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Business LibreTexts

10.1: Marketing Information Systems

  • Page ID
    5019
  • Learning Objectives

    1. Describe the components of a marketing information system and each component’s purpose.
    2. Explain the situations in which marketing research should be used versus market intelligence.
    3. Describe the limitations of market intelligence and its ethical boundaries.
    4. Explain when marketing research should and should not be used.

    A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that’s being gathered. When a sales representative records the shipping preferences of a customer in a firm’s customer relationship management (CRM) system, this is also marketing information that’s being collected. When a firm gets a customer complaint and records it, this too is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

    Audio Clip

    Interview with Joy Mead

    http://app.wistia.com/embed/medias/c89771530a

    Recall from Chapter 3 “Consumer Behavior: How People Make Buying Decisions” that Joy Mead is an associate director of marketing with Procter & Gamble. Listen to this clip to hear Mead talk about the research techniques and methods Procter & Gamble uses to develop consumer insight. You will learn that the company isn’t just interested in what consumers want now but also years in the future.

    The trick is integrating all the information you collect so it can be used by as many people as possible in your organization to make good decisions. Unfortunately, in many organizations, information isn’t shared very well among departments. Even within departments, it can be a problem. For example, one group in a marketing department might research a problem related to a brand, uncover certain findings that would be useful to other brand managers, but never communicate them.

    A marketing information system (MIS) is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to very sophisticated computer systems. Ideally, however, 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

    Internally Generated Data and Reports

    As we explained, 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 by virtue of their browsing patterns. Software can be used to automatically tally 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 (Baker, 2009). (That’s an interesting way to conduct marketing research, don’t you think?)

    Being able to access clickstream data and other internally generated information quickly can give a company’s decision makers a competitive edge. Remember our discussion in Chapter 9 “Using Supply Chains to Create Value for Customers” about how Walmart got a leg up on Target after 9/11? Walmart’s inventory information was updated by the minute (the retailer’s huge computing center rivals the Pentagon’s, incidentally); Target’s was only updated daily. When Walmart’s managers noticed American flags began selling rapidly immediately following the terrorist attacks on 9/11, the company quickly ordered as many flags as possible from various vendors—leaving none for Target.

    Click on the following link to watch a fascinating documentary about how Walmart, the world’s most powerful retailer, operates: http://www.hulu.com/watch/103756/cnb...ls-the-new-age -of-walmart.

    Many companies make a certain amount of internal data available to their employees, managers, vendors, and trusted partners via intranets. An intranet looks like the Web and operates like it, but only an organization’s employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on her firm’s intranet for the information.

    However, 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. The information could be right under your nose and you might not know it. Meet people like Gary Pool: Pool works for BNSF Railway and is one of BNSF’s “go-to” employees when it comes to gathering marketing data. Pool knows how to access different databases and write computer programs to extract the right information from the right places at BNSF, a process known as data mining. Combining data into one location is called data warehousing, and makes Pool’s analysis easier. He then captures the information and displays it 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.

    Figure 10.2

    10.1.0-1024x685.jpg

    Gary Pool is an expert at data mining—hunting up information for decision makers at BNSF Railway. And no, he doesn’t wear a headlamp. Nor does he wear a pocket protector! Pool’s title: Manager, Marketing Systems Support & Marketing Decision Support & Planning.

    Michael Kappel – Metra BNSF Railway 149 – CC BY-NC 2.0.