A Marketing Information System is basically a way of regularly gathering and giving helpful marketing information to the right people at the right time.
The key element is knowing what kind of information is needed by whom and when.
Information needs, information sources and information costs change over time and so a review, or information audit, is worth doing every few years.
An information audit specifies who needs what and when. The audit can also list where the information can be found – the gold mine of information sources.
There are many different types of information which a marketing manager uses, and many ways of building a marketing information system. Here is one way of thinking about it.
Consider these components: Internal Information; External Information; Position Information; Decision Information and Forecast Information.
Examples of internal information are sales reports, sales analyses, cost per sale and cost per enquiry. Most of the raw data is already available within the organisation. It just needs to be processed or analysed so that it becomes helpful information. This is relatively easy to do if there is an information system. Customer database systems for example, automatically convert customer data into marketing opportunities like identifying which customers are ready to buy this month, next month or next year.
External information covers the market out there – its size, structure, trends, opportunities, threats, competitors and customers both new and old – the constantly changing market place. All kinds of employees, customers and distributors can contribute to this pool of marketing intelligence.
Position information puts internal and external information together, like the organisation’s sales and the overall sales in the market to calculate market share.
Similarly, internal strengths & weaknesses can be compared to competitors to find competitive advantage, USP’s (Unique Selling Points), and most importantly whether any competitive advantage is sustainable.
Decision Information comes from mathematical models which carry out various analyses such as regression, correlation, factor, and cluster analyses. You can see Coca Cola talking about decision models in the browser later.
Forecast information obviously looks into the future and includes sales forecasts – the backbone of the marketing plan.
Some of this information is free, some is expensive, some takes time to gather and analyse, some is just not worth the effort in the first place.
There is, therefore, a trade-off between the importance, or value, of information and its cost in terms of time and money. Experienced managers know which information affects which decisions. They know which information is vital.
Roles and Types of Research
There are some general categories of research: primary and secondary; qualitative and quantitative. Primary research is carried out primarily for an organisation’s own use. Secondary research uses research already carried out by someone else for some other purpose. Desk research checks secondary sources before carrying out the more expensive primary research.
Quantitative research delivers hard data such as numbers and percentages of buyers who buy, or who remember advertisements. Qualitative research delivers soft data which reveals WHY buyers buy or why they remember.
Research can basically provide information on almost anything from markets to competitors to distributors to customers, their behaviour, their attitudes, their intentions and more.
Market Reports provide information on markets, their size, structure, key players, their market share, trends, prices and more. These reports are published annually and are available as secondary sources.
Retail Audits measure market sales, competitor’s sales, market share, prices, special offers, stock levels week by week or day by day.
Customer surveys use carefully structured questionnaires to measure customer attitudes, levels of awareness, intentions to purchase, actual purchases and much more.
Qualitative research techniques such as focus groups and in-depth interviews can reveal deeper customer thoughts, motivations, perceptions and reactions to old and new products, packs, prices or advertisements.
Customer reactions can also be measured by simulated test markets and, ultimately, real test markets.
Consumer panels provide information on customer lifestyles, media habits and consumption patterns; while insights into future customer lifestyles are forecast by social forecasters and futurologists.
Research is available for almost any type of information required. But remember; always start with desk research. Think ‘secondary first’ – always see if someone else has already done the work for you. Mind you, you need to look carefully at the relevance and accuracy of other people’s information before using it to make your own decisions.
Finally, check why you need the information in the first place. Ask what decisions it will affect. This helps to screen out the less important information which can drown a busy manager. After that you can choose what type of marketing research best suits your information needs.
Market Research Process
There is a sequence of activities, a process, involved in marketing research.
Firstly define the precise information required, then plan the research, collect the data, analyse it, present the findings and finally, use the information to make better decisions.
The first stage involves clearly defining the problem or the specific information needed. This is crucial. What information do you need? How will it affect your decisions?
The next stage is to develop a research plan. This means planning how to collect, store and analyse the information, how long it will take to get it, and how much it will cost.Decisions about research methods and sources, whether secondary or primary, qualitative or quantitative, need detailed consideration. The selection of research tools, sample types and sizes all need to be carefully planned. Some plans even build in piloting, or testing the research to see if it works.
Sometimes several research agencies are invited to make research proposals showing how they plan to collect the required information within the specified time scale and budget.
After the detailed planning comes the execution: collecting the data, whether by survey, discussion group or other methods.
Next comes the analysis. In the case of quantitative research this means crunching the numbers; and in the case of qualitative research this means interpreting the discussions; drawings and suggestions.
Next comes the presentation – the research is written up in a report and the key findings are presented along with the research structure and the detailed calculations. The good researcher will also provide implications/ recommendations, even if the client subsequently ignores the advice!
Last, but certainly not least, comes the interesting bit – the reason why the research was carried out in the first place: to help make a decision. Using the information means taking guidance from the research to make a better marketing decision.
Marketing research doesn’t make decisions – it simply helps managers to make better decisions – more informed decisions.
Successful decisions are helped by good information and the quality of the information is directly affected by the quality of the whole research process. It needs to be managed carefully.
Consumer Marketing Research Applications
Marketing managers cannot survive without a constant pipeline of relevant information. They need to know about emerging issues, shifts in customer perceptions, how likely they are to buy, why certain customers buy or don’t buy, what advertisements are getting through and much more.
Marketers generally draw on a mix of research tools using primary and secondary sources, qualitative and quantitative techniques.
Here’s how Southwestern Bell Cable Television use marketing research and marketing information systems:
We carry out all kinds of market research; to know more about our customers…
It probably falls into two or three types. One is trend kind of analysis where every year we do almost the same piece of research to see how we are changing. For instance, how is the customer perceiving the channels we offer, do they still see one particular channel that’s arts and performance, let’s say, the same way they did last year, or has something changed? That’s one piece of research.
Another would be one-offs, if you will, where we want to explore a particular issue. For instance, in the North West of England we have one community that’s taking up cable television at a much slower rate than another. Well we can conjecture why that might be, but on the other hand it might be a good idea, and which we have done, gone in and just look to respondents in that community to tell us what it is about you or your community that has been a problem.
In addition to those other kinds of market research, we also will tend to look at research that gets at the barriers. Why do people not buy our product? We can’t always know that from trend analysis or, let’s say, from even one-offs. Periodically we will ask customers who are not our customers “why aren’t you with us?” and we will go in and do specific research, testing particular issues, maybe it’s a benefit statement that they are not hearing, or maybe it’s a certain attribute of the product we’re not aware of that they are focusing on.
Here’s how we know if we are doing well or not in our marketing. We have our standard reports – the numbers, if you will, week on, month on – you know, have we grown? That’s easy but we also have some key measures we look for, that really are to relate back to our strategies. Let’s say we want to improve customer awareness of a particular product; well, we can measure likelihood to buy – has that moved up? Awareness of products: simply asking you, ‘Are you aware of Discovery Channel?’ – a little bit more this month or a little bit less; why is that? We can always check then if we are doing the right things to move people along.
The last thing is simple focus groups – if you want a quick, easy measure, not necessarily one you want to go and do something about immediately but at least to get a gut feel, that’s a good way to go.
Organisational Market Research
Organisational marketing research is fundamentally the same as consumer marketing research.
Both use primary and secondary sources, qualitative and quantitative techniques, internal and external sources.
Both use telephone interviews, face-to-face interviews but organisational marketing research does not use street surveys, door-to-door interviews or hall tests.
Take Concord Supersonic Jets – their customers are mostly corporate or business people from major corporations. They use marketing research all the time. Face-to-face interviews, customer surveys and even internal accounting provide a constant supply of vital marketing information.
So let’s hear them talk about their research:
Researching Concorde passengers actually isn’t too bad. The primary place that we do it is in the lounge. People tend to turn up for Concorde approximately 40 minutes to an hour before we actually depart. And they’re in the lounge and now some of those people are making last minute telephone calls but many of them aren’t and they are very happy to talk to us about the aircraft. We also will research them on board, that has to be done very discreetly and this can obviously only be done if they are happy to be spoken to. But what you find is, that the frequent Concord passenger isn’t buying the service per se, so they’re not interested in the meal, and so they are… if you like, if they are not working then they are happy to talk to you on board. So primarily we will do it either in the lounge or on board.
Historically, we try to do it at their work place and as they are quite frankly they are so senior as individuals it can be quite difficult to get time in their diaries.
As a manager in terms of reviewing the performance of Concorde I would look to two primary things to tell me whether or not if I’m doing well.
The first is customer satisfaction. We have on-going measures of whether or not our customers are saying this is good or bad. Not only in terms of market research which we would conduct periodically, but we have the customer complaints and so on a monthly basis I know how many people have written in to complain about Concord or have phoned to complain about it and what they have complained about. So I can very quickly get a handle on do we have any issues that are growing here that are outside of the norm.
The second area there again on control is I know what the financial performance is. So again I can quickly get a view on; how we’re doing this month and what are the forward bookings like? So how many people have booked now for December and how does that compare with last year, is it up? Is it down? If it’s down is it down by a lot? If it’s down by a lot do we have to put some incentive in now in order to get those bookings up.
So the two things that I would be looking at are: the weekly sales figures, weekly forward bookings and the performance in terms of customer complaints and then on a longer scale the overall customer satisfaction studies we would conduct either annually or bi-annually.
So there you have some of the marketing research tools which British Airways use to help them market their supersonic Jets.