MIS in Service Marketing

With the increasing use of the computer, companies are becoming more interested in the development of a corporate wide, inte­grated management information system. The purpose of such a sys­tem is to bring all of the flows of recorded information in the entire company into a unified whole. Thereby it is hoped that the manager’s capacity to plan and control the company’s activities will be improved. Such a system is often seen as a marked improvement over current procedures.

As companies have attempted to introduce such a system, how­ever, a consensus seems to be growing, especially among some computer hardware manufacturers, that a more realistic approach is to begin with smaller systems, such as one in marketing, or in production.

As Business Week recently put it, “Skeptics are backing of and asking whether one big system is such a good idea after all.” The reason for this change in view is the growing awareness that these smaller subsystem, such as one for marketing, can per­haps be conceptualized in enough detail to be operational, whereas, in the current state of the art, the larger systems probably cannot.

The human mind simply cannot grasp the whole manage­ment operation with efficient clarity and detail to permit it to be structured and modeled. New concepts will probably have to be developed to aid us in thinking about such a complex phenome­non. In the meantime, management can proceed to develop the smaller systems. In building the smaller systems too, we can ben­efit by learning from the mistakes that were made with global systems.

Marketing information systems are really the frameworks used for managing, processing and accessing data. They can be simply a sharing of information by key departments, but are more likely to be some form of integrated system based around information technol­ogy. The important issue is that the information from such a system is presented in a way that is useful to the marketing decisions.

There are three basic components of a good marketing information system:

1. Information acquired via market intelligence
2. Information from operating data
3. Information library.

Marketing information system is a set of procedures and methods for regular and planned collection, analysis and presentation of information in making marketing decisions. It is an interacting, continuing, future-oriented structure of persons, machines and procedures designed to generate an orderly flow of information collected from internal and external sources of information.

It is an integrated combination of information, information processing and analysis, equipment and tools (i.e., software and hardware) and information specialists who analyse and interpret the collected information and provide it to decision-makers to serve their analysis, planning and control needs.

Marketing information system is a broader and more encompassing term than market research and a variation of the term management information system. Marketing Information System (MIS) is the structure of people, equipment and procedures used to gather, analyses and distribute information required by an organisation.

These are the data to be used as a basis for marketing decisions. Market research reveals that information is collected for a specific reason or project; the major objective is a one-time use.

Marketing information system is a consciously developed plan for information flow (side by side with goods flow) and it is an ongoing or continuous process.

Such marketing information systems are beginning to evolve, as the following two examples illustrate:

1. MIS to Help Develop Marketing Plans:

To help its managers develop their marketing plans, the Gillette Company uses information gathered from five different types of regularly recurring research projects. The five projects were designed to provide the managers a complete picture of the razor and blade market, including detailed descriptions of consumers, competition, and dis­tribution. The five projects, and the usefulness of the information they gather, are as follows.

These five projects provide Gillette marketing managers with information on market shares, brand loyalty and brand switching, consumer attitudes, brand and advertising awareness, product advantages versus competition, inventory levels, out-of-stock, retail prices and display, local advertising, and more.

As the data are gathered from recurring studies, the managers have a complete picture of current market and competitive conditions from the most recent set of studies, and they know the recent trends that exist in all of these data. All of these items of information provide the Gillette man­agers an excellent historical record on which to base the development of their new marketing plans.

2. MIS to Evaluate the Marketing Plan’s Effectiveness:

Gross margin, marketing expenditures, and contribution to earnings are recorded for each market area and also totally. This information is also shown for each market (1) as a percentage of the total for all markets and (2) as the dollar amount of change this year compared with last year. Additionally, the total industry sales in dollars, the firm’s market share, the percentage of retail distribution achieved for the product, and television media costs are shown for each market, both for this year and last.

With these data, management can observe changes in demand (as reflected in total industry sales); changes in sales, costs, and earnings, changes in competition (as reflected in market share and retail distribution percentages) and, changes in advertising costs (as reflected in television media costs). This information is available by market and for all markets. With such information management can reappraise a product’s marketing expenditures plan as well as the effectiveness of the advertising-sales promotion mix used and then make changes.

For example- in Area A, advertising and promotion expenses of $100,000 produced $260,000 of contribution to earnings, while in Area E advertising and pro­motion expenses of $400,000 produced only $280,000 of contribution to earnings. This suggests that the company might increase its total contribution to earnings by shifting some advertising and promotion money from Area E to Area A.

Concluding Comments on Marketing Research Usage:

The materials show that marketing research is being used to measure the characteristics of markets, to obtain information needed for forecasting, to evaluate new-product ideas and improve existing products, to assist man­agers in making better advertising and promotion decisions, and for many other purposes. Marketing research is used throughout the four phases of the administrative process, from establishing strategies all the way through to evaluating the effectiveness of the marketing plan used to try to achieve the established strategy.

The role of marketing research appears to be headed for higher levels of sophistication and utilization as more and more companies begin to develop their own Marketing Information Systems (MISs).

Scope

Scope 1. Strategy Implementation:

MIS helps in product launches, authorizes the co-ordination of marketing strategies, and is an integral part of Sales Force Automation (SFA), Customer Relationship Management (CRM), and customer service systems implementations. It permits decision makers to more effectively manage the sales force as well as customer relationships.

Some customer management software companies are extending their CRM applications to include Partner Relationship Management (PRM) capabilities. This has become increasingly important as many marketers are choosing to outsource important marketing functions and form strategic alliances to address new markets.

Scope 2. Strategy Development:

Information needed to develop marketing strategy is also provided by MIS. It supports strategy development for new products, product positioning, marketing communications (advertising, public relations, and sales promotion), pricing, personal selling, distribution, customer service and partnerships and alliances. MIS gives the foundation for the development of information system-dependent e-commerce strategies.

Scope 3. Market Monitoring:

MIS enables the identification of emerging market segments, and the monitoring of the market environment for changes in consumer behaviour, competitor activities, new technologies, economic conditions and governmental policies at the time of using market research and market intelligence.

Scope 4. Wider Applications:

Under modern marketing ideologies, MIS includes operational, sales and marketing process-oriented systems, which serve in daily marketing operational activities such as direct mailing (database marketing), telemarketing and operational sales management. The users are middle management and operative sales and marketing personnel.

Scope 5. Support Management and Decision Making:

Marketing information systems support management decision making. Management has five distinct functions and each of them needs support from MIS. These are planning, organising, co-ordinating, decision-making and controlling.

Scope 6. Functional Integration:

MIS the co-ordination of activities within the marketing department and between marketing and other organisational functions like engineering, production, manufacturing, product management, finance, logistics, and customer service.

Marketing Information System Characteristics

1. MIS is an ongoing process. It operates continuously.
2. MIS acts as a data bank and facilitates prompt decision-making by manager.
3. MIS operates in a rational and systematic manner and provides required information.
4. MIS is future-oriented. It anticipates and prevents problems as well as it solves marketing problems. It is both a preventive as well as curative process in marketing.
5. The gathered data is processed with the help of operations research techniques. Modem mathematical and statistical tools are available for problem-solving in the field of marketing.
6. MIS is a computer-based method of data collection, processing, and storage.
7. Management gets a steady flow of information on a regular basis — the right information, for the right people, at the right time and cost.
8. Marketing Information System stands between the marketing environment and marketing decision-makers. Marketing data flows from the environment to the marketing information system. Marketing data is processed by the system and converted into marketing information flow, which goes to the marketers for decision-making.

In the past, most decisions were made on the basis of reports prepared through manual labour. Today, managers, with the help of specialists, can employ sophisticated mathematical and statistical techniques, such as simulation, allocation models, PERT network, inventory models, and similar quantitative models to minimise the risks of doing business in a real-time MIS environment.

They can do this on the basis of up-to-date information recalled or retrieved from the computer’s database. Computer is now regarded as an indispensable ready reckoner for effective managerial decision-making. The introduction of computers has facilitated the setting up of Marketing Decision Support System (MDSS).

The System comprises collection, storage, analysis and reporting of marketing data. MIS is normally centralised, whereas MDSS is decentralised and allows marketing and sales managers to interact directly with the database.