In this article we will discuss:- 1. Marketing Information – Meaning and Definitions 2. Need for Marketing Information 3. Significance 4. Characteristics 5. Components 6. Requisites.
Marketing Information – Meaning and Definitions:
Marketing information system includes all the facts and information which is used in making marketing decisions and which will affect the marketing operation of the enterprise. Information as such is needed by every department of the enterprise. But the informational need of the marketing department is different from that of other departments.
This is because marketing information is more concerned with outside activities which are dynamic and diverse. The information to be collected from the market is fast changing and complex. As against this, other departments are more concerned with the information within the organisation. Thus, marketing information includes all information on which market decisions are based.
According to Cundiff Still and Govani, “MIS is an organised set of procedures, information handling, routines and reporting techniques designed to provide information required for making marketing decisions.”
According to K. Cox and K. Gonad, “MIS is a set of produces and methods for the regular and planned collection, analysis and presentation of information in making marketing decisions.”
Thus, marketing information system is a set of procedure used for collecting information and analyse it for the purpose of making marketing decisions. These marketing decisions have far reaching effect on the marketing activities of the organisation.
Need for Marketing Information:
The need for information is felt by every enterprise. This is because business unit operates in unpredictable and complex environment. For the purpose of survival, they have to continuously adapt themselves to the change in the environment. This can be done when they have the information about the changes taking place. Marketing department are also highly exposed to the continuous change in the markets. As a result, marketing information becomes essential for them.
The need for the marketing information arises because of the following reasons:
1. Knowledge about Consumers:
In today’s consumer centric marketing approach, no company can survive without clear knowledge of the consumer. Since consumers have to be served, their needs, wants, likings, dis-likings, etc. are very important for the company. Without this knowledge company cannot serve its markets. At the same time, consumers’ taste and preferences are constantly changing, about which company should have perfect knowledge only then it can adapt itself to the changes and survive.
2. Changing Economic Environment:
Business units are highly exposed to market forces and economic variables like size of the population, national income, per capita income, flow of money, price-level, economic policies, economic growth rate, demand and supply position in the economy, etc. They have to operate in an environment where economic conditions are constantly changing. This can be done only with the help of relevant and updated information on economic data.
3. Knowledge about Technology:
Technology forms the base for the production activities. Firms carry out large scale production with the use of technology only which provide a competitive edge to the firm over its competitors. Firm can bring improvement in its quality of product, cost of production and price level through the use of new and latest technology. This is possible when firm keeps pace with technological changes and continuously adapt itself to it. Marketing information pertaining to marketing innovation and technological development should be there with the firm.
4. Market Information:
Firms have to keep themselves abreast with the marketing environment. For this, they should have updated and accurate information about the observation made in newspapers and magazines, trade fairs and exhibition, observation made by the intermediaries like dealers, distributors, retailers, salesman, census data, trade association data, etc. Through this they can know what is happening around and thus keep themselves updated with the changes.
5. Knowledge about Competitive Conditions:
Markets today are characterised by high degree of competition and more number of competitors. Business units compete with each other by superior marketing policies and strategies. Those firms are successful who keep a close watch on the degree of competition, competitors’ changing strategies, etc. This is possible through relevant, authentic and latest information about the competitive environment.
6. Gap between Producer and Consumer:
Modern marketing has increased the gap between producer and consumer. Greater distance between the two, creates communication gap and thereby problems. It is very essential that both producer and consumer understand each other, only then healthy relationship will develop. This is possible when there is perfect two-way flow of information between producer and consumer.
Significance of Marketing Information:
Marketing information is of great importance to the business firms.
Authentic and updated information helps the firm in numerous ways, such as:
I. Availability of reliable information provides the firm with the better understanding of the external and internal environment. By this they can formulate marketing strategy in a better way.
II. Marketing information keeps the firm aware about the available marketing opportunities and changing conditions of the market.
III. Marketing information provides effective defence against emerging marketing threats. The changing face of the competitor and his policies can be quickly taken care of by the firm.
IV. With the help of marketing information, firms have better understanding of the markets, consumer and their changing needs and wants. Thus, they can be served more effectively.
Marketing information, as we can see, is of significant importance for the survival and growth of any organisation.
Characteristics of Good Marketing Information:
The value and the use of marketing information depend to a large extent on the essential characteristics of good marketing information it possesses.
According to V. S. Ramaswamy and S. Namakumari following is the exhaustive list of various characteristics:
1. Relevance (for decision making).
7. Reliability (from genuine source).
12. Strategic value.
For any information to be useful it is necessary that it has above mentioned characteristics:
The information so collected should match the purpose for which it was collected. If it is helpful in decision making, and is relevant to the purpose in hand, it is good and useful information. On the other hand, if the collected information does not help in decision making, it is not useful information.
The collected information should be clear. There should be no element of ambiguity. Clear information can be easily analysed.
Complete information should be there, only then the firm can arrive at the conclusions. Incomplete information is of no use.
The marketing information should be kept confidential, least it is used by competitors to get an edge over the firm.
Precision is an important characteristic of marketing information. The collected information should be precise and to the point. Large quantity of unspecific and raw data on some topic is not useful.
Marketing information should be collected in an economical way. Matching of cost and revenue is very essential. Many times the revenues generated out of the decisions based on marketing information do not justify the cost.
Collected marketing information should be from reliable sources. Only then it will help the firm in reaching to correct decisions. Sources of the information should be checked first.
Too much data on the related areas and topics is of no use. Marketing information should be accurate, directly in relation to the topic.
Availability of accurate information at correct time is very important. If this is not there, information loses its value. Time is the biggest factor in determining the usefulness of the information.
The concerned information should be objective, only then it will help in arriving at proper conclusions. Subjectivity in collecting information may distort the result. Elements of bias should be avoided.
The information needs to be authentic and correct. Wrong or unauthentic information may mislead the firm.
12. Strategic Value:
The information should be such that it has some value helpful in arriving at strategic decisions. Otherwise plain information has no value.
Components of Marketing Information System:
Marketing Information System consists of following four components:
1. Internal Accounting System.
2. Marketing Intelligence.
3. Marketing Research.
4. Business Management Science System.
Basically MIS is a system which connects the marketing environment with the marketing executives. It collects the data and information from the market, processes it and provides it to the marketing executive for their decision making.
1. Internal Accounting System:
Also called as internal marketing information system, this is concerned with the data from within the organisation so as to make the activities cost effective. The internal accounting system provides data on various internal activities such as sales, cost, receivables, stock, cash flows, accounts payable, etc.
This information is urgently required by marketing executives for improving the operation of the enterprise and making sound decisions. The main objective of the internal accounting system is to increase the efficiency of the internal operations of the firm by making efficient use of the existing resources of man, money, material and time.
2. Marketing Intelligence System:
Marketing Intelligence System is a part of marketing information system and is different from regular marketing information or marketing data. It is different in the sense that it mainly relates to the outside (external) environment and provides information on aspects such as changes in the market conditions, changes in customer demand, taste and preferences, changing strategy of the competitors and new opportunities in the market.
The nature of the marketing activities is such that it requires an intelligent system to look deeper into every aspect. Information relating to macro aspects such as competitive environment, demographic environment, economic environment, socio-cultural environment, political environment, legal environment, buyer behaviour, technological environment, all are collected through marketing intelligence system.
3. Marketing Research System:
Marketing research system is an important component of marketing information system. Though conceptually both marketing research and marketing information system are concerned with collection, processing and use of information, and may appear similar, there is significant difference between the two. Marketing information system is a wider term and marketing research is a narrower term.
Marketing research is concerned with specific marketing problems which the managers may come across relating to decrease in sales of a product, changing buying behaviour, brand preferences, dealer behaviour, product usage, etc. Researches are conducted to find out solutions to the marketing problem.
As and when the marketer faces the problem, a research may be ordered into it. However, marketing information system, is a continuous process of information flow from the marketing environment to the marketing executives after due processing of information on various marketing issues to the top executives.
4. Business Management Science System:
This is called as Marketing Science. This is nothing but operation research. It is the application of scientific methods and quantitative technique to various business problems. Mathematical models are used for solving business problems. Various strategic decisions of marketing are taken with the help of operation research.
Thus, marketing information system consisting of 4 components is a link between the marketing environment and marketing executives. Raw information pertaining to environment is collected; it is then processed and supplied to executives to enable them to make sound and quick decisions.
Requisites of Good Marketing Information System:
A good marketing information system should have following requisites:
1. It should be Unified and Centralised System:
MIS should be unified system and perceived as a single equity. The various components of MIS relating to collection, processing, storing and transmission of data should be integrated into a unified system, and managed by a centralised agency. The chief of the MIS must function as the consultant, coordinator and controller of all the components of MIS.
2. MIS should be Decision Support System:
MIS should be viewed as a decision support system. Though data collection and processing are the part of the MIS, its main thrust is to take available analysed data to the marketing executive to help in decision making. It is thus viewed as a marketing decision support system.
3. It should be Compatible with the Marketing Organization:
It is very important that marketing information system is compatible with the culture and level of sophistication attained by the organization. The MIS should be so designed that it matches the philosophy and culture of the organization.
4. It must be User Oriented:
Though the task of MIS is to collect, process and provide information, it should not overload the organization with unnecessary information. It should know the exact requirement of the user and accordingly provide the information. Thus, the data must be user oriented suiting the requirement of the user.
5. It must be fast:
The need of the business organization is not only to make decisions but also to speedier decisions. Therefore MIS should be so adjusted so as to facilitates timely supply of information to executive to help take timely decision.
6. It must be Economical:
The cost value ratio of the information which is collected and processed by MIS should be favourable to the firm. The value or gained received from an information must be more than the cost incurred in collecting the information. Different methods of collecting information are there, each of these methods should be analysed properly before selecting one.
7. It should be Adaptable:
It should be adaptable i.e. it must be capable of absorbing smoothly any changes that may become necessary in the system.
8. It should be Future Oriented:
MIS is concerned with the collection, processing, storing and retrieving of data to solve the marketing problems. It should be future oriented, concerned with how to prevent problem and solve problems.