What is Marketing Information System and Its Components?
Meaning of Marketing Information System
A Marketing Information System (MIS) is a collection of tools and a process for using and managing information. An MIS can help a company’s marketing department plan, control, and measure marketing and sales activities.
Marketing information systems (MIS) are critical tools businesses use to track, measure and analyze their marketing activities. MIS provides valuable insights into how customers interact with your product or service, identifies market opportunities, creates market charts and graphs, and tracks customer relationships. MIS can also help you develop effective marketing plans.
Additionally, an MIS provides tools for understanding the data it collects. Additionally, Kotler defines an MIS as more than a data collection system or a collection of information technologies.
“A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control”.
An MIS commences with a breakdown of its four primary components: internal reporting systems, marketing research systems, marketing intelligence systems, and marketing models.
An MIS system is an integrated business tool containing marketing-specific information and analysis to make marketing decisions. A good MIS should enable the entire marketing department to access all marketing information, regardless of what department generated it.
How Marketing Information System is created?
Marketing Information System is basically an organized collection of the information generated by the marketing department of a company. It is the process of generating all the necessary information required by the marketing department so that they can have a better understanding of the market and business.
It is not just the gathering of information but it is also in the process of organizing the information and creating it into a tool to support the future activities of the marketing department.
Marketing Information System involves the collection of customer details, customer preferences, data related to the company products or services and also provides information on the number of customers or prospects who are active and who have not been reached or communicated with. A marketing information system also provides information on the products and services sold. This information helps in assessing the performance of the department and the organization as a whole.
The marketing information system provides the required reports and analysis for the marketing department to make decisions and develop strategies for future growth. The marketing information system gathers all the data and details needed to understand the target market and also make a strategy to reach out to the target market.
Components of Marketing Information System
There are four components of a Marketing Information System (MIS) as mentioned below:
- Internal Records,
- Marketing Intelligence,
- Marketing Research (MR), and
- Marketing Decision Support System.
Now let’s discuss them in detail:
The ‘Internal Record’ is the initial component of MIS. Marketing managers obtain a wealth of information from the company’s internal records. These records keep track of current sales, expenses, inventory, cash flows, and accounts receivable and payable.
Numerous businesses retain electronic internal records. Internal records enable marketing managers to obtain trustworthy information more quickly.
All businesses with a long history have a ton of information. It is typically underused because it is compartmentalised, either by an individual entrepreneur or by bigger company units. That is, information is frequently classified by kinds, such as financial, production, personnel, marketing, stockholding, and logistical data.
Often, the entrepreneur or employees in the functional units holding the data do not recognise how it may benefit other decision-makers. Similarly, decision-makers may overlook the value of information from other functional areas and neglect to seek it.
Marketing research is a proactive search for information. That is, the firm that commissions these studies does so to solve a perceived marketing problem. In many circumstances, data is gathered in a planned fashion to address a well-defined problem (or a problem that may be identified and solved within the course of the research) (or a problem that can be defined and solved within the course of the study). The third sort of marketing research is not around a specific marketing problem but rather an endeavour to continuously analyse the marketing environment.
These monitoring or tracking operations are ongoing marketing research studies, generally including panels of farmers, customers or distributors from whom the same data is collected at regular intervals. Whilst the ad hoc study and ongoing marketing research vary in orientation. However, they are both proactive.
Marketing Decision Support System
‘Marketing Decision Support System’ is the fourth component of MIS. These are the tools that allow the marketing managers to examine data and to make better marketing decisions. They include hardware, i.e. computer and software applications. The computer assists the marketing manager in examining the marketing information.
It also allows them to make better judgments. In reality, modern marketing managers cannot operate without computers. Several software packages assist the marketing manager in conducting market segmentation, pricing fixing, advertising budgeting, etc.