Marketing Information System

and Marketing Research

To carry out the responsibilities of marketing
management, planning , implementation and
control , marketing officers need a great deal of
information.

Too often, however, such information is not
available, comes too late or cannot be trusted.

To overcome these deficiencies companies should
improve their marketing information system.

A well designed marketing information system
should include the following four subsystems:
-Internal Reports System
-Marketing Intelligence System
-Marketing Research System
- Statistical analytical models/methods System .
(1) INTERNAL REPORT SYSTEM
Every company should produce periodic internal
reports which provide management with:
-Current data on sales
-Costs
-Inventories
-Cash flows
-accounts receivables and payable
In too many companies, these reports often
come too late to satisfy marketing management.

(2) MARKETING INTELLIGENCE SYSTEM
Lack of knowledge of the external environment
is the first barrier to be overcome in marketing.

Whereas the internal reports system supplies
executives with results data,
the marketing intelligence system supplies
executives with everyday information about
development in the external marketing
environment.

WHAT INFORMATION?
The researcher does not need all the facts or
information about the domestic and international
markets.

To economise on research funds and to facilitate
storage and retrieval of data, the researcher wants
only relevant information that is necessary to
marketing decision-making.

Marketing intelligence includes environmental
information such as:
-Cultural information
-political information
-legal and
-macro-economic information
The smaller firm will have information needs
similar to those of the large firm.

It will however be less able to conduct the same
kind of market intelligence.

The firm that is small must rely on others for its
marketing intelligence information needs, e.g.
-its distributors
-its sales people
-licensees or joint-venture partners.

The purpose of this intelligence operation is the
gathering of whatever information is necessary to
make sound marketing decisions.

Richard Holton, using game theory language,
suggests three questions that marketing intelligence
should consider:

(i) Who are the players?
(i.e. Who are the competitors, customers,
suppliers, government officials, and others who
can affect our operations?)
(ii) What strategic alternatives or actions is each
player likely to consider
(iii) What are the probabilities attached to each
strategic alternatives.

Source: Richard H Holton (1979) Marketing Policies in
Multinational Corporation, Journal of International
Business Studies, Summer pp.1-20.


(3) MARKETING RESEARCH SYSTEM

What is marketing research?



Marketing research can be defined as:

the systematic and objective process of
gathering, recording and analyzing data for aid
in making marketing and business decisions.

The definition indicates that:
1. Research information is not intuitive or
haphazardly gathered.
The emphasis of marketing research is to shift
decision makers from intuitive information
gathering to a systematic and objective
investigation.

2. If the information or data gathered,
recorded and analysed is to be accurate, the
marketing researcher must be objective.

Why?
If bias enters into the research process, then
its value is considerably reduced.

3. The objective of marketing research is to
facilitate managerial decision process for all
aspects of a business.

By providing the necessary information
upon which to base decisions, research can
reduce the uncertainty of a decision and
thereby reduce the risk of making the wrong
decision
Information
Reduces
Uncertainty
I dont know
if we
should offer
New products?


"The secret of success is to know something
nobody else knows. "
Aristotle Onassis

Marketing Research can help management to:
-Identify consumer needs
-Develop new products
-Develop communication strategies
-Evaluate the effectiveness of marketing programs
and promotion activities

Marketing research can be used to collect
appropriate information to be used for the
three Rs of marketing:
-Recruiting new customers
-Retaining current customers
-Regaining lost customers


CLASSIFICATION OF MARKETING
RESEARCH
(1) Marketing research can be classified
according to the area to be investigated. eg.
Consumer behaviour research
Promotion and Advertising
Market segmentation research
Product development research
Test marketing research
Sales research, Pricing research
Performance research (e.g. measurement of
market potential, market share, sales
analysis

(2) Market research can also be classified
according to the technical means of data
analysis.
quantitative research (This involves using
quantitative methods of measurement and
statistical techniques)
- qualitative research (This involves (using
subjective methods of measurement)
(3) Marketing research can also be classified
according to the methods of data
collection
Secondary research (sometimes referred to
as desk research]
Survey research
Experimental research
In general, classifying research on the basis
of the purpose or function of the search
allows us to understand how the nature of
the marketing and business problem
influences the choice of research methods.
The nature of the problem will determine
whether the research is:
-Exploratory research
-Descriptive research or
-Causal research
Exploratory studies are conducted to clarify
the nature of the problems.
For example, a fast-food hamburger chain
might be considering expanding their
product line with soup and salad
Exploratory research with a small number of
customers might find that consumers had a
negative reaction to certain aspects of
serving soup and salad at a fast-food outlet
Descriptive research: The major purpose
of descriptive research, as the name implies,
deals with describing characteristics of
population.
Descriptive research seeks to determine the
answers to who, what, when,
where and how.

A goal of descriptive research is accuracy.
Causal Research: The main goal of causal
research is to identify the cause-and-effect
relationship between variables.

[Note: a variable is anything that may assume
different numerical values.
In statistical analysis, a variable is identified by a
symbol such as x.

The variable sex, may be categorised as:
male or female

Causal research attempts to establish that when we
do one thing, another thing will follow.
For example, attitudes towards insurance companies may be
a variable, as peoples attitudes may vary from positive to
negative.

In causal research, the terms dependent variable and
independent variable are frequently encountered.

Dependent variable is viewed as being potentially
influenced, affected or determined by some other variable
in a cause-and-effect relationship.
How to determine when to
conduct Marketing Research
Time constraints
Availability of data
Nature of the decision
Benefits versus costs
Is sufficient time
available before
a managerial
decision
must be made?
Is the infor-
mation already
on hand
inadequate
for making
the decision?
Is the decision
of considerable
strategic
or tactical
importance?
Does the value
of the research
information
exceed the cost
of conducting
research?
Conducting
Business
Research
Do Not Conduct Marketing Research
Time Constraints
Availability of Data
Nature of the Decision
Benefits
vs. Costs
Yes Yes Yes Yes
No No No No
Determining When to Conduct
Marketing Research
NOTE: This lecture is based on your text
book and on W. G. Zikmund , Exploring
Marketing Research.