UNIT 2

MARKETING INFORMATION SYSTEM

The Marketing Information System refers to the systematic
collection, analysis, interpretation, storage and
dissemination of the market information, from both the
internal and external sources, to the marketers on a regular,
continuous basis.

The marketing information system distributes the relevant

information to the marketers who can make the efficient
decisions related to the marketing operations viz. Pricing,
packaging, new product development, distribution, media,
promotion, etc.

Components of Marketing Information System

1. Internal Records: The Company can collect information
through its internal records comprising of sales data,
customer database, product database, financial data,
operations data, etc. The detailed explanation of the
internal sources of data is given below:
• The information can be collected from the documents
such as invoices, transmit copies, billing documents
prepared by the firms once they receive the order for
the goods and services from the customers, dealers or
the sales representatives.
• The current sales data should be maintained on a
regular basis that serves as an aide to a the Marketing
Information System. The reports on current sales and
the inventory levels help the management to decide on
its objectives, and the marketers can make use of this
information to design their future sales strategy.
• The Companies maintain several databases such as
*Customer Database- wherein the complete
information about the customer’s name, address,
phone number, the frequency of purchase, financial
position, etc. is saved.
*Product Database- wherein the complete information
about the product’s price, features, variants, is stored.
 *Salesperson database, wherein the complete information
about the salesperson, his name, address, phone number,
sales target, etc. is saved.

• The companies store their data in the data warehouse from

where the data can be retrieved anytime the need arises.
Once the data is stored, the statistical experts mine it by
applying several computer software and techniques to
convert it into meaningful information that gives facts and
figures.
2. Marketing Intelligence System: The marketing
intelligence system provides the data about the happenings
in the market, i.e. data related to the marketing
environment which is external to the organization. It
includes the information about the changing market trends,
competitor’s pricing strategy, change in the customer’s
tastes and preferences, new products launched in the
market, promotion strategy of the competitor, etc.
In order to have an efficient marketing Information
System, the companies should work aggressively to
improve the marketing intelligence system by taking the
following steps:

• Providing the proper training and motivating the sales force

to keep a check on the market trends, i.e. the change in the
tastes and preferences of customers and give suggestions
on the improvements, if any.
• Motivating the channel partners viz. Dealer, distributors,
retailers who are in the actual market to provide the
relevant and necessary information about the customers
and the competitors.
• The companies can also improve their marketing
intelligence system by getting more and more information
about the competitors. This can be done either by
purchasing the competitor’s product, attending the trade
shows, reading the competitor’s published articles in
magazines, journals, financial reports.
• The companies can have an efficient marketing
information system by involving the loyal customers in the
customer advisory panel who can share their experiences
and give advice to the new potential customers.
• The companies can make use of the government data to
improve its marketing Information system. The data can be
related to the population trends, demographic
characteristics, agricultural production, etc. that help an
organization to plan its marketing operations accordingly.
• Also, the companies can purchase the information about
the marketing environment from the research companies
who carry out the researches on all the players in the
market.
• The Marketing Intelligence system can be further
improved by asking the customers directly about their
experience with the product or service via feedback forms
that can be filled online.
3. Marketing Research: The Marketing Research is the
systematic collection, organization, analysis and
interpretation of the primary or the secondary data to find
out the solutions to the marketing problems.Several
Companies conduct marketing research to analyze the
marketing environment comprising of changes in the
customer’s tastes and preferences, competitor’s strategies,
the scope of new product launch, etc. by applying several
statistical tools. In order to conduct the market research,
the data is to be collected that can be either primary data
(the first-hand data) or the secondary data (second-hand
data, available in books, magazines, research reports,
journals, etc.)
The secondary data are publicly available, but the primary
data is to be collected by the researcher through certain
methods such as questionnaires, personal interviews,
surveys, seminars, etc.

A marketing research contributes a lot in the marketing

information system as it provides the factual data that has
been tested several times by the researchers.

4. Marketing Decision Support System: It includes several

software programs that can be used by the marketers to
analyze the data, collected so far, to take better marketing
decisions.With the use of computers, the marking
managers can save the huge data in a tabular form and can
apply statistical programs to analyze the data and make the
decisions in line with the findings.
Thus, the marketers need to keep a check on the marketing
environment, i.e. both the internal (within the organization)
and the external (outside the organization, so that
marketing policies, procedures, strategies can be designed
accordingly.

Importance of MkIS
The main benefit of MkIS systems is to integrate market-
monitoring systems with strategy development and the
strategic implementation of policies and processes that
help capture and act on customer management applications
with marketing decision support systems. This area
constitute Marketing intelligence that supports the analysis
and market based activities that support customer relations
and customer service with real time information with real
time applications that support market based approaches.
1) Organized Data collection – Lots of data can be
collected from the market. But the main word here is
“Organized”. Organizing data is very important else the
data is meaningless. Thus MIS helps you to organize your
database thereby improving productivity.

2) A broad perspective – With a proper MIS in place, the

complete organization can be tracked which can be used to
analyse independent processes. This helps in establishing a
broader perspective which helps us know which steps can
be taken to facilitate improvement.

3) 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. Similarly in Media, photographs are stored in
archives. This storage of important data plays a crucial role
in execution and thus proves again that MIS is not
important only for information but also for execution.

4) Avoidance of Crisis – The best way to analyse a stock

(share market) is to see its past performance. Top websites
like moneycontrol thrive on MIS. Similarly MIS helps you
keep tracks of margins and profits. With an amazing
information system established, you can know where your
organization is moving and probably avert a crisis long
before it has taken place. Ignoring hints received from MIS
reports is foolhardy.

5. Tapping of business Opportunities: -There are number

of business opportunities which have remained untapped
for various reasons are due to unavailability of sufficient
information. MIS makes it possible to tap business
opportunities as it can supply required and reliable data.
 5) Co-ordination – Consumer durables and FMCG
companies have huge number of processes which needs to
be co-ordinated. These companies depend completely on
MIS for the proper running of the organization. There are
dedicated people for marketing information systems in
such organizations. This is mainly because of the speed
required to access information and implement it.

7. Help managers to Recognize Change: -a business firm

may be handling or marketing a wrong line of products. As
such the company will not be able to make profits. And if
it is does, profits may not be adequate. A firm which is well
equipped with MIS will be able to realize the need to
change the line of business.

8. Integration of Information: -firms, which are largely

decentralized can gather information which is scattered at
many centers or departments and integrate it for effective
decision making. Such integration is possible if there is a
centralized MIS.

7) 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. In a proper MIS, all these are present
by default and are continuously updated. Thus MIS is very
important for planning and analysis.

8) 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.

Disadvantages –

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.

International Marketing Research

• International marketing managers need to constantly
monitor the different forces affecting their
international operations
• International marketing research is especially complex
• International marketing research is the systematic
design, collection, recording, analysis, interpretation,
and reporting of information pertinent to a particular
marketing decision facing a company operating
internationally.
➢ International Buyer Behavior Research
• Brand preferences
• Brand attitudes
• Brands awareness studies
• Purchase behavior studies
• Consumer segmentation studies
➢ International Product Research
• Concept development
and testing studies
• Brand name generation
and testing
• Product testing
• Competitive product studies
• Packaging design studies
• Test marketing
➢ International Distribution Research
• Import/export analyses
• Channel performance and coverage
• Plant/warehouse location studies
 ➢ International Promotion Research
• Studies of premiums, coupons, and deals
• Advertising effectiveness research
• Local media research
• Studies pertaining to personal selling activities
▪ Sales Force Compensation
▪ Quota
▪ Territory
➢ International Pricing Research
• Studies projecting demand
• Currency and counter trade studies
• Studies of inflation rates and pricing
• Studies of negotiation tactics

International Marketing Research Process

• STEP 1 Define the international research problem and
agree on the research objectives
• STEP 2 Set specific objectives
• STEP 3 Develop the International Research Plan
 • STEP 4 Define Information Sources
• STEP 5 Design Data Collection Instrument
• STEP 6 Decide on the Sampling Plan
• STEP 7 Collect, Analyze, and Interpret Data

GLOBAL MARKET SEGMENTATION

Market segmentation is a marketing strategy which
involves separating a wide target market into subsets of
customers, enterprises, or nations who have, or are
perceived to have, common requirements, choices, and
priorities, and then designing and executing approaches to
target them.
Market segmentation approaches are basically used to
identify the target clients, and provide assisting data for
marketing plan components like positioning to get certain
marketing plan objectives.
Businesses may discover product differentiation
approaches, or an undifferentiated approach, including
specific goods or product lines relying on the precise
demand and attributes of the target segment.

Global market segmentation can be defined as the process

of identifying specific segment country group or
individual consumer group across the country or group of
potential customers group with homogeneous attributes
who are likely to exhibit similar buying behavior.

The most common forms of market segmentation practices

are as follows −
Geographic Segmentation
Dealers can segment market according to geographic
criterion that is nations, states, regions, countries, cities,
neighborhoods, or postal codes. The geo-cluster strategy
blends demographic information with geographic data to
discover a more precise or specific profile. For example,
in rainy areas dealers can easily sell raincoats, umbrellas
and gumboots. In winter regions, one can sell warm
clothing.
A small business product store focuses on customers from
the local neighborhood, while a larger departmental store
focuses its marketing towards different localities in a
larger city or region. They neglect customers in other
continents. This segmentation is very essential and is
marked as the initial step to international marketing,
followed by demographic and psychographic
segmentation.
Demographic Segmentation
Segmentation on the basis of demography relies on
variables like age, gender, occupation and education level
or according to perceived advantages which an item or
service may provide.
An alternative of this strategy is called firmographic or
character based segmentation. This segmentation is widely
used in business to business market. It’s estimated that
81% of business to business dealers use this segmentation.
According to firmographic or character based
segmentation, the target market is segmented based on
characteristics like size of the firm in terms of revenue or
number of employees, sector of business or location like
place, country and region.
Behavioral Segmentation
This divides the market into groups based on their
knowledge, attitudes, uses and responses to the product.
Many merchants assume that behavior variables are the
best beginning point for building market segments.
Psychographic Segmentation
Psychographic segmentation calls for the division of
market into segments based upon different personality
traits, values, attitudes, interests, and lifestyles of
consumers.
Psychographics uses people’s lifestyle, their activities,
interests as well as opinions to define a market segment.
Mass media has a dominating impact and effect on
psychographic segmentation. To the products promoted
through mass media can be high engagement items or an
item of high-end luxury and thus, influences purchase
decisions.
Occasional Segmentation
Occasion segmentation is dividing the market into
segments on the basis of the different occasions when the
buyers plan to buy the product or actually buy the product
or use the product. Some products are specifically meant
for a particular time or day or event. Thus, occasion
segmentation helps identify the customers’ various
reasons to buy a particular product for a particular and thus
boosts the sale of the product.
Advantages or Benefits of Market Segmentation
1. Proper choice of target market: The market for any
product is made up of several segments. A market is the
aggregate of consumers of a given product. Consumers are
not a homogeneous lot. They differ a lot in their characters
and buying behavior. Thus, many differing segments exist
in a market. Market segmentation helps the marketer divide
the heterogeneous market. It is possible to distinguish one
customer group from another.
2. Tapping a particular market: Segmentation enables
the marketer to understand the needs of the customers and
serve them well. Prediction of the likely response from
each segment is possible. With homogeneous responses
from each segment, marketer finds it easy to develop an
appropriate marketing programme. By tailoring the
marketing programmes to individual market segments,
marketers perform their tasks effectively.
Specialization can be achieved in product distribution,
promotion and pricing for catering to a particular segment.
3. Efficient and economic marketing efforts:
Segmentation makes marketing efforts both efficient and
economic. Marketers segment the market and try to fulfill
the needs of that segment. It helps in designing the kinds of
promotional devices that are effective from the view point
of customers.
Marketing efforts are focused on the well defined needs of
the segment. Thus, marketing efforts undertaken by the
marketer become more productive. They help the marketer
to evaluate the results of his marketing programme. Best
time to introduce new products, advertising etc., could be
easily determined.
4. Benefits to the customer: Segmentation benefits not
only the marketer but the customer as well. It distinguishes
one customer group from another within a given market. It
helps the marketer concentrate on the fulfillment of the
well defined needs of the specific segment. Now-a-days,
segmentation has attained a high degree of sophistication.
Though market segmentation offers a lot of advantages, it
has some limitations with respect to cost and market
coverage.
Disadvantages or Limitations of Market Segmentation
1. Sometimes, market segmentation becomes an expensive
proposition. A marketer experiences considerable
difficulties, as he has to develop different marketing
mixes for different segments. Moreover, mass production
is much cheaper than making a variety of products.
Even major players like Bata have erred in market
segmentation. In the early 1990s, Bata introduced a few
brands with high price tags in the high end segment of the
Indian footwear market. This segment was not a sizable
one for Bata. This segment accounted for a mere 5 — 10
percent of the Indian footwear market. The sales trend
could not facilitate mass production. Having incurred a loss
in the high end segment, Bata had returned to the mass
segment.
2. Promotional expenses, costs of keeping adequate
inventory of each variety of goods etc., also go up, eroding
profitability.
3. Since the marketer has to implement varying marketing
programmes suiting to the different segments,
administrative expenses increase.

Target market
• A specific group of consumers at which a company aims its
products and services.
• Your target consumers are those who are most likely to buy
from.
• Focusing on a target market makes it easier to develop
products people want.
Why is determining a Target Market Important ?
• The better a company is at identifying their potential
consumers; the more successful they will be in delivering
products and services that are in demand.
How do you determine who your target market is?
There are some question to be asked:
• Is your product international, national or local in scope?
• Are your target consumers male or female?
• Where do they live?
• What activity they perform : sports, physical fitness,
shopping ?
• Target consumers level of education?

Does your product meet your consumer, need?

• No single product can meet everyone’s need
• Not all products and service are meant for all type of
consumers

Does your product meet your consumer, need?

• The beauty of target marketing is that it makes the
promotion, pricing and distribution of your products and/or
services easier and more cost-effective