6/20/2019 Chapter - 3 Marketing Information System And Demand Measurement Marketing Information System And Demand Measurement Chapter - 3 • • • • 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. 1 6/20/2019 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 - 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. 2 6/20/2019 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. 3 6/20/2019 Area of Marketing Research • 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. • 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 4 6/20/2019 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. 5 6/20/2019 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. 6 6/20/2019 • 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 ) 7 6/20/2019 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. 8 6/20/2019 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 9
