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Chapter - 3
Marketing Information System
And
Demand Measurement
Marketing Information System And
Demand Measurement
Chapter - 3
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Marketing Information System and Its Components
Marketing Research : Areas and Process
Marketing Demand and Its Measurement
Methods and Estimating Current and Future
Demand
• Practice of Marketing Information System (MIS) in
Nepal
Market Information
Marketing Information System
The information which is related to
competitors, customers, suppliers,
intermediaries, sales persons, marketing mix,
and other forces are market information. They
are obtained from different sources such as
marketing research system, marketing
intelligence system, internal record system,
and marketing decision support system.
MIS is an ongoing organized procedure to generate,
analyze, disseminate, store, and retrieve information
for use in marketing decisions. It consists of
integrated combinations of information, information
processing and equipment, software, and
information specialists that serve the various
analyses, planning, and control needs of marketing
decision making. MIS serves marketing process,
marketers, and stakeholders such as suppliers,
intermediaries, and marketing agencies.
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Definition
According to Philip Kotler “a marketing information
system consists of people , equipment, and
procedures to gather , sort, analyze, evaluate,
and distribute needs, timely, and accurate
information to marketing decision makers”.
Features
MIS is made up of people
- MIS is equipment based
- MIS is a continuous process
- MIS provides valuable information
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Components of Marketing
Information System
Internal records system
Marketing intelligence system
Marketing research system
Marketing decision support system
Importance Of Marketing Information
System
• To improve the efficiency of a company’s operations
• To collect information about the needs of the consumers
• To provide pertinent decision making information to
marketing managers on regular basis
• To help recognize trends and change
• To analyze marketing information and gathers it from
sources inside and out an organization
• To facilitate marketing planning and control
• To provide marketing intelligence for the organization
• To close the information Gap
• To evaluate and control
Internal Records System
A major component of marketing information system is
internal record system. Marketers get different kinds of
information from the internal records of the company such
as sales, cost , inventories, cash flow, account receivable,
and account payable.
- Customer related records : profile, bills, invoice, inventory
records etc.
- Sales related records : total sales, sales return, discount,
commission, sales and sales return trend etc.
- Other records : special report, annual report, audit report,
financial report etc.
Problems faced :
1. Older data becomes obsolete.
2. Maintenance & storage could be a proble m.
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Marketing intelligence system
• Another major component of marketing information
system is marketing intelligence system. Marketing
intelligence system is a set of procedures and sources
used by managers to obtain everyday information
about pertinent developments in the marketing
environment.
• Intelligence system helps marketers to identify their
weak and strong aspects, to utilize opportunities and
to improves their weaknesses.
# Formal sources : sales persons, intermediaries, marketing
information center, specialist and private agency etc.
# Informal sources : news paper, magazines, trade journal etc. and
interactions with company’s employee and customer.
Marketing Decision Support System
• Marketing decision support system is a procedure
that allows a manager to interact with data and
methods of analysis to gather, analyze and interpret
information.
Components of MDSS
- Data bank :
is a store of a data. Data and information received from
different sources such as customer, competitors, suppliers, salespersons
etc.
- Methods bank : is statistical tool’s bank. It store statistical tools such as
average, percentage, tabulation, diagram, regression, co-relation etc.
- Modal bank : has different kinds of model such as markov model,
Queuing model, new product pretest model, game theory, statistical
decision theory etc.
Marketing Research system
• Marketing research system is another important
component of marketing information system. It is
the systematic design, collection, analysis and
reporting of data and findings relevant to a
specific marketing situation facing the company.
The main purpose of marketing research is to
provide reliable, complete, and up- to- date
information for decision making.
Major aspects :
Product research; Price research; Place research;
Promotion research
Marketing Research
• Marketing is defined as the performance of
all activities necessary for the conception,
pricing, promotion, and distribution of ideas,
good and services to create exchanges that
satisfy individual and organization objectives.
• Marketing Research is systematic design, and
analyses and reporting of data relevant to
specific marketing situation facing an
organization.
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Area of Marketing Research
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Marketing research helps to solve these marketing problems
quickly, correctly and systematically. Marketing research is very
systematic, scientific, objective and organized.
Major areas of marketing research are as follows :
Product research : Quality, Features, style and color, Brands name,
packaging, New product development, Service after sales etc.
Price research : Price level, Pricing policies, Payments, Pricing
method, Discount etc.
Distribution research : Channel, Warehousing, Order processing,
Distribution costs & area, Transportation, Inventory level
location etc.
Process of Marketing Research
• Marketing research is the systematic
gathering recording, and analyzing of data
about problems relating to the marketing of
product or service.
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Marketing research is a process which consists of following
steps :
1. Problems Definition
2. Research Design formulation
3. Data Collection
4. Interpreting and reporting the findings
Promotion research : Advertising, Personal selling, Media,
Publicity , sales promotion etc.
Step 1 :Problem Definition
Researcher should take into account
• the purpose of the study
• back ground information
• information needed
• how it will used in decision making
Problem definition includes discussion with
industry experts, decision makers, analysis of
secondary data and perhaps etc.
Step 2 : Research Design formulation
• Research design is a blue print or basement of
research
• Research design formulation steps are :
1. Definition of the information needed
2. Method of collecting data
3. Measurement and scaling procedure
4. Questionnaire design
5. Sampling process and sampling design
6. Plan of data analysis
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Step 3 : Data Collection
• Data collection through e-mail, face to face
interview, questionnaire, telephone calls etc.
• Giving proper training and supervision to the
field work staff for minimizing data collection
errors.
Step 5 : Report Preparation And
Presentation
• The entire project should be documented in a
written report that addresses the specific
research questions identified.
• It includes tables, figures, graphs to enhance
clarity and impact.
• It is presented in a comprehensible format.
• Management can use this report for decisionmaking process.
Step 4 : Data Preparation And Analysis
• It includes editing, coding, transcription,
computer entry and verification of data.
• The data are analyzed and provide in put into
the management decision problem.
• Use of computer software
• To determine values, relationship and effect
in the reflected in the data.
Market Demand And Its Measurement
Market Demand :
• A demand is a customer’s wants, ability to
pay, and willingness to pay price for a specific
goods or service.
• Market demand is the total demand for a
product from buyers in the market.
• It is the aggregate of the demands of all potential
customers for a specific product over a specific
period in a specific market.
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Market Demand
• Current Market Demand
is the maximum level of demand in
a market during a current period, with a given level of marketing efforts
under a certain set of market conditions. Price of the goods and service, price
of related goods and service, income of buyers and expectation of the major
determinants of current market price.
• Future Market Demand
is the sum of the individual demand
for a product for a product from buyers in the market for a certain future
period of time. Future market demand can be estimated by conducting
surveys and test marketing to a population sample.
• Demand Forecasting
refers to the process of predicting
customer demand for a certain product and services, Demand forecast is
based on three questions : 1) What people say ? 2) What people do ? And 3)
What people have done ?
Measurement of Market Demand
• 2. Company Demand
Company demand is the company’s estimated share of the
market demand, at different levels of marketing efforts in a
given time period. The company’s share of demand will
depend on how its products, services, prices and
communications are perceived relative to competitors.
Measurement of Market Demand
• Measurement of market demand is one of the most
important activities in a organization. Estimation of the
current and future size of the market for a particular goods
or service is market measurement. Total market demand
and company demand are the major concept of measuring
market demand.
1.Total Market Demand : Market demand for a product
is the total volume that would be bought by a defined customer
group, in a given territory, time period and under certain
environmental conditions. Given a change in any of the
variables, the demand estimate would also change.
Estimating Current and Future Market
Demand
• Estimating Current Market Demand
Current market demand is the Marketing executive’s first
need is to estimate the total market potential, area market
potential, total industry sales and market shares.
• Total market potential: It is the maximum amount of sales
available to all firms in an industry during a given time
period, marketing effort and environmental conditions. A
common way to estimate the total market potential is to
estimate the total number of potential buyer’s average
quantity per buyer price.
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• Area market potential: companies need to assess the
market potential of different territories, for optimal
allocation of resources to the different territories. Two
major methods available are the market buildup method
and multiple factor index method.
The market build up method calls for identifying all
potential buyers in each market and estimating their
potential purchases. This method produces results if one
has a list of potential buyers and a good estimate of what
each one will buy.
Industry sales and market shares: besides estimating the
total population and area potential, the company also
needs information on actual industry sales taking place
in its market. This means identifying its competitors
and estimating their sales. Industry associations collect
and publish total industry sales. Companies also buy
reports from market research agencies that audit total
sales and brand sales data.
Estimating Future Market Demand
Statistical Method
Future market demand is the sum of the individual
for a product from buyers in the market for a
certain future period of time. The major methods
of estimation future demand are follows :
Survey methods : Survey is a method of gathering
information from respondents. Under this method,
the consumers are contacted directly and are asked
about their intentions for a product and their
future purchase plans through a questionnaire. The
survey method includes:
#Consumer survey method ; # Opinion poll method
Statistical methods are also used in estimating future demand and
sales forecasting. It is the best available technique and most
commonly used method in recent years. Under this method,
mathematical concepts, formulas, models and techniques,
equation etc are used in order to estimate future demand of a
particular product. The statistical method includes :
# Trend projection method- Graphical technique, Least
square technique, and box- Jenkins technique (short term
predictions )
# Economic indicators : Leading indicators( price), coincident
indicators(GDP), and Lagging indicators(GNP, consumer price
index, interest rate )
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Practice of Marketing Information
System in Nepal
MIS as is an ongoing, organized procedure to
generate, analyze, disseminate, store, and
retrieve information for used in marketing
decisions. It consists of integrated combinations
of information, information processing and
equipment, software, and information specialists
that serve the various analysis, planning and
control needs of marketing decision making. It
serves marketing process, marketers, and
stakeholders such as suppliers, intermediaries,
and marketing agencies.
This is the age of information technology.
Nepal has also moved forward in the
development of information technology. The
development of telephone, mobile, fax,
internet etc. has made marketing research
easy and simple. In this context, marketing
manager in Nepal also are gradually chaining
their traditional decision making style into
modern style and started using MIS in taking
marketing decision.
Components of MIS in Nepal
Four components
1. Marketing research : Marketing research system
is the systematic design, collection, analysis and
reporting of the data and findings relevant to a
specific marketing situation facing the company.
Major aspects of marketing research are :
4p research,
Consumer research,
sales research, and
competition research.
- Decision support system are lacking.
- Most organization are in lack of technology.
Moreover they have no manpower to handle them.
Its use however in modern period is increasing.
- Research is rarely done.
Most decisions are intuitions and hunches
based.
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2. Marketing Intelligence :
3. Internal Records
Marketing intelligence system is a set of
procedures and sources used by managers to
obtain everyday information about pertinent
development in the marketing environment.
Identify – strong and weak aspect, utilize
opportunities, and improve their weakness.
Information collection - formal and informal
sources
Marketers get different kinds of information
from the internal records of the company such
as sales report, statement of cost, annual
report, special report, audit report,
inventories, cash flow statement account
receivable and payable.
4. Marketing Decision support
Marketing decision support system is an
important component of MKIS in Nepal. It is a
procedure that allows a manager to interact
with data and methods of analysis to collect,
analyze and interpret information. It is not
widely used in Nepal.
THE END
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