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What is Marketing Information System (MKIS)?
A marketing information system (MKIS) is a structured system of information that aims in providing various marketing-related resources and information to marketing managers for successful marketing operations. It continuously interacts with people, and procedures – gathers, sorts analyzes and distributes timely and accurate information to the marketing managers to improve marketing decision-making activities.
The marketing information system collects the information from both internal and external to the business intending to provide information and capabilities that are needed by executives who must make the right decisions on a broad range of marketing topics.
MKIS provides the most relevant information about the present market that aids in the proper development of the production system, proper pricing, attractive packaging, influencing promotion, and right place distribution. It also provides information related to sales results, competitive activities, inventory management, sales force performance, forecast of economic conditions, changing customers’ attitudes, and so on.
Now, most businesses are involved in the use of computerized information systems. As a system, the marketing information system also gives a simple mechanism of data collection, process, and giving required results. MKIS collects input from the marketing environment such as market condition, channel, competition, economic, political, legal, natural, socio-cultural, etc. Processes the collected sources by analyzing, sorting, interpreting, retrieving, and organizing. And provides the information that is useful for market decision-makers in terms of planning, organizing, supervising, implementing, and controlling marketing performance.
Simply, MKIS works as a tool for making marketing decisions. It helps to enhance the effective and efficient performance of the marketing firm. It provides related and updated marketing information to the decision-makers who use them to eliminate or reduce risks while making decisions.
The basics features and requirements of a marketing information system are:
- The MKIS is a carefully developed master plan for information flow.
- There must be coordination among many departments and individuals, including top management, marketing research, personnel, finance, system analysts, programmers, and computer experts.
- Advancements in computer technology, data copying, storage, retrieval, etc. have been instrumental in the growth of sophisticated MKIS.
- Assessment of information needed for business organization.
- Development of required information.
- Analysis of developed information.
- Distribution of information as per the requirements.
Relevance
The today’s market one most known fact is that there is a growing expansion of competitiveness. This makes the utility of information immense for all kinds of businesses. At present, the relevance of the marketing information system is great. MKIS is now considered a must for every business firm. Some of the importance that showcases the relevancy of MKIS in modern-day marketing are as follows:
Supports Decision Making. The marketing information system supports quality decision-making by the marketers. The decision to be efficient must be the availability of options so that the best option could be selected. For the successful operation of the business, the marketer needs to make the correct and relevant decision. The decision should be responsive to the current market. The MKIS is dedicated to avail relevant and reliable information that supports the quality decision of the firm.
Supports Planning. Planning is an act that is the predetermination of future activities. For efficient planning the information is vital. Proper information is the best recipe for every business firm to make proper planning. The marketing business needs information for the proper operation of production, pricing, promotion, and distribution. Such planning makes successful MKIS by providing relevant information to the firm.
Implementation and Control. Any made decision and planning is nothing unless it is implemented. A random implementation may or may not be successful. The implementation should be done based on plans and decisions and analyzed information. The MKIS provides quick and relevant information about the surrounding environment and analyzes them to make it possible to use. And, helps to take corrective actions when the implementation has any default.
Environmental Adaptation. Today the success of every business firm depends on the ability to adjust to the changing factors of the environment. One of the objectives of a marketing information system is to make businesses ready to tackle changes and make the most of them. MKIS provides useful information related to business internal matters and the external environment which make the business informed about the various trends of the environment.
Components of Marketing Information System
The four main components of the marketing information system: are internal records, marketing intelligence system, marketing research, and marketing decision support system.
Internal Records
The first component of MKIS is internal records. The internal records system is aimed at providing business firm’s internal matters, weaknesses, and strengths, and suggests some ways to improve it if any defaults.
The business can collect information through internal records comprising sales records, purchase orders, customer databases, inventory level, cash flows, financial data, amounts of receivable, payable, billing, operations data, etc. Orders of goods and services from customers, suppliers, and distributors.
The collected internal information is the basis for future forecasting. Internal records help managers to get access to reliable information about the firm. This helps him with proper planning for sales, inventory location, finance allocation, profits & loss, and others which aids the improvement of the internal efficiency of the firm.
Marketing Intelligence System
The second element of MKIS is the marketing intelligence system. Marketing intelligence provides information to the external business firm. It provides various external information such as current trends of the market, changing trends of the market, changing & existing tastes and preferences of customers, competitors’ strategies, various marketing strategies employed by the businesses, and so on.
Like a SWOT analysis, the marketing intelligence system also makes aware to the firm about potential opportunities and threats. When it sees upcoming opportunities, argues business to take initiative, and when it sees upcoming adverse trends it prepares the firm to adjust to those trends.
It mainly aims to proving information to the firm about currently what is happening in the external environment. The information can be collected through newspapers, magazines, published articles, books, etc. Furthermore, it can be collected through Annual Reports of the Trade Association and Chambers of Commerce, Annual Report of Companies, etc.
The information collected through the external environment, the marketing manager can not directly implement. It needs to be evaluated and analyzed and then used to make marketing-related decisions.
Marketing Research System
The third component of MKIS is marketing research. Marketing research is the scientific process to gather, analyze and distribute marketing information to support marketing problems.
In MKIS, marketing research is done to solve specific problems. It only collects the data about the problems. Simply defining, marketing research gathers the data that are related to a specific problem and helps to find out solutions.
For example, when a business is going through a very fewer amount of sales. It may conduct marketing research to understand what factors are causing fewer sales. I think it may be low quality, inferior to competitors, no promotion, environment change, change in customers consumption pattern, etc. And, after understanding the relevant causing factors the business may take further remedial actions.
The information is collected, tabulated, and analyzed to conclude. The drawn conclusions are provided for making various marketing decisons for managers. Such information gives firms to be informed about environmental change, support problems and decisons making, forecast data, and understand the patterns of customers.
Marketing Decision Support System
The last component of MKIS is a decision support system. Marketing decision support systems may use different tools, programs, and software to collect, analyze, and draw conclusions to make timely and rational decisions.
The ultimate goal of a marketing information system is to provide relevant, timely, and accurate information to support to make rational decisions of the marketer. Where it tells marketers the truth about the internal and external matters of the business firms to support quality decisions.
Today, the use of computers in every business by every manager is almost compulsory. So the marketer can use different hardware, software, mathematical tools, statistical tools, and various decision models to support the quality decisions such as pricing decisions, redesigning organizational structure, procedures, policies, marketing strategies, and so on.