You search on Google for a t-shirt but don't seem to find the exact one you were looking for. After that, you go to Instagram, and t-shirt ads start popping everywhere. How is that possible, and how does it work? How do companies use marketing information systems to improve their marketing campaigns? What is the importance of using a marketing information system?
You'll find out the answers to these questions and much more in this explanation.
Marketing Information System Definition
A marketing information system is a tool that helps companies gather and analyze information about their customers, competitors, and market trends. It helps companies make informed decisions about their marketing strategies and products. It's like a detective, helping businesses solve the mystery of what their customers want and how to reach them.
A marketing information system (MIS) is a set of procedures and methods used to gather, analyze, and interpret information related to marketing decisions. It is a computer-based system that collects data from various sources, such as internal records, surveys, and external databases, and transforms it into actionable insights for marketing managers.
For example, let's say a company wants to launch a new product. They can use a marketing information system to gather data on customer needs and preferences, analyze competitor offerings, and evaluate market trends. With this information, they can develop a targeted marketing plan, including product positioning, pricing, and promotion.
Meticulous planning and extensive research are necessary for developing successful marketing strategies. It is vital to collect relevant information and data. However, it is also crucial to properly organise, evaluate, and communicate their results.
The primary emphasis of the input stage of a marketing information system is the collection of pertinent data, both internal and external, for analysis and interpretation.
The distribution of the results obtained from a marketing information system to all necessary members and management of an internal marketing team is the output of a marketing information system.
After analysing the data, marketers can make more informed marketing choices, ultimately benefiting the company's profitability.
A marketing information system may be helpful in a variety of different marketing choices, including the following categories of decisions:
Control choices: The choices about corrective measures that mid-level marketing managers make based on deviations from strategic plans that higher-level marketing managers execute.
Operational decisions: decisions on the day-to-day activities of marketing professionals, particularly those regarding the completion of specific tasks.
Strategic decisions: Refers to those decisions made at a high level by marketing managers and concern issues relevant to the whole business, such as policies, goals, and structures of the firm.
Sources of Marketing Information
There are many sources of marketing information, including:
- Internal data: Information that is generated within a company, such as sales data, customer data, and financial data.
- Market research: Systematically gathering, recording, and analysing data about a specific market or customer group.
- Social media: Online platforms like Twitter, Facebook, and Instagram, which can provide real-time insights into customer sentiment and behavior.
- Customer feedback: Comments, reviews, and complaints from customers, which can provide valuable insights into customer preferences and needs.
- Competitor analysis: Evaluation of competitor activities, including their products, marketing strategies, and customer engagement.
These are just a few examples of the sources of marketing information that companies can use to inform their marketing strategies and improve their business outcomes.
Marketing Information System Components
Marketing information systems enhance marketing efforts and impact decision-making by combining multiple data gathering, processing, analysis, and reporting capabilities. Marketing information system components include:
- internal reports
- marketing decision support systems (MKDSS)
- marketing intelligence
- marketing research
Internal Data
The information gathered within the firm is included in internal reports or records. This data may give you valuable insights, particularly about a company's skills, accomplishments, and potential for progress. The following are some examples of data that companies may include in internal reports:
Inventories,
Cash flows,
Expenses related to the marketing staff,
Product expenses that are payables,
Receivables.
Marketing Decision Support System
Marketing Information Systems Examples
As marketing information systems enable companies to significantly improve their offerings and the quality of their decisions, almost every company has a marketing information system. Examples of marketing information systems include royalty cards and customer profiles.
For instance, many retail establishments provide their customers with loyalty cards, and many companies give consumers the ability to create profiles in their online stores to track their purchases more easily.
Creating customer profiles and loyalty programmes can help organisations acquire data about their customers. They maintain a record of their purchasing patterns, including the total amount of money spent on purchases, their degree of involvement, the products they are drawn to, and so on.
Businesses can use this information to control their pricing strategy, develop more effective marketing campaigns, and devise relevant offers at the ideal location and appropriate time.
Online booking providers use similar procedures. They keep track of their customers' routines, preferences, and itineraries to gain insights and act on those findings.
For instance, airline and hotel reservation services maintain tabs on all the data described above to utilise it as a competitive advantage. They can keep track of demand and adjust rates accordingly as it changes. During the off-season, they can also provide loyalty discounts to their repeat customers.
Real-World Examples of Marketing Information Systems
Let's take a look at some real-world companies using marketing information systems.
Nike
Nike uses a marketing information system called NikePlus that tracks customer behavior across its website and mobile apps. The system collects data on customer preferences, purchase history, and fitness activity, and uses this information to create personalized marketing campaigns and product recommendations. NikePlus also enables Nike to engage with customers through gamification, challenges, and social sharing.1
Spotify
Spotify uses a marketing information system that analyzes customer listening behavior to make personalized music recommendations and playlists. The system collects data on customer preferences, listening habits, and social interactions, and uses this information to create custom playlists and suggest new songs and artists. Spotify also uses the system to run targeted advertising campaigns and track customer engagement.2
Benefits of Marketing Information System
Companies can gain valuable insights into customer preferences, market trends, and competitor activities by utilising an MIS. Here are four of the most important benefits an MIS can provide for companies looking to enhance their marketing efforts and achieve long-term success.
Improved decision-making
A marketing information system provides relevant and timely information about customers, competitors, and the market, enabling companies to make better-informed decisions about marketing strategies, product development, and resource allocation.
Enhanced customer insights
A marketing information system enables companies to gather and analyze customer data, including preferences, behaviors, and feedback. This helps companies better understand their customers and develop more effective marketing campaigns and product offerings.
Increased profitability
A marketing information system can help companies identify new market opportunities, optimize pricing strategies, and reduce costs. Companies can increase revenue and profitability by improving their marketing and sales efforts.
Competitive advantage
Using MIS lets companies stay updated with market trends and competitor activities. This information can be used to develop more effective marketing strategies and gain a competitive advantage in the market.
Marketing Information System Importance
Marketing information system importance comes from the helpful insights it provides. Marketing information systems refer to all data from facts, opinions, viewpoints, rules, and regulations required to make essential marketing choices.
The information comes from various sources, including customers, rivals, the firm's sales force and other employees, government sources, specialist agencies, etc.
The management information system (MIS) offers information pertinent to the business environment, including its internal and external settings. This kind of knowledge is vital for making sound decisions
The use of MIS allows managers to spot patterns in the market effectively.
Changing tendencies may be seen in various areas, including pricing, product design, packaging, advertising strategies, etc. Having such information enables companies to adjust their strategies accordingly.
In reaction to shifting patterns in the external environment, managers can make sound judgments about pricing, product designs, and other aspects of the business.
Examining the market to design the product, choose its price, promote it, and distribute it is necessary. Such planning will become much more challenging if the firm does not access sufficient information.
Suppose a company was to design a new type of electric vehicle (EV) that would become a direct competitor to Tesla. In that case, the company should have extensive information on all the current and potential EV consumers. Neccessary market information would include customer preferences, the value of the EVs, and what a new entrant can offer to make customers want to buy the new EV.
Marketing information systems guarantee that an organisation's employees communicate effectively with one another. It offers team members reliable information that keeps all internal teams informed and focused on specific tasks and objectives. Giving everyone the same access to the same information may also assist in reducing the likelihood of misunderstandings occurring.
Implementing a marketing information system may contribute to a firm's overall accomplishments. A company may arrive at more innovative choices if it uses effectively structured data. It could also find new methods to enhance or extend an organisation's system and create more efficient strategies.
Marketing Information System - Key takeaways
- A marketing information system helps marketers improve their decision-making by collecting, storing, analysing, and disseminating relevant data about their marketing efforts.
- The components of a marketing information system include internal reports, marketing data support systems, marketing intelligence, and marketing research.
- Marketing information systems use a sequential process to aggregate data, exchange discoveries, and ultimately impact decision-making.
- Marketing information systems refer to all data from facts, opinions, viewpoints, rules, and regulations required to make essential marketing choices.
References
- Alex Barseghian, How Nike Is Using Analytics To Personalize Their Customer Experience, Forbes, 2019, https://www.forbes.com/sites/forbestechcouncil/2019/10/07/how-nike-is-using-analytics-to-personalize-their-customer-experience/?sh=50ac3a6b1611
- Seth Brenner, What Can Brands Learn About Data-Driven Marketing from Spotify Wrapped? , 2021, https://clarkstonconsulting.com/insights/data-driven-marketing-from-spotify-wrapped/
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