LESSON 2
MARKETING INSIGHTS THROUGH
MARKETING INFORMATION SYSTEM
AND MARKETING RESEARCH
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Company
LOGO
SYNOPSIS
LESSON 2 (Marketing Insights)
focuses on components of marketing
information system (MIS) used by
business organisations to capture
marketing insights to help in their
decision makings. The lesson
includes explanation of how
marketing research is conducted.
Learning Outcome
After completing LESSON 2,
candidates should be able to:
• Identify the components of
marketing information system (MIS)
in business organisations.
• Discuss the methods usually used
by business organisations to track
and identify opportunities in the
marketplace.
• Identify the steps of how a
marketing research process is
conducted.
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• A marketing information system (MkIS) is
a management information system
designed to support marketing decision
making.
• Jobber (2007) defines it as a "system in
which marketing data is formally
gathered,
stored,
analysed
and
distributed to managers in accordance
with their informational needs on a regular
basis."
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• A marketing information system (MkIS) is
a software program that provides
information about marketing research.
• It allows users to compile and analyze
data in a very easy, organized fashion.
• MkIS systems are also effective tools that
help users make decisions about
consumer behavior and the marketing mix,
including products and how they are
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placed, priced, and promoted.
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What is Marketing Information
System (MIS)?
• 3 Components:
– People,
– Equipment, &
– Procedures
•
Process: accurate information is gathered, sorted,
analyzed, evaluated and distributed to marketing
decision makers as needed and in timely fashion.
– Developed from: • Internal records
• Marketing intelligence activities
• Marketing research
• Benefit: e.g. provide management with rich detail
about what buyer wants, preferences, & behavior.
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INTERNAL RECORDS
• Comprising of sales data, customer database, product
database, financial data, operations data, etc.
• The information can be collected from the documents
such as invoices, transmit copies, billing documents
prepared by the firms once they receive the order for the
goods and services from the customers, dealers or the
sales representatives.
• The companies store their data in the data warehouse
from where the data can be retrieved anytime the need
arises.
• Once the data is stored, the statistical experts mine it by
applying several computer software and techniques to
convert it into meaningful information that gives facts and
figures.
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Internal Records that are useful…
• ones that supply results data
• ones that can spot important opportunities & problems
• Examples:
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MARKETING INTELLIGENCE
SYSTEM
• provides the data about the happenings in
the market, i.e. data related to the
marketing environment which is external to
the organization.
• Includes the information about the
changing market trends, competitor’s
pricing strategy, change in the customer’s
tastes and preferences, new products
launched in the market, promotion strategy
of the competitor, etc.
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Marketing Intelligence System
• ones that supply ‘happenings’ data (everyday
info) within the marketing environment; e.g. from:
Reading books
Newspapers
Trade Publications
Govt. data resources
Purchased info
meeting with
Talking to customers,
other company
suppliers, employees &
Managers, networking
distributors
Customer advisory panel
Online feedback
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Marketing Intelligence System
• Customer Intelligence – Useful information
on customers’ business, preferences or
loyalties, personal demographic details
• Computer Intelligence – information on
strengths and weaknesses of each
competitors, the tactics and strategies
used by them
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Six Major Environmental Forces
• Demographic
– background of people that make up markets
– Gender, age, education level, ethnicity, etc
– Refer next slide on Malaysia’s population statistics
• Economic
– purchasing power, income distribution, debt, savings, credit availability,
etc.
• Socio-Cultural
– How society develop views of themselves, others, organisations, society,
nature, and universe
– Make up beliefs, values, norms
• Natural environment
– Depletion of resources, increased cost of energy, anti pollution groups,
government’s role, etc.
• Technological environment
– Question of whether innovation will ‘construct’ or ‘destruct’ lives?
• Political-Legal
– Business legislation, pressure from special interest group, lobbyist, etc.
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What is Marketing Research?
A formal marketing study conducted to investigate
specific problems and opportunities for a company.
 It consists of a systematic design, proper data
collection, analysis, and report
The findings reported are those relevant to a
specific marketing situation facing a company.
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MARKETING RESEARCH
• Is a systematic collection, organization, analysis and
interpretation of the primary or the secondary data to find
out the solutions to the marketing problems.
• To analyze the marketing environment comprising of
changes in the customer’s tastes and preferences,
competitor’s strategies, the scope of new product launch,
etc. by applying several statistical tools. In order to
conduct the market research, the data can be either
primary data (the first-hand data) or the secondary data
(second-hand data, available in books, magazines,
research reports, journals, etc.)
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MARKETING DECISION SUPPORT
SYSTEM
• It includes several software programs that
can be used by the marketers to analyze
the data, collected, to take better marketing
decisions.
• With the use of computers, the marketing
managers can save the huge data in a
tabular form and can apply statistical
programs to analyze the data and make
the decisions in line with the findings.
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What questions to ask when developing
an effective MIS?
• Decisions:
– What kind do you usually make?
• Information (i.e. daily, periodically, special case):
– What kind do you need to make these decisions (e.g.
source)? And when?
– What kind do you normally get (e.g. source, analysis)?
– What actually do you want that you are not getting now?
• Improvements:
– What things to improve in the present marketing
information system?
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Types of Marketing Research
• One conducted by specialised marketing
research firms, i.e.:
– Syndicated-service research firms
– Custom marketing research firms
– Specialty-line marketing research firms
• One conducted by others, e.g.:
– Students or professors from universities for
special assignments or projects
– Through Internet search
– Spy on rival companies through visits, etc.
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“If you don’t have marketing research to help
you figure out what is changing and what
the future will be, you will be LEFT
BEHIND”
Fuji Photo Film’s Director of Category Management & Trade
Marketing.
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What is the process of conducting a Marketing
Research?
Step 1:
Define problem
& research objective(s)
Step 6:
Make decision
Step 2:
Develop
research plan
Step 3:
Collect necessary
information
Step 5:
Present findings
Step 4:
Analyse information
collected
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Step 1: Define problem and research
objective(s)
• Define problem to study - not too
broadly or too narrowly
• Specify decision alternatives
• State specific research objectives
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Step 2: Develop research
plan
•
Data sources
– Secondary? Primary? Or both?
•
Research approach
– Observation? Focus group? Survey? Behavioral data?
Experimental?
•
•
Research instruments
- Questionnaires? Qualitative methods? Mechanical devices?
Sampling plan
– Unit of analysis - who? Size – how many? Procedure - how?
•
Contact methods
– Mail? Telephone? Personal? Online?
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How to Develop Good Questionnaire?
•
•
•
•
•
•
Ask bias free questions
Ask simple questions
Ask specific questions
Ask jargon free questions
Use unsophisticated words
Avoid ambiguous words
(several possible meaning)
• Avoid negative worded
questions
• Avoid hypothetical questions
• Avoid words that could be
misheard (i.e. through
phone interview)
• Use response bands for
sensitive questions
• Allow for “other” in fixed
response questions
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Examples of Close-ended Question
1. Dichotomous:
Did you use media to find information for this trip?
Yes  No
2. Multiple Choice:
Who influence you the most when deciding on this trip?
 No one
My spouse
My children
My tour agent
My friends
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Examples of Close ended Question
3. Likert Scale: Indicate your level of agreement with the
following statement: School is a place to learn new things.
 Strongly disagree
 Disagree
 Neither agree nor disagree
 Agree
 Strongly agree
4. Semantic Differential Scale:
Universiti Sains Malaysia
Large………………………………… ………………………………...…………….Small
Experienced………………….…………………………………………….Inexperienced
Modern…………………………………………………………..………….Old-fashioned
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Examples of Close ended Question
5.Importance Scale: Classroom cleanliness is _____ to me.
 Extremely important
 Very important
 Somewhat important
 Not very important
 Not at all important
6.Rating Scale: The classroom cleanliness is _____.
 Excellent
 Very good
 Good
 Fair
 Poor
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Examples of Close ended Question
7. Intention to Buy Scale:
How likely are you to buy cosmetics through
Internet?
 Definitely buy
 Probably buy
 Not sure
 Probably not buy
 Definitely not buy
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Examples of Open-ended Question
1. Completely Unstructured:
What is your opinion of Universiti Sains Malaysia?
_______________________________________________________________
_______________________________________________
2. Word Association:
What is the first word that comes to your mind when you
hear the following?
Universiti ________________________
Malaysia_____________________
Science _______________________
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Examples of Open-ended Question
3. Sentence Completion: When I choose a university, the
most important consideration in my decision is:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________.
4. Story Completion: “I went to McDonald’s a few days ago.
I noticed that the exterior and interior of the restaurant had
very bright colors. This aroused in me the following thoughts
and feelings.” Now complete the story.
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
___________________________________________________
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Examples of Qualitative Measures and
Mechanical Devices
Qualitative Measures:
Mechanical Devices:
• Shadowing
• Galvanometers
• Behavior mapping
• Tachistoscope
• Consumer journey
• Eye cameras
• Camera journals
• User interviews
• Storytelling
• Audiometers
• Global Position System
(GPS)
• Unfocus group
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Types of Samples
Probability
• Simple random
• Stratified random
• Cluster
Nonprobability
• Convenience
• Judgment
• Quota
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Contact Methods
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Mail questionnaire
Telephone interview
Personal interview
Online interview
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Step 3: Collect information
• Expensive exercise and error prone
– E.g. researcher’s bias, respondents’ bias, mortality
rate
• Refer Mediamark Research, Neopets.Com on p. 106107 and Marketing Memo: Pros and Cons of Online
Research (p.107) for more information!
Step 4: Analyse information
• Error can easily happen
• e.g. statistical techniques and models used,
interpretation of findings
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Step 5: Present findings
• Only present those that are relevant to research
objectives that can help management to decide
Step 6: Make decision
• points to ponder
• are management confident with the findings?
• is it enough to make decision?
• is more research needed to be carried out?
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What are Characteristics of Good
Marketing Research?
 The use of scientific method
 Elements of research creativity in
solving problem at hand
 The use of multiple methods to
increase confidence in study
 Interdependence of models & data
 Value and cost of information
 Healthy skepticism
 Be ethical at all times
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Measuring Marketing Productivity: What are
Marketing Metrics?
- measures used to evaluate firm’s marketing performance.
- e.g. customer-performance scorecard, stakeholder
performance scorecard
External Measure
Internal Measure
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•
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•
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•
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•
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Awareness
Market share
Relative price
Number of complaints
Customer satisfaction
Distribution
Total number of customers
Loyalty
Awareness of goals
Commitment to goals
Active support
Resource adequacy
Staffing levels
Desire to learn
Willingness to change
Autonomy
Source: Tim Ambler (2001), “What Does Marketing Success Looks
Like?”, Marketing Management, pp. 13-18
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Measuring Marketing Productivity: What are
Tools Used to Measure Marketing Plan
Performance?
• Sales analysis
– Sales variance analysis, microsales analysis
• Market share analysis
– Overall market share, served market share, relative market
share
• Marketing Expense-to-Sales Analysis
– Sales-force-to-sales, Advertising-to-sales, Sales-promotion-to-sales,
Marketing research-to-sales, Sales administration-to-sales,
• Financial Analysis
– Rate of return on net worth, return on assets, financial leverage
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How to Conduct MarketingProfitability Analysis?
Step 1: Identify Functional Expenses
Step 2: Assign Functional Expenses to
Marketing Entities
Step 3: Prepare a Profit-and-Loss Statement
for each Marketing Entity
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How To Measure Market Demand?
• Potential market
– Group of consumers who has interest in, and
capability to buy a market offer
• Available market
– Group of consumers who have interest, income, &
access to a market offer
• Target market
– Part of the qualified available market of which the
business organisation decides to pursue.
• Penetrated market
– Group of existing consumers
– who are buying the company’s products
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How to Estimate Future Demand?
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Survey of Buyers’ Intentions
Composite of Sales Force Opinions
Expert Opinion
Past-Sales Analysis
Market-Test Method
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Memory Recall
1. What are the components of MIS?
2. What are the steps used when conducting
a marketing research?
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Issues Arising
1. There is no one way to conduct research.
What is the best way to conduct marketing
research? Why?
2. Can we really predict what is going on
from the marketing research that we do?
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Closing Remarks
Thank You…
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