or volume of sale by industry
· Average value and/or volume of sale by sales person
By comparing orders received with
invoices an enterprise can establish the extent to which it is providing an
acceptable level of customer service. In the same way, comparing stockholding
records with orders received helps an enterprise ascertain whether its stocks
are in line with current demand patterns.
Marketing research systems: The general topic of marketing research has been the prime
' subject of the textbook and only a little more needs to be added here.
Marketing research is a proactive search for information. That is, the
enterprise which commissions these studies does so to solve a perceived marketing
problem. In many cases, data is collected in a purposeful way to address a
well-defined problem (or a problem which can be defined and solved within the
course of the study). The other form of marketing research centres not around a
specific marketing problem but is an attempt to continuously monitor the
marketing environment. These monitoring or tracking exercises are continuous
marketing research studies, often involving panels of farmers, consumers or
distributors from which the same data is collected at regular intervals. Whilst
the ad hoc study and continuous marketing research differs in the
orientation, yet they are both proactive.
Marketing intelligence systems: Whereas marketing research is focused, market intelligence
is not. A marketing intelligence system is a set of procedures and data sources
used by marketing managers to sift information from the environment that they
can use in their decision making. This scanning of the economic and business
environment can be undertaken in a variety of ways, including;
Unfocused scanning
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The manager, by virtue of what
he/she reads, hears and watches exposes him/herself to information that may
prove useful. Whilst the behaviour is unfocused and the manager has no
specific purpose in mind, it is not unintentional
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Semi-focused scanning
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Again, the manager is not in
search of particular pieces of information that he/she is actively searching
but does narrow the range of media that is scanned. For instance, the manager
may focus more on economic and business publications, broadcasts etc. and pay
less attention to political, scientific or technological media.
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Informal search
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This describes the situation where
a fairly limited and unstructured attempt is made to obtain information for a
specific purpose. For example, the marketing manager of a firm considering
entering the business of importing frozen fish from a neighbouring country
may make informal inquiries as to prices and demand levels of frozen and
fresh fish. There would be little structure to this search with the manager
making inquiries with traders he/she happens to encounter as well as with
other ad hoc contacts in ministries, international aid agencies, with
trade associations, importers/exporters etc.
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Formal search
|
This is a purposeful search after
information in some systematic way. The information will be required to
address a specific issue. Whilst this sort of activity may seem to share the
characteristics of marketing research it is carried out by the manager
him/herself rather than a professional researcher. Moreover, the scope of the
search is likely to be narrow in scope and far less intensive than marketing
research
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Marketing intelligence is the
province of entrepreneurs and senior managers within an agribusiness. It
involves them in scanning newspaper trade magazines, business journals and
reports, economic forecasts and other media. In addition it involves management
in talking to producers, suppliers and customers, as well as to competitors.
Nonetheless, it is a largely informal process of observing and conversing.
Some enterprises will approach
marketing intelligence gathering in a more deliberate fashion and will train
its sales force, after-sales personnel and district/area managers to take
cognisance of competitors' actions, customer complaints and requests and
distributor problems. Enterprises with vision will also encourage
intermediaries, such as collectors, retailers, traders and other middlemen to
be proactive in conveying market intelligence back to them.
Marketing models: Within the MIS there has to be the means of interpreting
information in order to give direction to decision. These models may be computerised
or may not.
Typical tools are:
·
Time series sales modes
· Brand switching models
· Linear programming
· Elasticity models (price, incomes, demand, supply, etc.)
· Regression and correlation models
· Analysis of Variance (ANOVA) models
· Sensitivity analysis
· Discounted cash flow
· Spreadsheet 'what if models
· Brand switching models
· Linear programming
· Elasticity models (price, incomes, demand, supply, etc.)
· Regression and correlation models
· Analysis of Variance (ANOVA) models
· Sensitivity analysis
· Discounted cash flow
· Spreadsheet 'what if models
These and similar mathematical,
statistical, econometric and financial models are the analytical subsystem of
the MIS. A relatively modest investment in a desktop computer is enough to
allow an enterprise to automate the analysis of its data. Some of the models
used are stochastic, i.e. those containing a probabilistic element whereas
others are deterministic models where chance plays no part. Brand switching
models are stochastic since these express brand choices in probabilities
whereas linear programming is deterministic in that the relationships between
variables are expressed in exact mathematical terms.
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