Definition of Marketing Information System
Marketing Information System is a system concerned with the management of marketing information to facilitate effective decision making. It is a management information system where data related to market is systematically gathered, stored, analyzed, interpreted and communicated to managers on a regular basis as per the requirements. This system conducts an effective analysis of market conditions for acquiring the required data needed for smooth functioning. It is a system which through proper arrangement of data ensures the continuous availability of reliable, relevant and timely information for taking proper market decisions. All marketing activities of organization such as packaging, pricing, promotion, media, distribution etc. are carried on with the support of this system. Data is collected from both internal and external sources, processed into required information using its various components and outcome is shared with all the decision makers within the organization.
Characteristics of Marketing information system
Marketing Information System is a fully automated process that works on computer based systems for processing the market information. All functions related to gathering, analyzing and sharing of information with managers is done with the help of computer devices. It uses microfilms for storing important information related to market.
Marketing Information System is a future oriented process as it assists in decision making related to future activities of organization. All the information provided by this system helps managers in planning and strategy formulation related to future market activities.
It is a continuous system which works regularly on management marketing information. Marketing information system functions permanently as long as the organization exist and support the decision making by providing all relevant information
Marketing Information System has four inter-related components that includes Internal reporting system, Marketing research system, Marketing intelligence system and Marketing Decision support system. All these components are inter-linked with one another in such a way that information provided by one component is used by another one for its functioning
Right and timely information
It maintains an accurate database of all types of marketing information like level of competition, marketing environment, policies of government etc. This system keeps on updating this database regularly which provide managers with correct and timely information for effective decision making.
Marketing Information system offer easy accessibility of marketing information to managers. All the database is stored and maintained on a computer system which can be viewed easily at any point of time.
Used by all levels
It is a system that is used at all levels of management ranging from top level to low level managers. Information generated by this system is useful in formulating marketing plans, strategies and policies. It helps business to take advantage of prevailing opportunities and solve all market problems.
Management information system provide consistent and up-to-date information to managers for taking quick decisions. It regularly collects information from market for updating its database which leads to consistent flow of information.
Components of Marketing Information System
Internal Reporting System
Internal Reporting System is the first component of Marketing information system which is a major source of information. Internal records maintain a complete database of all marketing operations taking place within the organization. These records consist of information related to sales and purchase, inventory level, account payables and receivables, cash flows, cost, research works and reports available within the organization. These internal records offer easy and fast accessibility of information to marketing managers. Companies for managing all aspects of their internal records appoints internal MIS committee.
Marketing Intelligence System
Marketing Intelligence System is concerned with acquiring information from external sources. It is one which keeps organization inform about prevailing market situations and external happenings. This component gathers information from outside sources such as newspapers, magazines, trade journals, internet surfing, interacting with customers, suppliers and dealers, maintain contacts with agencies and other officials etc. Marketing Intelligence System by updating the management of recent trends assist business to take advantage of future opportunities and plan for upcoming challenges.
Marketing Research System
Marketing Research System is an independent part of Marketing information system that deals with specific market issues of business. It is not a part of routine activity but only collects data related to problem for solving it. It is one which gathers and conducts a formal study for dealing with specific problems of market. Marketing Research System assist marketing managers in dealing with particular purpose by providing information specific to that purpose.
Marketing Decision Support System
This component was earlier termed as Analytical Marketing System. This component is concerned with processing of data collected by above components for converting into useful marketing information. It comprises of various economic and mathematical tools such as time series analysis, linear programming, regression, statistics etc. These tools enable managers in analyzing the collected data that leads to better decision making.
Process of Marketing Information System
Deciding proper marketing metrics
It involves wisely choosing the subject area for acquiring data and application of Marketing information system. Every single information comprises of both opportunity as well as real cost. Therefore, deciding marketing metrics is must for application of this system in efficient way.
Acquiring required data
The next process is concerned with collection of relevant data as per the decided metrics. Data is acquired from both internal and external sources. Internal sources include various book of accounts, purchase and sales records, sales report etc. Whereas external sources include consumer surveys, newspapers, trade journals and social media.
Plotting data on graphs for proper analysis
This process involves systematic plotting of gathered data on graphs. It facilitates manager in performing comparative analysis, interpretation and prediction of future activities.
Sharing information with relevant departments
Fourth process involves sharing of graphical information with various departments which leads to proper analysis and interpretation of available data. It enables organization in taking right decisions as per the decided goals.
Planning best course of action
Last process of Marketing Information System is concerned with deciding right course of action which would lead to enhance the overall performance of marketing operations.
Importance of Marketing Information System
Facilitates decision making
Marketing Information System is an efficient tool available with managers that facilitate decision making. It provides complete details regarding current market trends and environment which leads to proper strategic and operational decisions.
Systematic data recording
It is a system which focuses on maintaining a proper database of all relevant market information. All data is orderly arranged and systematically recorded which provides key information for market planning and decision making.
Fills up information gap
This system enables in fulfilling all information gap of companies operating at global level and involved in international trade practices. With the expansion in coverage of geographical market, information gap in between the market and organization also widens. This has made the role of this system vital which focuses on meeting all informational needs of organization.
Marketing information system enables organization in efficiently planning all its market operations. It assesses the current demands of market and prospective sales for formulating proper strategies and policies.
Saves cost and time
It is a system which saves cost and time of organization by providing managers with accurate information timely. Marketing information system avoids wastage of cost and effort on unnecessary activities by targeting area of problem and providing with relevant information.
Proper evaluation and control
Marketing information system enables managers in monitoring and controlling all marketing activities of organization. It checks for any deviations in ongoing operations of business and take suitable corrective actions for removing these deviations.
Types of Marketing Decisions
Strategic Decisions are the decisions taken by the top level managers and influence the functioning of whole organization. These decisions include setting the targets of organization, designing structure and formulating policies. Ex- Decisions related to market acquisition and global marketing.
Control decisions are the one which are taken by middle level managers. These are the fundamental decisions taken by managers which acts a corrective action in case of any deviation takes place. Ex- Following an efficient marketing plan for potential acquisition of market.
These decisions deal with day-to-day operations of organization which are carried for attaining the defined goals. Operational decisions ensure that all plan and polices formulated by top authorities are properly implemented within the organization. Ex- Controlling the sales team efforts for proper implementation of decided market strategy.