Marketing Information Systems PDF

Marketing Information Systems BACKGROUND Dr. Hayel Ababneh Al al-Bayt University  What is Marketing Information Systems? The classical organization of enterprises around activities and functions (marketing, manufacturing, finance, human resources, etc.) guided the de...

Marketing Information Systems BACKGROUND Dr. Hayel Ababneh Al al-Bayt University  What is Marketing Information Systems? The classical organization of enterprises around activities and functions (marketing, manufacturing, finance, human resources, etc.) guided the development of operational information systems oriented to each function. Each functional information system makes use of the various types of information systems. Thereby, a marketing information system may contain MIS, DSS or ES subsystems, depending on the attended users. The MkIS are an effective tool for the conversion of raw data into useful information. An MkIS can be thought as a set of procedures and methods for the analysis and presentation of information that is to be used in decision-making. HAYEL ABABNEH – Al al-Bayt University  What is Marketing Information Systems? A marketing information system, or an MkIS, is a system for gathering, storing, analyzing and distributing valuable marketing data to help marketers make better decisions. Marketing Information Systems (MkIS) are systems that involve the collection, analysis, and presentation of data related to marketing. It is primarily used by marketing decision- makers to improve their planning, implementation, and monitoring. Marketing Information Systems involve people, technology, equipment, and various processes, which all work together continuously; gathering, sorting, analyzing, and distributing accurate and up-to-date information for decision-makers in marketing. The input of a marketing information system focuses on collecting relevant internal and external data to analyze and interpret. The output of a marketing information system relates to distributing the findings to all essential internal marketing team members and managers. Marketers can then use the data to make more informed marketing decisions to promote the success of the business. HAYEL ABABNEH – Al al-Bayt University  A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed tiny and accurate information to marketing decision makers. The company’s MKIS should represent across between what managers think and they need, what managers really need and what is economically feasible. “A structural, interacting complex of persons, machines and procedures designed to generate and orderly flow of pertinent information, collected from both intra and extra firm sources, for use as the basis for decision making in specific responsibility areas of marketing management”. HAYEL ABABNEH – Al al-Bayt University Marketing Information System MkIS collects, analyses, and supplies a lot of relevant information to the marketing managers. It is a valuable tool for planning, implementing and controlling the marketing activities. It then collects and analyses the information. It supplies this information to the marketing manager at the right time. Marketing Information System The business function of marketing is concerned with the planning, promotion, and sale of existing products in existing markets, and the development of new products and new markets to better serve present and potential customers. MkIS integrate the information flow required by many marketing activities. It consists of people, equipment, and procedures to gather, sort, analyse, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. MkIS is a permanent and continuous process. Marketing Information System MkIS includes all facts, estimates, opinions, guidelines, policies and other data which is necessary for taking marketing decisions. This information may be collected from both internal and external sources. ○ From customers, competitors, company salesmen, government sources, specialized agencies, and so on. This information is analyzed. Then, it is supplied to the marketing managers. The marketing managers use this information for taking marketing decisions. MkIS also evaluates and stores the information. MkIS uses modern technology for collecting, analyzing, storing, and supplying information. MkIS provide information for: Internet/intranet web sites and services make an interactive marketing process possible where customers can become partners in creating, marketing, purchasing, and improving products and services. Sales force automation systems use mobile computing and Internet technologies to automate many information processing activities for sales support and management. Other marketing systems assist marketing managers in product planning, pricing, and other product management decision, advertising and sales promotion strategies, and market research and forecasting. Planning, control, and transaction processing in the marketing function. MkIS provide information for: Control Reporting Systems support the efforts of marketing managers to control the efficiency and effectiveness of the selling and distribution of products and services. Analytical reports provide information on a firms actual performance versus planned marketing objectives. Characteristics/Features of MkIS Continuous system: MkIs is a permanent and continuous system of collecting information. It collects information continuously. Basic objective: The basic objective of MIS is to provide the right information at the right time to the right people to help them take right decisions. Computer based system: MkIS is a computer based system. It used computers for storing, analyzing and supplying information. It also uses micro films for storing information. Therefore, it is very quick and accurate. Future oriented: MkIS is future oriented. It provides information for solving future problems. It is not past oriented. Characteristics/Features of MkIS Used by all levels: MkIS is used by all three levels of management, top, middle, and lower. It used for making marketing plans, policies and strategies. This is used to solve marketing problems and to take advantage of busiess opportunities. Sources: MIS collects information from both, internal and external sources. For example, information is collected from company records, publications, etc. Collects marketing information: MIS collects all types of marketing information. It collects information about the consumer competition, marketing environment, government policies, etc. It supplies this information to the marketing managers. Helps in decision making: MIS supplies up to date and accurate information. It helps marketing managers to take quick and right decisions. Other Features MkIS provides facilities for analyzing effectiveness of advertisement campaigns. It helps in finding customer clusters It also helps in converting potential customers to buyers Helps in setting price of products Helps in sales trend analysis  Marketing decisions "Marketing decisions" is an important task for every marketing manager to successfully implement the marketing plan of the firm. In general marketing decisions made by organizations are based on what is called a “marketing mix” which influence the development of a given marketing program. The most lasted marketing mix framework is “the four P’s,” which stands for product, price, promotion, and placement. By manipulating and responding to these elements that make up this marketing mix, or, in other words, by making marketing decisions based upon the four P’s, organizations can develop increasingly successful marketing strategies. HAYEL ABABNEH – Al al-Bayt University  Different Types of Marketing Decisions A marketing manager has to take many marketing decisions to operate the day-to-day activities of a business organization. The purpose of these marketing decisions is to achieve the pre-determined marketing objectives of an organization. There are four areas or aspects, which always kept in mind, when a marketing manager intends to make different sorts of marketing plans for different products and services. Includes: Product Price Placement (Distribution) Promotion HAYEL ABABNEH – Al al-Bayt University  There are certain activities that are included as the elements of marketing mix like product planning, branding, pricing, distribution channel, packaging, promotions, advertising, physical handling, display, personal selling, servicing and fact finding & analysis and many more. HAYEL ABABNEH – Al al-Bayt University  Product decisions The product can be considered the "goods" that satisfies one or more consumer demands. Product is related to tangible, physical products as well as services. There are certain decisions that are related to the product. Like: Brand Name Quality Functionality Warranty Safety Styling Packaging Accessories & services Repairs & support HAYEL ABABNEH – Al al-Bayt University  Price Decisions The price represents both the economic cost of producing a product or service and the value of a product or service and as perceived by the customers. Marketing decisions include price decisions which are elements of the marketing mix in which different aspects of marketing communication occurs. Following are some of the most important Marketing Decisions related to pricing: ▪ Suggested retail price. ▪ Pricing Strategy (penetration, skim etc) ▪ Bundling ▪ Seasonal pricing ▪ Price discrimination ▪ Cash & early payment discounts ▪ Volume discounts & wholesale pricing ▪ Price flexibility HAYEL ABABNEH – Al al-Bayt University  Placement decisions Placement is also referred to as "distribution," and often refers to where a given product will be delivered. Following are some of the most important Marketing Decisions related to Placement decisions: Distribution channels Market coverage (Exclusive, inclusive or selective distribution) Specific channel members Warehousing Logistics Inventory management Transportation Order processing Distribution centers HAYEL ABABNEH – Al al-Bayt University  Promotion Decisions Promotion refers to the communication techniques that are used to bring the public’s attention to a given product or service. The information about the product is communicated with an objective to produce positive customer response. Following are some of the important promotion decisions. Promotional strategy Advertising Sales promotion Personal selling & sales force Marketing communication budget Public relations & publicity HAYEL ABABNEH – Al al-Bayt University  What Purpose do Marketing Information Systems Serve? MkIS have the ultimate objective of helping the marketing decision-maker to make better, more informed decisions. There are several applications for these decisions that can have very impactful outcomes for a business. MkIS can help businesses determine what their customers want and customer perceptions of the product or service and the organization as a whole. HAYEL ABABNEH – Al al-Bayt University  What Purpose do Marketing Information Systems Serve? These insights can impact the organization in many different ways to assist with different kinds of decisions. Product development teams can use insights generated by MkIS to determine which direction they should be moving in terms of their new product pipeline. Data about what customers are looking for and which elements of current products or services they like and dislike can guide the development of future products or add-ons to current products or services. The insights can also guide the company’s strategic marketing direction by assisting in providing both feedback about current products and services, as well as perceptions that may impact expansion plans, the launch of new products, or the opening of new locations. In addition to impacting the strategy, it can also affect the pricing and distribution of products by providing valuable feedback on price points, sales trends and locations, and other useful related data. HAYEL ABABNEH – Al al-Bayt University  What Purpose do Marketing Information Systems Serve? MkIS can be very helpful in product positioning by providing useful feedback that could help marketing teams better segment and target their customers. Doing this successfully can help increase profits and prevent a lot of both time and money from being wasted. This better positioning of the product can, in turn, drive more effective marketing communications and campaigns, which can also help companies to seek more successful partnerships or alliances. For those businesses looking to team up with others, knowing the customer and the brand perception is key, and MkIS can provide extremely useful feedback to get an accurate grasp of this in real-time. HAYEL ABABNEH – Al al-Bayt University  Examples of Marketing Information Systems Loyalty Cards The loyalty card you use at a grocery store is an easy example. Every time you swipe the card with your purchase to get points or discounts, the transaction details are recorded. What you buy, what time the purchase is made, at which location, and how frequently would all be some of the data stored with these transactions. These can then inform a company that can make decisions based on these details, combined with those of other shoppers and additional factors. When the store combines these details from thousands of shoppers, a process that would be almost impossible to do manually, but which is possible with a MkIS, the grocery store can use it to improve their sales and marketing, directing advertising and specials at specific groups of people and even selling this data to third parties to make money from it. HAYEL ABABNEH – Al al-Bayt University  Examples of Marketing Information Systems Airlines Another example would be airlines – there is a lot of data to gather in various places. Their MkIS might include: data from customers’ (private and corporate) loyalty cards, both personal details and your flying habits, food preferences, etc. data from other airlines online about their pricing, routes, discount rates, etc. data from inflight feedback (logged by cabin crew and from passenger feedback forms) external data, which could be sold to them by caterers or other vendors, and then external market data. HAYEL ABABNEH – Al al-Bayt University  Examples of Marketing Information Systems Airlines All of these different sources (and others, such as social media) and types of data would be combined in the MkIS to provide the airline with details not only to help them be able to come up with smart suggestions such as routes you’d like to fly, which you’d get through a mailer or a suggestion on the airline home page, but also to help the company decide whether to extend capacity on more popular routes at certain times of the year, cut down on other routes, or add a destination to their network because it’s what all their competitors are doing. All of this information is gathered together and presented in many ways to different groups of decision-makers, depending on what they want from the information. Being able to pull certain insights and suggestions from this vast amount of cumulative data and make sense of it to assist with and benefit business decisions is a huge advantage for companies who know how to use it well. HAYEL ABABNEH – Al al-Bayt University  Examples of Marketing Information Systems Hotel reservation services They can keep track of demand and adjust rates accordingly as it changes. During the off- season, they can also provide loyalty discounts to their repeat customers. Electric Vehicle (EV) Suppose a company was to design a new type of electric vehicle (EV) that would become a direct competitor to Tesla. In that case, the company should have extensive information on all the current and potential EV consumers. Necessary market information would include customer preferences, the value of the EVs, and what a new entrant can offer to make customers want to buy the new EV. HAYEL ABABNEH – Al al-Bayt University  Advantages of MkIS Organized Data Collection – Lots of data can be collected from the market. Organizing data is very important else the data is meaningless. Thus MIS helps you to organize your database thereby improving productivity.  Advantages of MkIS A broad perspective – With a proper MkIS in place, the complete organization can be tracked which can be used to analyze independent processes. This helps in establishing a broader perspective which helps us know which steps can be taken to facilitate improvement.  Advantages of MkIS Storage of Important Data – Several times in pharmaceuticals, when one drug is being produced they may need data of another drug which was produced years back.  Advantages of MkIS Avoidance of Crisis – the best way to analyze a stock (market share) is to see its past performance. With an MkIS, you can know where your organization is moving and probably avert a crisis long before it has taken place. Ignoring hints received from MkIS reports is foolhardly.  Advantages of MkIS Co-ordination – Companies may have huge number of process which needs to be coordinated. These companies depend completely on MIS for the proper running of the organization.  Advantages of MkIS Analysis and Planning – MIS is critical for planning. You cannot do planning without information. For planning, the first thing which is needed is the organizations capabilities, then the business environment and finally competitor analysis.  Advantages of MkIS Control – Just like MIS can help in a crisis, in normal times it provides control as you have information of the various processes going on and what is happening across the company. Thus it provides you with a sense of control.  Advantages of Marketing Information Systems? Aides in Decision Making. MkIS can save vast amounts of money by targeting marketing campaigns to the right audiences, by using the information that they store in smart ways, by being aware of and able to change the perception of their company, and also by knowing what people want, all to enable good decisions around which projects to go ahead with and which not to pursue. Valuable Source of Information. When these systems are in place in a company, and data is being systematically gathered, it becomes a precious source of information for the company as it collects, building up a history for the company that it can learn from, that warns it of both future challenges and opportunities, and that can be used intelligently for increasing company profits. More Consumer-Relevant Marketing. What individuals are exposed to, becomes more relevant for them with good use of these systems and might expose them to products and services they need or are interested in. HAYEL ABABNEH – Al al-Bayt University  Dis-Advantages of MkIS Maintenance, complexity and setting up a MIS are one of the major hindrances to Marketing information systems. Furthermore, wrong information being fed in MIS can become cumbersome and appropriate filters need to be established.  Disadvantages of Marketing Information Systems? Requires Time, Money, and Expertise. On the downside, good MkIS can require time, money, and expertise for companies. As with putting any system into place, there will be costs involved. After the upfront cost of the hardware or software required to run these systems, the largest investment is likely to be in staff – learning, operating, maintaining, and optimizing these systems to be able to take full advantage of them. Adoption Issues and Resistance. Further, people in the marketing decision-making roles need to have an open mind to using these systems. When the system presents data, results, or insights that are counter-intuitive or not what the decision-maker expected, the decision-maker has a choice about whether to trust the system and follow its recommendation or not. Sometimes there needs to be a blend of rational judgment and trust in the system. There may be resistance from the users or adoption issues implementing such systems, particularly if the results are surprising or the outcomes are not as expected. HAYEL ABABNEH – Al al-Bayt University  Disadvantages of Marketing Information Systems? System Errors. There can also be genuine errors in the systems, with the weighting of factors being incorrect or parts of the system giving skewed results. Once again, this is where the time investment for the running and optimization of these systems comes into play, and ensuring that the company has people who can select the correct data to be inputted into the system, the correct metrics to measure. HAYEL ABABNEH – Al al-Bayt University Why Do You Need Marketing Information Management? There are many different ways that MkIS can help companies drive growth. Key benefits include: ensuring you understand your business better, gaining important guidance for designing successful products, and improving company operations. HAYEL ABABNEH – Al al-Bayt University  The Roles of MkIS Marketing decision-makers require information about the evolution of issues related with the marketing context (markets, goals, channels, competitors, public relations and macroeconomic possibilities) in order to perform analyses, planning, integration and control. For these reasons, the management of marketing information through the corresponding information systems has become one of the most vital issues for effective marketing. HAYEL ABABNEH – Al al-Bayt University  The Roles of MkIS A marketing information system can be beneficial for multiple types of marketing decisions, such as: Control decisions: Middle-level marketing manager decisions related to corrective actions based on deviation from strategic plans implemented by higher-level marketing managers. Operational decisions: Decisions related to the day-to-day activities of marketing professionals, especially related to accomplishing specific tasks. Strategic decisions: High-level marketing manager decisions about matters that affect the entire organization, such as organizational policies, objectives and structure. HAYEL ABABNEH – Al al-Bayt University  Types of data in a Marketing Information System Marketing information systems handle different types from multiple sources. The common types of data in a data marketing system are: 1. Acquired databases Databases often store large amounts of marketing and sales data and customer information, and some companies may purchase access to these databases for little to no cost. Businesses may enter the data they purchase into their marketing information system to help them make better, more informed decisions. For example, there are companies that specialize in gathering data related to business trends and consumer behavior and business trends and generating reports to sell. Similarly, companies may purchase information from government databases to learn about the demographic or economic information of companies, groups or specific individuals. HAYEL ABABNEH – Al al-Bayt University  Types of data in a Marketing Information System 2. Internal company data Marketing information systems allow you to turn internal company data into valuable insights. For example, you may input data related to marketing activities or sales to generate reports. Also, you may integrate your marketing information system with an internal company communications network or intranet to gather information about certain employees, departments or business units. HAYEL ABABNEH – Al al-Bayt University  Types of data in a Marketing Information System 3. Marketing intelligence Marketing information systems allow you to gain insights from the marketing intelligence data you gather about your target market. For example, explore options to gather marketing intelligence data from your competitors' websites or industry trade publications. You may also explore options that are less automated and more manual, such as talking with distributors, making observations, attending trade shows or testing products. HAYEL ABABNEH – Al al-Bayt University  Types of data in a Marketing Information System 4. Marketing research Marketing information systems allow you to integrate the marketing research and data you gather from custom and syndicated research reports and primary or secondary research. It's important to find as much specific and unique information as possible, especially regarding your customers, competitors and overall business environment. This will help you gain more valuable insights to make better decisions. HAYEL ABABNEH – Al al-Bayt University  Marketing information system process Marketing information systems use a sequential process to synthesize data and share findings to influence decision-making. Here are the steps of the marketing information system process: 1. Determine the appropriate marketing metrics such as: 1. Customer Acquisition Cost (CAC) 2. Conversion Rate 3. Return on Investment (ROI) 4. Customer Lifetime Value (CLV) 5. Click-Through Rate (CTR) 6. Social Media Engagement 7. Cost Per Lead (CPL) 2. Gather relevant data from external and internal sources. 3. Graph the data to visualize trends. 4. Distribute the trend information to the appropriate departments. 5. Use the data to determine the right course of action to take. HAYEL ABABNEH – Al al-Bayt University  Thank you Dr. Hayel Ababneh HAYEL ABABNEH – Al al-Bayt University