Management Studies: Marketing Information System

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Major Tasks of Marketing for the Success in Marketing

Marketing management has to do a set of tasks necessary for success in marketing. The basic tasks of marketing are as follows:

1. Develop marketing strategies and plans

The first and foremost tasks of marketing are to develop marketing strategies and plans. They consist of following tasks:

Determining the strategies consist of identifying the marketing objectives or goals of the organization, their determination, and modification as well as determination of specific resources to achieve objectives or goals set. They are concerned with product, price, channel, promotion, competitors, etc.
Marketing plans involve mangers by which the marketing goals can be achieved. They involve deciding policy, strategy, tactics, procedures, rules and regulations and marketing programs, budgets and schedules to achieve the long-term as well as short-term goals.
Marketing strategies and plans allocate economic, physical and managerial resources of the organization for future.
They assess and analyze strength and weakness, opportunities and threats (SWOT).

2. Creating marketing information system

It is concerned with understanding what is happening inside and outside the company. Simply there are four components of marketing information. They are Internal Record System, Marketing Intelligence System, Marketing Research and Decision Support System.

3. Build customer relationship

Marketing needs to build customer relationship. Building customer relationship is a very effective way to increase satisfaction and sustain in market. The relationships can be built by using the emerging concepts such as relationship marketing and customer relationship management.

4. Build strong brands

Marketing needs to build strong brand. It is also a major task of marketing. Strong brand helps in promotion, value creating, image development, product positioning, brand loyalty and expansion of product lines.

5. Determine marketing mix

Marketing needs to create and determine and effective marketing mix to satisfy needs of target markets. It is the combination of four inputs such as the product, the price, the place and the promotional activities. Different marketing mix is essential for different groups of customers.

6. Deliver value

Marketing needs to deliver value to the target customers. Value is the ratio between what the customers pay and what they receive. Marketing must determine how to properly deliver the value embodied by the products and services to the target market. Customers’ product choice is guided by value. So, marketing should add maximum value to the customers.

7. Communicate value

Marketing needs to communicate value to target markets. It has to develop an integrated marketing communication program that maximizes the individual and collective contribution of all communication activities by which firm attempts to inform, persuade, remain and reassure consumers about the brands. For this, marketing has to set up mass communication programs consisting of advertising, personal selling, sales promotion, public relations and publicity.

8. Create long-term growth

Marketing must take a long-term view of its products and brands and how its profits should be grown. Based on its positioning, it must initiate new-product development, testing and launching.

9. Implementation and control

Marketing must organize its marketing resources and implement and control the marketing plans. It must build a marketing organization that is capable of implementing marketing plans and strategies. Similarly, it must find out any deviations between achieved performances against planned or budgeted performance using predetermined standards. It provides feedback about marketing planning and strategies.

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Customer Relationship Management (CRM): Meaning and Steps for Reducing Customer Defection Rate

Customer relationship management is a combination of policies, processes and strategies implemented by an organization to unify its customer interactions and provide a means to track customer information. It involves the use of technology in attracting new and profitable customers, while forming tighter bonds with existing ones.

Customer relationship management pulls together, analyzes and provides easy access to customer information from all these various touch points. It helps to assess the value of individual customers, identify the best ones to target and customize the company’s products and interactions to each customer.

The purpose of customer relationship management is to enable a company to better service its customers through the introduction of reliable service, automated processes, personal information gathering and processing and self-services. It attempts to integrate and automate the various customer serving processes within a company. It can be done through the use of multiple communication channels (phone, WAP Wireless Application Potential, Internet etc.)

Customer relationship management involves three general areas of business. They are as follows:

Marketing information system: It provides information about the business environment, including competitors, industry trends, and macro environmental variables.
Sales-force management system: It automates some of the company’s sales and sales-force management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance.
Customer service system: It automates some service requests, complaints, product returns, and information requests.

Steps for Reducing Customer Defection Rate

In order to reduce or control the defection rate of the existing customer, the marketing companies need to follow the following steps:

Define measurement basis for retention rate: For reducing customer defection rate, first of all, the measurement basis for retention rate should be defined. For a newspaper, renewal rate is a measure of retention. For college, it is admission in second year after completing first year.
Analyze causes of defection: For reducing customer defection rate, the reasons for defection should be analyzed. The major reasons for defection can be poor service, poor products, high price, inconvenient distribution etc.
Calculate loss of profit: Customer defection results in loss of profit. Profit loss from lost customer should be calculated in terms of life time value of lost customers.
Introduce anti-defection measures: For reducing customer defection rate, the company should introduce anti-defection measures such as extra benefits and services that add value.
Find out cost of reducing defection rate: The cost of anti-defection measure such as extra benefits or services should be calculated. The cost should be less than benefits of reducing defection rate.
Listen to customers: Customer feedback is essential for reducing defection rate. Exit interviews of customers can also be useful. Complaints and suggestions should be carefully handled.

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Components of Marketing Information System, Marketing Research System

Market research, marketing intelligence, internal records and information analysis are the important components of marketing information system.

1. Marketing Research System

The orderly research conducted to solve special market related problems is called marketing research system. While carrying out marketing researches, goods or services, price, place, promotion, customers, sale competition etc. are deeply studied and carefully analyzed using different research methods and tools. The main purpose of marketing research is to provide reliable and sufficient information needed for taking marketing related decisions. In marketing research, at first problems should be defined. Then gradually, objective of the research should be prepared, research plan be developed, necessary information be collected and analyzed and conclusion be drawn. The major sectors of marketing research are as follows:

a) Product research: Product research is one of the important areas of marketing research. While researching a product, a detailed study and analysis is done on development of new product, product life cycle, brand loyalty, product positioning, product experiment, packaging, design etc.

b) Price research: Price research is also another important research area of marketing research. While researching price, detailed study and analysis is done on the method of pricing, trend of pricing, cost structure, price of competitors’ products and their pricing policy.

c) Place research: The other important area of marketing research is place research. While researching a place, a detailed study and analysis is done on warehouse, transport, distribution channel, channel structure, delivery cost etc.

d) Promotion research: Promotion research is also one of the important areas of marketing research. While researching a promotion, a detailed study and analysis is done on the effectiveness of advertisement, media of advertisement, effect of promotion etc.

e) Consumer research: Research should also be done on consumers in marketing research. A detailed study and analysis should be done on the type and nature of consumers, motivating factors, consumers’ need and wants, consumers satisfaction etc.

f) Sales research: The other important area of marketing research is sales research. While researching sales, a detail study and analysis is done on sales turn-over, market share, sale performance, future market, sale forecasting etc.

g) Competition research: Research should also be done on competitors while carrying out marketing research. Degree of competition and their strategy should be studied in detail and analyzed.

2. Marketing Intelligence System

The mechanism of collecting information related to marketing environment each day is called marketing intelligence. It informs about daily changes in the marketing environment. This helps business organization to identify their weak and strong aspects of competitors and analyze them. As a result, the business organization becomes able to make necessary plans and strategies to get success in competitive market.

Market intelligence is also called environmental scanning. It scans internal and external environmental factors affecting business organization and helps make proper business strategy to ensure organizational success.

There are two sources of marketing intelligence. They are (a) formal source and (b) informal source. Sales men, intermediaries, information centers, experts, private agencies etc. are formal sources and newspapers, trade journals, magazines, employees etc. are informal sources.

a) Formal sources: The formal sources of marketing intelligence are as follows:

Salesmen: Salesmen perform their works living in their respective fields. So, they directly know about the changes taken place in market. A business organization should collect all information of such changes from salesmen and analyze them. The organization should make the salesmen skilled for this purpose and motivate them for good performance.
Intermediaries: The intermediaries include dealers, distributors, wholesalers, retailers etc. They remain acting as intermediaries of different products in the markets. They know everything about market. So, a business organization should motivate them to get important information.
Marketing information center: An information center can be established under marketing information system. In this system, a business organization secretly keeps its employees in competitors’ organizations as secret agents to collect information. Such secret agents send all necessary information about their policy, program, strategies etc.
Specialist/expert: A business organization may also appoint specialists for collecting market information. Such specialists become skilled in scanning market environment.
Private agency: A business organization may buy market information from private agencies. Such private agencies become efficient in collecting market information and analyze them.

b) Informal sources: The informal sources of marketing intelligence are as follows:

Reading newspapers, magazines, trade journals etc.
Having interactions with production manager, financial manager, personnel manager, research and development manager, sales manager, employees etc.
Having interaction with customers, intermediaries, other concerned persons etc.

3. Internal Record System

The records kept as systematic arrangement of different activities done within a business organization is called internal record system. Internal record is an easily available source of important records.

a) Customer related record: The information about customers’ demand, their profile etc. is provided by customer related records. Order letters, bills, invoices, stock record, shipment paper etc. are included in this record.

b) Sales related records: Sales record provides information related to customers’ behavior, their expectation, sales quantity, sales trend, market segmentation etc. Such information can be found from sales record.

c) Other records: A business organization also keeps other records besides sales related records and customers related records. They are: special report, annual report, audit report, financial report etc. Such reports also provide useful information.

4. Marketing Decision Support System (MDDS)

Marketing decision support system is also known as decision support system- DSS. It is a co-ordinated collection of data, system, tools and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action. Marketing decision support system adds speed and flexibility to the marketing information system. According to William J. Stanton, DSS is a procedure that allows a manager to interact with data and methods of analysis to gather, analyze and interpret information. MDSS has the methods for analyzing data. These methods range from simple procedure such as computing ratio or graphs to sophisticated statistical techniques and mathematical models. The following figure depicts the relationship in a decision support system:

Structure of a decision support system

The components of marketing decision support system are as follows:

a) Data bank: A business firm collects different information from different sources. The store where such information is kept is called data bank. Every necessary kind of information can be found in such data bank.

b) Method bank: Different kinds of statistical tools are needed to analyze collected information. For example: average percent, classification, tabulation, regression, co-relation, survey, diagram, cluster analysis, factor analysis etc. The store to keep such different methods is called method bank.

c) Model bank: Decisions need to be taken on different heads in marketing. Decision should be rational and effective. Different kinds of quantitative models should be used to bring simplicity and effectiveness in decision-making process. These models define interrelationship among different elements. These models include sale response, model, new product pretest model etc.

Marketing Information System - Meaning

Marketing information system is the mechanism which provides all the necessary information and data to the decision maker on all marketing related issues. It gives regular flow of information about goods or services, price, advertisement, sale, competition etc. The important technology to scan and monitor external environmental

components is marketing information system. So, it is also called the life-blood of marketing. It collects important information from different sources, analyzes them and distributes to the decision maker.

This is the age of information revolution. Marketing managers need regular information to find out changing wants and needs to customers. Besides this, information is also necessary to know strong and weak aspects of competitors and make distribution channel effective. In fact, whatever a manager does is done only with the help of information. He/she cannot take decision on any issue without information. So, marketing information system should be developed in business organization for taking rational and effective decisions.

Facts, estimates, opinions etc. are included in marketing information. As important and great decisions are taken on the basis of the information, it (information) should be complete, accurate and updated. Generally, a business organization wants to get information about (a) expectation of customers about the specialty of goods (size, color, design, type, quality etc.), (b) quantity of demand at a time, (c) price of the goods wanted by the customers, (d) distribution channel chosen by customers (e) buying motives of customers (f) dealers’ behavior (g) degree of competition (h) government policy affecting market etc. from the marketing information system.

Marketing information system is a regular process. It never ends. It is very important for a marketing manager. He/she makes plans, programs, policies, strategies etc. with its help. Structured, human activities, machines, technology etc. are included in marketing information system. They are orderly used for taking marketing decisions. Different scholars and experts of marketing have defined it differently; among them some important ones have been given as follows:

According to prof. Philip Kotler, “A marketing information system consists of people, equipment and procedures together, sort, analyze, evaluate, and distribute needed, timely and accurate information to marketing decision maker.”

According to Prof. William J. Stanton, “Marketing information system is an ongoing, organized procedure to generate, analyze, disseminate, store and retrieve information for use in making marketing decisions.”

According to Busch and Houston, “A marketing information system consists of structured, interacting complex of persons, machines and procedures designed to generate and orderly flow of information sources for use and input to marketing decision making.”

In conclusion, marketing information system is an ongoing organizational process which includes the activities such as collection of information, sorting, analysis, evaluation, selection, distribution, acquiring etc. Men, equipment, procedures are orderly used for taking marketing decisions in it. Marketing information system should be able to give regular report, up-to-date information and find the trend.

Features of Marketing Information System

The main features of marketing information system are continuous process, accuracy, reliability and completeness, constancy and accessibility, interrelated components, right time etc. They are made clearer by the following figure:

Features of Marketing Information System

1. Continuous process

The important function of marketing information system is to collect necessary information, select, analyze, review and evaluate them for taking proper decision and controlling. This function goes on regularly. So, marketing information system is a continuous process.

2. Accuracy, reliability and completeness

Marketing information system provides accurate, reliable and complete information for taking rational and quick decision. Such types of information become compulsory in a competitive environment.

3. Constancy and accessibility

The bases of information provided by marketing information system become same. So, information becomes constant and uniform. Similarly, information can be easily obtained. Due to the tremendous development in information technology, consistency and uniformity in flow of information have become possible and easily accessible.

4. Interrelated components

Marketing research, marketing intelligence, internal record and information analysis are the components of marketing information system. The components have an important role to make information complete, reliable and updated.

5. Right time

Decision should be rational and quick. If there is no quickness in decision, it becomes meaningless. This means, if a decision to be taken today is taken tomorrow, it becomes meaningless and cannot work. Marketing information system provides accurate information in proper time for taking quick and rational decision.

Importance of Marketing Information System

Marketing information system plays an important role in market expansion, effective marketing plan, environmental scanning and monitoring, want creation and delivery, marketing programme formulation and implementing, evaluation and control.

1. Expansion of market

Marketing information system plays an important role in market expansion besides conducting daily organizational functions. It provides necessary information to promote market from local to national, national to regional and regional to global market. In the lack of marketing information system, expansion of market becomes impossible. For example, goods are to be shipped to American or European markets, it becomes necessary to get information about the wants, needs, priority of consumers of these countries and market trend, price, quality, competition etc. in the markets. Such information is possible only through marketing information system.

2. Marketing plan

Organizational success in competitive market depends on effective plans. Sufficient and reliable information about customers’ wants, needs, changing fashion, strong and weak aspects of competitors, customers’ brand loyalty, buying behavior, and buying motives etc. become necessary making effective plans. Marketing information system helps in making effective marketing plans by providing information about such things.

3. Environmental monitoring and scanning

Environmental monitoring and scanning are the important organs of marketing information system. Business organizations should monitor economic, political, legal, social, competitive, technological and other elements regularly. Changes in such environmental elements provide opportunities on the one hand and threats on the other. So, environmental elements should be scanned, opportunities be utilized and threats be faced.

4. Want creation and delivery

To get success in competitive environment, a business organization should be able to create wants of the customers and deliver goods to satisfy their wants. Market research should be conducted and analysis be made to identify customers’ wants and make them realize such wants. For this, marketing information system is needed. As this psychological aspect of marketing, wants should be created only after clearly studying the customers and goods or services should be produced accordingly.

5. Marketing program formulation and implementation

Success of a business organization depends on effective marketing plans and their implementation. Marketing information system collects information about customers’ wants, needs, product price, discount, commission, sale condition, possible demand etc. and analyzes and disseminates such information, which is indispensable for making marketing plans and implementing them. So, marketing information system is also very important to make marketing plans and implement them.

6. Evaluation and control

Regular evaluation and control of marketing program is an important task of marketing management process. What types of programs become successful, what types of programs can help to achieve organizational goal to what extent and what changes or improvement are needed in the programs etc. are the matters related to study, evaluation and control which can be done only with the help of marketing information system.

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