Meaning of Marketing Information System
Marketing Information System is a system which acquires and delivers all relevant market information to managers. It is an efficient tool which helps management in proper decision making by providing them regularly with reliable and up to date information. It is a management information system which assists the decision-making process. This system involves maintaining a complete database of all market data and processing it into information as required by managers.
Marketing information system involves systematic gathering, analysis, interpretation and communication of market information in organisation. It collects data from both internal and external sources of organisation. All important marketing operations like price, new product development, packaging, distribution, promotion, media etc. depends upon information provided by this system. Availability of quality information helps in taking better decisions regarding market by organisations. Improper decisions relating to market operations will have an adverse effect on business and will hamper its survival.
Philip Kotler has defined four components of marketing information system which are interrelated. These components are internal record system, marketing research system, marketing decision support system and marketing intelligence system. This system consists of several peoples, equipment’s and facilities for setting a permanent system of communicating relevant market information to the business. Various functions of marketing information system are as follows:
Functions of Marketing Information System
Proper Marketing Planning
Marketing information system helps in framing of marketing policies. It regularly supplies all market related information to management for regulating all market operations.
Various budgets are prepared in accordance with market conditions through information provided by this system for carrying out production, distribution and marketing activities. Proper availability of information helps in reducing the complexity of designing marketing activities which keeps on changing as per the requirements of market.
Anticipation of Customer Demands
Anticipation of customer needs and wants is important for every organisation. It helps in taking proper decisions regarding production activities and delivering the right product which may satisfy customers. If producers do not have an idea of what their customer wants then they may incur losses by producing product which may not be accepted by customers.
Adequate information about nature, size and character of consumer demands is necessary for manufacturing right product. It gives full details regarding changing tastes, fashions and likes of customers.
Helps in Analysing Competition
Marketing information system helps organisations in analysing the competitive environment around them. It enables the prediction of competitor’s behaviour which helps in formulating strategies accordingly to gain advantage over them. Various decisions regarding nature of product, pricing and promotion are taken by business by considering their rivals activities.
Today’s market is very competitive and every business needs to face and overcome it. Through market intelligence system, organisations get regularly all information about market competition which helps in making plans for overcoming this.
Increase the Efficiency
Every organisation strives to enhance its efficiency and overall profitability. Marketing information system helps in proper management and coordination of various departments within organisation. It develops a proper communication network through which information can be easily circulated within whole organisation among employees and employers. Employers can easily communicate employees about their role in accordance with market demand and trends.
Employees can also contact their employers in case of any problem so that it can be easily resolved. Proper communication between these two give clear picture to employees regarding what is to be done so that they can focus on their activities attentively. This increase the overall productivity and efficiency of organisation.
Better Understanding with Customers
Developing better understanding with customers is beneficial for retaining them for a longer term. Market information system aims at strengthening the relation of business with customers. It develops a proper channel through which business are able to interact with their customers.
Business can easily take their all queries and resolves them timely which help in satisfying them. As a part of marketing information system, business maintains an online website for providing various customer support services. Customers can contact them through their websites and send them feedback or their queries. A proper communication between customers and organisation takes place which results in better understanding among them.
Recognises Market Trends and Changes
Marketing information system recognises all trends and changes prevailing in market. It monitors and acquires the current economic conditions and regularly updates the business about it. Business requires market intelligence system to keep in touch with market always.
They are able to frame better strategies to reflect these prevailing changes in their activities. By analysing the current economic conditions of market, business can easily decide optimum production of its products. Overproduction or underproduction are both unfavourable for any organisation. Proper analysis of market changes and trends helps in avoiding these situations and production of right quantity.
Enhances Management Performance
Marketing information system has an important role in improving the performance of management. Quality of information available with managers impacts their decision making ability. It collects data from both internal and external sources of organisation and delivers it regularly to managers.
Management has clear idea of what is going inside the organisation and can check whether it is in line with requirements of market. They can take all necessary steps as and when required to bring changes accordingly. By maintaining a systematic internal records managers can easily ensure that optimum amount of required resources are always maintained to avoid any crisis in organisation.