MARKETING RESEARCH & TRENDS IN MARKETING
Marketing Information System
A Marketing Information System (MIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers
A marketing information system (MIS) is a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis. An information system can be used operationally, managerially, and strategically for several aspects of marketing.
A marketing information system can be used operationally, managerially, and strategically for several aspects of marketing.
We all know that no marketing activity can be carried out in isolation, know when we say it doesn‘t work in isolation that means there are various forces could be external or internal, controllable or uncontrollable which are working on it. Thus to know which forces are acting on it and its impact the marketer needs to gathering the data through its own resources which in terms of marketing we can say he is trying to gather the market information or form a marketing information system.
This collection of information is a continuous process that gathers data from a variety of sources synthesizes it and sends it to those responsible for meeting the market places needs. The effectiveness of marketing decision is proved if it has a strong information system offering the firm a Competitive advantage. Marketing Information should not be approached in an infrequent manner. If research is done this way, a firm could face these risks:
1. Opportunities may be missed.
2. There may be a lack of awareness of environmental changes and competitors‘ actions.
3. Data collection may be difficult to analyze over several time periods.
4. Marketing plans and decisions may not be properly reviewed.
5. Data collection may be disjointed.
6. Previous studies may not be stored in an easy to use format.
7. Time lags may result if a new study is required.
8. Actions may be reactionary rather than anticipatory.
The total information needs of the marketing department can be specified and satisfied via a marketing intelligence network, which contains three components.
1. Continuous monitoring is the procedure by which the changing environment is regularly viewed.
2. Marketing research is used to obtain information on particular marketing issues. 3. Data warehousing involves the retention of all types of relevant company records, as well as the information collected through continuous monitoring and marketing research that is kept by the organization.
Depending on a firm‘s resources and the complexity of its needs, a marketing intelligence network may or may not be fully computerized. The ingredients for a good MIS are consistency, completeness, and orderliness. Marketing plans should be implemented on the basis of information obtained from the intelligence network.
An Marketing Information System offers many advantages:
1. Organized data collection.
2. A broad perspective.
3. The storage of important data.
4. An avoidance of crises.
5. Coordinated marketing plans.
6. Speed in obtaining sufficient information to make decisions.
7. Data amassed and kept over several time periods.
8. The ability to do a cost-benefit analysis.
The disadvantages of a Marketing information system are high initial time and labor costs and the complexity of setting up an information system. Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.
The information needed by marketing managers comes from three main sources:
1. Internal company information – E.g. sales, orders, customer profiles, stocks, customer service reports etc
2. Marketing intelligence – This can be information gathered from many sources, including suppliers, customers, and distributors. Marketing intelligence is a catchall term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. IDC, ORG, MARG) who set up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market.
(3) Market research – Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy – this is market research.
1.Evidence of inadequate Marketing Information Systems
In addition to not seeing them in companies for which I have studied and consulted, it is obvious from the ads and commercials that most companies run in the media. When is the last time you saw an ad or commercial that has a built in mechanism, or code, for the advertiser to track the success of the ad?
Over many years, my students at USC continuously analyze ads and commercials of Fortune 1000 companies as part of their homework assignments. As they have discovered, too many ads in various media (print, broadcast, and even online) have no such mechanisms.
Further evidence is provided in marketing industry publications that complain about the lack of specific cradle-to-grave information that ties together marketing efforts with sales and profit results. CEOs of major companies complain about the lack of definitive data all the time. The ultimate evidence is that marketing budgets are slashed in economic downturns. If CEOs and other executives believed that marketing worked efficiently and effectively, they would not look at marketing as a cost item but an investment on which they would realize a return.
Downturns should prompt marketing increases not cuts. Furthermore, there are so many articles that talk about CMOs losing credibility. The primary way a CMO can prove his or her worth is to collect the data on the return the company is realizing on its marketing investment. To do that, a comprehensive marketing information system is required.
2.How to create a comprehensive MIS in a “perfect” world
In a perfect world, an MIS system would be created from the ground up and integrated with all of a business‘s systems and processes. In such a world, every sale and lead could be traced back to the marketing effort that produced it. Also, every complaint or compliment would be tracked to the source. Skilled customer service personnel would quickly turn all negatives into positives, and skilled marketing communicators would create content that incorporated the testimonials. That‘s the dream. The reality falls far short. What is a marketer to do?
3.Creating a “real world” MIS for those that cannot afford to wait
Rather than wait for the dream to materialize, marketers need to improvise. They need a system that enables them to (1) make better decisions and (2) support those decisions with verifiable data. The initial steps of this approach typically involve the following:
1. Look at what systems the company already has in place,
2. Determine what useful marketing information can be gleaned from those systems,
3. Identify the information marketers need that they are not getting from existing systems,
4. Create, or find, additional systems to provide the needed marketing information,
5. Integrate these systems with company wide enterprise systems (if possible and not too costly).
4. Start with the accounting system
A good place to start is the business system that every business has – the Accounting system. What information do businesses get from their accounting system that is useful to marketers?
If the accounting software is well designed and flexible, this information can be sorted in a variety of ways including by (1) Sales person, (2) Product, (3) SKU (stock-keeping-unit), (4) Division or Region, (5) Distribution channel, (6) Reseller, and (7) Season.
The information obtained from the accounting system is typically enterprise-wide and at a macro level. It usually does not give marketers, or their bosses, the information necessary to
(1) determine the effectiveness of the organization‘s marketing efforts; (2) enable it to react quickly to real-time crises and opportunities; or (3) respond rapidly to competitive threats. Some of the information that marketers need from an effective marketing information system includes the following:
1. Marketing strategy feedback (or how well marketing strategies are working)
3. Compliments (testimonials)
4. New Product ideas
5. Competition information
6. Marketplace changes
To capture and properly respond to this information, most marketers need to create a Marketing Information System that augments the macro information provided by their accounting systems.
5.Market Information Form
To minimize paperwork, marketers can collect a lot of the information from the above list on a Market Information Form (or its electronic equivalent). The information collected and how this information is used is summarized below.
1. Complaints. Once collected, complaints are distributed to those that can solve the problem quickly. The objective is to turn the negative into a positive and build a stronger relationship with the offended party. The way companies handle complaints can mean the difference between success and failure in an increasingly competitive marketplace.
2. Compliments. After obtaining permission, marketers use compliments in their marketing communications. Nothing is more effective than bona fide testimonials from customers. Copies are also given to sales people so they can put them in their sales notebooks and use them to impress prospects and close business.
3. New Product ideas. These are fed into the company‘s new product development system.
4. Competition Information. This is given to sales people to put in their sales notebooks so they can use the data to answer objections and close business (with the caveat of not disparaging competitors) and is fed into the company‘s new product development system so that new products can be designed to beat competitors.
5. Strategy feedback. This information is organized by the marketing building blocks (1) corporate image, (2) positioning, (3) product, (4) pricing, (5) distribution, (6) promotion, and (6) marketing information system (yes we need to collect information as to how well our MIS strategies are working). Based on feedback, strategies are adjusted as necessary.
A pad of these forms (or an electronic version) is provided to all the contact points including
(1) Receptionists and secretaries that answer the phone, (2) Sales people, (3) Customer service people, (4) Repair people, (5) Personnel that respond to inquiries and complaints online and on social media, and (6) accounts receivable (since they often hear about complaints when they try to collect on late invoices).
6. Lead Card
Leads are captured on a lead card or its electronic equivalent. Sales people use the lead card to follow up on a prospect‘s interest with the objective of closing the sale. In addition to notes of all contacts, there are four main pieces of information that should be captured on the lead card.
1. Identification of the prospect. If you are selling to a business, most of the information you need is on your contact‘s business card. For additional information you need, your lead card should be designed so you can add it with minimal effort.
2. Product interest. The products you typically sell should be pre-listed on the lead card so sales people can quickly check them off.
3. Degree of interest. This is your sales person's guestimate of how likely the prospect is to buy your product in the current period, which is usually this month. Because the degree of interest is also called ―buying temperature‖ the metaphor for degree of interest that is often is used is Hot for the most interested leads, Warm for the next most interested leads, and Cool for the least interested. The ―Hot‖ leads should automatically update another
MIS report called the Hot List.
4. Lead source. All promotion that you do should have a unique code so that when the lead is captured, you know what marketing activity generated the lead. This lead source should automatically update another MIS report called the Promotion Effectiveness report.
In addition to helping sales people follow up on leads and close business, smart marketers use lead card information for other Marketing Information System purposes, such as the Hot List and Promotion Effectiveness Report described below.
An MIS report called the Hot List contains the following information on ―Hot‖ leads:
1. Prospect name. This could be a business or individual.
2. Decision makers. This is so the sales person does not waste time talking with the wrong person.
3. Product or project proposed. This is what the prospect wants.
4. Proposal date. This is the date the product proposal and estimate of the cost is given to the prospect.
5. Dollar-amount proposed. This is the price of the product proposed.
6. Percent chance of closing in the current period. To qualify for the Hot List, a Hot lead should have at least a 25% chance of closing in the current period (each company should decide their own minimum threshold for Hot).
7. Expected Value (5 multiplied by 6). If the dollar amount proposed is $10,000 and the % chance of closing is ―guestimated‖ to be 50%, the expected value would be $5,000.
8. Objections. This lists the objections that are keeping the prospect from buying.
Sales managers use the Hot List in two ways.
1. Help close sales. The sales manager helps sales people to close Hot leads by coaching them on how best to answer the Objections in column 8 of the Hot List.
2. Dynamic sales forecast. The sales manager helps to insure that the sum of Expected
Values equals, or exceeds, each sales person‘s quota for the month. If the expected values are lower than a sales person‘s quota, the sales manager can encourage the sales person do whatever is necessary to get more Hot leads on the Hot List so that the sum of Expected Values equals or exceeds the quota. The sales quotas of all the sales people should sum to the ―measurable goal‖ of the Marketing Plan.
8.Promotion Effectiveness Report
As each sales person captures the promotion source for each lead on the Lead Card, the information automatically flows onto his or her Promotion Effectiveness Report. Every time a sales person gives a presentation or makes a sale from a lead, that information is recorded on the Promotion Effectiveness Report. The MIS system automatically adds up the total number of the leads, presentations, and sales company-wide for each promotion source.
When compared to the costs of that promotion source, the marketing department can calculate the promotion effectiveness, or ROI, of each promotion. Since totals for leads, presentations, and sales are available in the MIS by sales person, the sales manager can automatically compute the batting average of each sales person and determine the number of leads and presentations each one needs to make his or her sales quota. In this way, the sales manager and the company marketers systematically work together to insure that (1) plan goals are met and (2) the money invested in promotion is not wasted (the ads and promotions that are effective will be repeated and the ones that don‘t will be discontinued).
The systems above (Market Information Form, Lead Card, Hot List and Promotion Effectiveness Report) typically capture information in real time and provide a lot of great information that help the marketing function do a more effective job and prove it to the CEO. Even so, this is not enough. There are still holes in the information marketers need. In an effort to plug these holes, there is one big missing piece – Market Research. There are two big categories of Market Research – Secondary and Primary.
Secondary research is simply research done by others. Perhaps the greatest invention for secondary research is the search engine. Marketers can simply type in search terms in a search window and browse the Internet for any data related to those search terms.
Furthermore, marketers can set up ―alerts.‖ That is, search terms can be entered into a search engine so that the search engine‘s crawlers will continually search for anything that contains those search terms and send you an email when it finds them. There are so many other sites, which marketers frequent, that provide a wealth of information. Just a few examples include: Media Post, Marketing Sherpa, Brand Channel, Hoovers, the CIA World Factbook, and ClickZ.
11 Primary Research
When some big holes remain that still need to be plugged, marketers will often do primary research, which is their own research. Common forms of primary research include surveys, focus groups, experiments, and various forms of crowd sourcing.
Assessing Information Needs
1. There must be a balance between what information is wanted and what is cost effective, obtainable and needed
2. Too much information can be as harmful as too little
3. Information gathering costs can add up quickly
• Information can be obtained from internal company records, marketing
intelligence and marketing research
1. Data warehouses contain all customer information in a single, accessible source
2. Guest history information the most valuable