THE ROLE OF MARKETING INFORMATION SYSTEM IN ENHANCING SALES

The article on this topic (The role of marketing information system in enhancing sales) is an extract from literature review of the project material. The complete project work would be made available when you subscribe for the full material.

CHAPTER TWO

LITERATURE REVIEW

According to Peter Druker (1986) he said that the aim of aim of marketing information system (MIS) is to know and understand the customer so well that the product or services rendered will be key to marketing decisions.  He further said that, many business firms lack information sophistication.  Many do not have a marketing research department where current and adequate marketing information will be given.  Peter Durker is with the view that emphasis should be given on the importance of monitoring the marketing environment to keep products and marketing practices current.  He said that management can not change customer wants, new competitor initiatives, changing distribution channels and so on, except they develop and manage information.

 Kotler (1997) said that there are three developments that make the need for marketing information greater than at any time in the past:

From local to national to global marketing: As companies expand their geographical market coverage, their managers need more information more quickly than ever before.

From buyer needs to buyer wants: As buyers income improve, they become more selective in their choice of goods.  To predict buyers response to different features, styles and other attributes, sellers must turn marketing research.

From price to non-price competition: As sellers increase their use of branding, product differentiation, advertising and sales promotion, they require information on these marketing tools effectiveness.

Kotler, further explained that the explosion of information requirements has been met by impressive new information technologies.  The past 30 years have witnessed the emergence of the computer, micro-filming, cable television, copy machines, fax machines, tape recorders, video recorders, video is players, CD-Rom drives, multi-media packages and other devices that have revolutionized information handling.

 Some firms have develop advanced marketing information systems that provide company management with rapid and incredible information about buyer wants preferences and behaviour.

 In today’s information-based society, development of good information can provide a company with a jump on its competitions.  Once it has surveyed the market and obtained the information it requires, the company can carefully evaluate its opportunities and choose its target markets to maximize profit.

 Madrick (1988) viewed that managers have always had some form of marketing information system to guide their decision – making.  In the past it was very informal.  Some managers simply walked among their staff asking questions.  Today the personal collection of data is not only impossible but unnecessary.  It is impossible because of the great amount of data that must be gathered, and it is unnecessary, because computers are now able to do much of this work.  He went further to say that most modern marketing information systems are computer based,.  The computerization of information needed for marketing started in the late 1950s at companies such as Pillsbury, Dupont and General Mills.  Today, according to Madrick, 98% of firms with sales over and 50 million use some form of computerized marketing information system.  Smaller companies and non-profit organisations have been slower to adopt such systems because of the expenses.  But with the continued lowering of data processing costs, use of computerized marketing information system (MIS) is expected to spread in the future.

 Shaw and Stone (1987), they said that marketing information system provides a more interactive approach to marketing communications uses individually addressable media (e.g. the sales force) to extend help to a company’s target audiences, stimulate their demand and stay close to them by keeping an electronic database memory of both actual and prospective customers and all communications and contacts to help improve all further contacts.  They suggest that marketing information system is essentially a customer-oriented approach to information handling and its advantage is in the techniques it uses to apply computer/communications technology.  In practice, MIS provides a store of historical customer data.  This produces better efficiency internally due to better organised data, thus ultimately leading to more effective strategic improvements.  They said that to achieve efficiency, it requires a study of an organisation’s current information base and its ability to monitor existing marketing activities.  It also need the ability to use information to match the dynamics of a changing market and to report such changes to marketing management in order that appropriate planning action can be taken.

 Lancaster and Massinghan (1993), have said that an organisation’s strategy, planning and operational control will only be as good as the information that is available to the decision maker.  They viewed marketing information system as a medium through which information is collected, channelled, focused and communicated.  They concluded by saying that, marketing information system requirement depend upon a number of factors: The type of industry or environment, the size of the organisation, the marketing decisions to be taken and the dynamics of the industry or environment.

 According to Beri (1993), that a good marketing information system should determine the information needs of the organisation and generate and process such information on continuing bases storage so that it can be used when required.  He said that an effective marketing information system have the following components;

Internal Accounting System.

Marketing Intelligence System.

Marketing Research System.

Marketing Management Science System.

The Internal Accounting System maintains data pertaining to orders, sales, inventory levels receivables and payables.  It should be able to fulfil the needs of marketing executive, sales representatives, production managers etc.  The marketing intelligence system collects current information on development the macro-environment and task environment its purpose is to keep executive abreast of the changing environment so that they can plan the marketing strategy to get optimum results.  Marketing research takes studies on specific marketing problems reports its finding to marketing management.  The marketing information system is management science or operations research.  It is concerned with building models for better understanding and the prediction and control of marketing processes.

 According to Rapp (1987), organisations face changes and challenges from outside as face changes and challenges from outside as well as inside their boundaries.  The role of marketing is to anticipate and identify such changes and advise the organisation on how to respond to challenges in the context of a competitive market place.  Marketing needs information to carry out this task. Rapp, went further to say that, marketing research collect information and marketing information system analysis and acts on such information.  He said that, the ability of a company to use the vast potential of today’s computer and telecommunication technology in driving customer – orientated programmes in a personalized, articulated and cost effective manner.

DEFINITION OF MARKETING INFORMATION SYSTEM

Marketing is happening all around us all the time, but many people are confused about what marketing is.  Marketing is as old as mankind, because it deals directly with food, shelter and clothing.

 Marketing could be defined as anything that deals with trying to plan things in relation to people’s needs, desire and preference through the provision of utilities in form of satisfaction.  Marketing has many definitions of which one of them, according to the United Kingdom institutes of marketing defines marketing as, the management process responsible for customer’s requirement profitably.  Also, the American Marketing Association formally defined marketing as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organisational objectives.

 Therefore, Marketing Information System (MIS) is the structure of people, equipment, and procedure to gather, sort, analyse, evaluate and distribute too needed, timely and accurate information to marketing decision makers.  According to Druker “The aim of MIS is to know and understand the customer so well that the product or services rendered will be key to marketing decisions.

 In the 1970s, the biggest change in MIS was the burgeoning interest in personal computers; the potential of these machines however, is widely recognised.  The personal computer is being used in combination with new kinds of software and improved graphics to a decentralised MIS network that vastly increases the quantity and quality of information available to marketing managers. In the future, the technology in MIS will undoubtedly be improved, that is, when product is being developed, producing a good done automatically through the help of buttons.

 In the mid 1980s, companies began up information centres where managers can get assistance in locating the facts they need and the tools for analysing quickly and easily.  Instead of filling data requested with a team of programmers, managers can go to the centre and retrieve and analyse information themselves.  Thus, this new concept is improving management and use of information by marketers.

OBJECTIVES OF MARKETING INFORMATION SYSTEM

The objectives of the MIS have been considered as of utmost importance and this is why it will have to be discusses here in detail.

 To gather information pertaining to the market where the product is being sold will give the marketing manager the opportunity to know the reaction of the consumer of the product, whether to add more of the quality and quantity of the product or to make more research to reduce some of the raw-materials used in the product which makes it to be defective.  It will also aid the productivity of the organisation through bringing the good into the awareness of the public to increase the rate of turnover.