Marketing Information Systems PDF

Marketing Dr. Hayel Ababneh Dept. of Business Management information systems Al al-Bayt University HAYEL ABABNEH – Al al-Bayt University  Dr. Hayel Ababneh...

Marketing Dr. Hayel Ababneh Dept. of Business Management information systems Al al-Bayt University HAYEL ABABNEH – Al al-Bayt University  Dr. Hayel Ababneh Dept. of Business Management MkIS: Subsystems and Components Al al-Bayt University HAYEL ABABNEH – Al al-Bayt University  Subsystems of MkIS The processing of information is performed by the four subsystems of the marketing information system, which are described below. 1. Internal reporting subsystem: This subsystem includes all the information that lie within orders, sales, products' cost, products' quality, inventory, cashing, payments, and any other type of reports that circulate within the enterprise. These information are scattered in the various departments of the enterprise. 2. Marketing information search subsystem: The decision-makers are able to catch on the actions of the competitors or the needs of their consumers and make on time decisions. HAYEL ABABNEH – Al al-Bayt University  3. Market survey subsystem: They are primarily conducted for analysing the market shares, analysis of sales, study of the market trends, analysis of the characteristics of the market, study of the pricing policy, etc. 4. Marketing decision analysis and support: This subsystem consists of a statistical models database (descriptive statistics procedures, data analysis models) and of a decision models database (pricing models, consumer behaviour models, product design models, etc). HAYEL ABABNEH – Al al-Bayt University  All the marketing information systems consist of: 1. The information collection module. The information is acquired from: External sources (secondary sources, competitors, distribution channels, interesting markets, etc). Internal sources (existing information, sales time series, cost of products, financial dimensions of the enterprise, etc). Primary information collected through the conduction of market surveys. HAYEL ABABNEH – Al al-Bayt University  2. The information processing module: It consists of: The database management subsystem in which the data is saved. Prior to the storage, data should be codified in order to allow the effective elaboration of the information by the system. The statistical processing subsystem (descriptive statistics, data analysis methods. 3. The user-marketing information system interface subsystem, which is used for the presentation to the decision maker of: General reports on the existing data. Answers to the questions posted by the decision-maker (what-if). HAYEL ABABNEH – Al al-Bayt University Components of MkIS MkIS collects the information through its subsystems. These subsystems are called components. The four main components of marketing Information System are: ▪ Internal Database ▪ Marketing Intelligence System ▪ Marketing Research System, and ▪ Marketing Decision Support System Components of MkIS: Marketing Intelligence It collects information from external sources. It provides information about current marketing environment and changing conditions in the market. This information can be easily gathered from external sources like: magazines, trade journals, commercial press, so on. This information can be collected from the Annual Reports of the Trade Association and Chambers of Commerce, Annual Report of Companies, etc. The Salesmen’s report also contains information about market trends. Components of MkIS: Marketing Intelligence The information which is collected from external sources cannot be used directly. It must be first evaluated, cleaned and arranged in a proper order. Different types of data visualization software may be used to represent collected data in understandable forms such as charts, diagrams or dashboards. It can be then used by the marketing manager for taking decisions and making policies about marketing. So, marketing intelligence is an important component of MkIS. Components of MkIS: Marketing Decision Spport System These are tools which help the marketing managers to analyse data and to take better marketing decisions. They include hardware, i.e. computer and software programs. Computer helps the marketing manager to analyze the marketing information, it also helps them to take better decisions. In fact, today marketing managers cannot work without computers. There are many software programs, which help the marketing manager to do market segmentation, price fixing, advertising budgets, etc. Evaluating marketing Campaign Return on investment is always a major concern when it comes to marketing or any other business expense. The idea is to check whether the money you put into your marketing plan has resulted in a profit. Must measure the amount spent on each campaign, versus the amount of sales each campaign brought in specifically.  Components of marketing information system A marketing information system should include the following components: A system for recording internally generated data and reports A system for collecting market intelligence on an ongoing basis Marketing analytics software to help managers with their decision making A system for recording marketing research information HAYEL ABABNEH – Al al-Bayt University  1. Internally Generated Data and Reports An organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. Firms are also constantly gathering information related to their Web sites, such as clickstream data. Clickstream data is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don’t buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions of their browsing patterns. Software can be used to automatically count the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent. HAYEL ABABNEH – Al al-Bayt University  Internal reports or records include the data from within the company. Referencing this data can provide you with valuable insights, particularly regarding a company's capabilities, successes and opportunities for improvement. Some examples of data internal reports may include are: Cash flows Inventories Marketing personnel costs Payables Product costs Receivables Sales records Stocks HAYEL ABABNEH – Al al-Bayt University  Big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard. Data mining: A process of extracting the right information from the right places. Data Warehousing: Combining data into one location that makes analysis easier. Then the information is captured and displayed in dashboards: screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail. HAYEL ABABNEH – Al al-Bayt University  2. Analytics Software Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather all kinds of different information from a company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” HAYEL ABABNEH – Al al-Bayt University  The company uses the analytics software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with Web browsing data to gain a better understanding of the individual customers marketing channel preferences as well as other marketing decisions. It helps employees understand these relationships and make high-impact data- driven marketing decisions. HAYEL ABABNEH – Al al-Bayt University  3. Marketing intelligence ▪ Marketing intelligence refers to the data or information from external sources, such as industry associations or trade journals. ▪ It includes data related to the general marketing environment outside of the organization and the specific data within the market. Leveraging this information helps the company better understand their specific marketing and competitors within the market. ▪ Some examples of what marketing intelligence may include are: Changes in customer preferences and tastes Competitors' pricing strategies Competitors' promotion strategies Marketing trends New products in the market HAYEL ABABNEH – Al al-Bayt University  A good internal reporting system can tell a manager what happened inside his firm. But what about what’s going on outside the firm? What is the business environment like? Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? How will rising fuel prices and alternate energy sources affect your firm and your products? Do changes such as these present business obstacles or opportunities? Moreover, what are your competitors up to? HAYEL ABABNEH – Al al-Bayt University  3. Market Intelligence Not gathering market intelligence leaves a company vulnerable. when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and early on locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research. Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. Some companies subscribe to news service companies that regularly provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. HAYEL ABABNEH – Al al-Bayt University  4. Marketing Research Marketing research includes project-based research aiming to answer specific marketing questions. It may include internal and external data and often uses a variety of statistical tools. Processing marketing research includes collecting, organizing, analyzing and interpreting the data. Some examples of what marketing research may pertain to include: Changes in the marketing environment Competitor strategies Customer preference or taste changes New product launches HAYEL ABABNEH – Al al-Bayt University  Marketing research “The systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and service”. Such research may be undertaken by impartial agencies or by business firms or their agencies for the solution of their marketing problems and inclusive term which embraces all research activities carries down in connection with the management of marketing work HAYEL ABABNEH – Al al-Bayt University  Objectives of Marketing research To define probable market for a particular product. To find out general market conditions and tendencies. To assess competitive strengths and policies (SWOT analysis). To indicate the distribution methods best suited to the product and market. To assess the probable volume of future sales. To know customer acceptance (consumer survey). HAYEL ABABNEH – Al al-Bayt University  Search Engines and Corporate Web Sites An obvious way to gain market intelligence is by examining your competitors’ Web sites as well as doing basic searches with search engines like Google. If you want to find out what the press is writing about your company, your competitors, or any other topic you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts. Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of Web sites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar. All the good (and bad) things people have remarked about the company or topic turn up. What a great way to seek out the shortcomings of your competitors. It’s also a good way to spot talent. Radian6 (a similar company) also provide companies with sentiment analysis. Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. Some companies use sentiment analysis to determine how the market is reacting to a new product. HAYEL ABABNEH – Al al-Bayt University  Thank you Dr. Hayel Ababneh HAYEL ABABNEH – Al al-Bayt University