Marketing Information System: Meaning, Importance and Scope
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.
Marketing Information System (MIS) is a permanent arrangement (system or setup) for provision of regular availability of relevant, reliable, adequate, and timely information for making marketing decisions.
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.
Every marketing operation works in unison with the conditions prevailing both inside and outside the organization, and, therefore, there are several sources ( viz. Internal, Marketing Intelligence, Marketing Research) through which the relevant information about the market can be obtained.
Philip Kotler: “A marketing information system is a continuing and interacting system of people, equipment’s, and procedures to gather, sort, analyze, evaluate, and distribute the pertinent, timely, and accurate information for use by marketing decision-makers to improve their marketing planning, implementation, and control.” Philip Kotler gives alternative definition, such as: “A marketing information system (MIS) consists of people, equipment’s, and procedures to gather, sort, analyze, evaluate, and distribute the needed, timely, and accurate information to marketing decision makers.”
Importance of Marketing Information System
Marketing information system has become an essential part of the marketing decision making process. Importance of marketing information system can be described as follows:
- Closing Information Gap
Expansion of the geographical market coverage from local-to national-to international scale has made marketing information system vital for day to day operation of an organization. This expansion of the market coverage has widened the information gap between the organization and its market.
The information need of an organization that operates at the local market level is less than that of an organization that operates the national market level. The information need of exporters who operate at the international level is very high, because they operate very far from their market. Marketing information system provides information on the local, the national and the international markets.
- Want Creation and Delivery
Today, marketing goals have changed from understanding and satisfying buyer’s needs to want creation and delivery. It has posed a greater challenge for organization to more accurately understand the consumer’s desires located in the subconscious part of the mind.
Marketing has reached a new height where organizations strive to create, mold and modify new desires and want among the consumers. This requires the organization to undertake intensive consumer research activities targeted at probing deeply into the mind of consumers. The mind-probing exercise is conducted to understand the hidden and ungratified desires of consumer groups and stimulating these desires to take the shape of wants for products.
In the highly competitive world, success of an organization depends on creating wants and delivering products that specially satisfy the created wants. This new challenge has increased the role of marketing information system for an organization.
- Non-price Competition
Organizations, to-day believe that price competition leads to price cuts, which usually results in a loss not only to individual organizations but to the industry as a whole. Organizations prefer to compete over non-price factors, such as product differentiation, image, service and promotion.
Implementation of non-price competition requires a variety of information on consumers’ awareness and attitude towards the organization’s and competitors’ products, product positions in the market, the services offered by competitors, effectiveness of promotional tools etc. Such vital information is provided to the decision makers by the marketing information system.
- Environmental Monitoring and Scanning
Organizations need to constantly monitor the movements in the environmental forces, particularly the economic, competitive, technological and political environment of the market. Changes in any of the environmental forces bring challenges and new opportunities to the organization.
Environmental scanning process collects vital information on the development taking place in the environment and prepares the organization to face the threats and capitalize on the new opportunities. Environmental monitoring and scanning are integral parts of the marketing information system.
- Marketing Planning
Marketing planning involves a detailed planning of the marketing activities in relation to the needs of the target markets. In a competitive market, the success of and organization depends on adequate and accurate marketing planning. Planning requires variety of information on the market including demand estimates and sales forecasts, which are supplied by the marketing information system.
- Evaluation and Control
Regular evaluation and control of the marketing program are important activities of the marketing management process. the organization needs to know to what extent its program has been successful, to what level it has met the desired targets, in what forms modifications and corrections are necessary and so on. Such information is provided by the marketing information system through regular market monitoring and occasional market research activities.
Scope of Marketing Information System
- It helps marketing planning by making available correct information on the external environment and the internal company realities.
- The information if free from any bias towards the pre-conceived conclusion will have more value than otherwise.
- The information, if free from any error, will have more value than otherwise.
- The quality of marketing decisions are decided to a great extent by the quality of marketing information available to the decision maker.
- It facilitates the development of action programmes for achieving set goals.
- It helps the controlling of marketing activities.
- It helps effective tapping of marketing opportunities and effective defence against marketing threats.
- It helps the firm to adjust its product and services to the needs and taste of customers.
- It provides market intelligence to the firm.
- It helps rapid spotting of trends and facilitates the formulation of basic assumptions on economic and business conditions.