Marketing Information Systems

A certain amount of marketing information is being gathered all the time by companies as they engage in their daily operations. When a sale is made and recorded, this is marketing information that’s being gathered. When a sales representative records the shipping preferences of a customer in a firm’s customer relationship management (CRM) system, this is also marketing information that’s being collected. When a firm gets a customer complaint and records it, this, too, is information that should be put to use. All this data can be used to generate consumer insight. However, truly understanding customers involves not just collecting quantitative data (numbers) related to them but qualitative data, such as comments about what they think.

The trick is integrating all the information so it can be used by as many people as possible in an organization to make good decisions. Unfortunately, in many organizations, information isn’t shared well among departments. Even within departments, it can be a problem. For example, one group in a marketing department might research a problem related to a brand, or uncover certain findings that would be useful to other brand managers, but never communicate them.

A marketing information system (MIS) is a way to manage the vast amount of information firms have on hand—information marketing professionals and managers need to make good decisions. Marketing information systems range from paper-based systems to sophisticated computer systems. Ideally, however, a marketing information system should include the following components:

· a system for recording internally generated data and reports

· a system for collecting market intelligence on an ongoing basis

· marketing analytics software to help managers with their decision making

· a system for recording marketing research information

Internally Generated Data and Reports

An organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. Firms are also constantly gathering information related to their websites, such as clickstream data. Clickstream data is data generated about the number of people who visit a website and its various pages, how long they dwell there, and what they buy or don’t buy.

Companies use clickstream data to monitor the overall traffic of visitors, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions by virtue of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from websites and generate reports for managers based on that information. Netflix awarded a $1 million prize to a group of scientists to plow through web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent (Baker, 2009).

Being able to access clickstream data and other internally generated information quickly can give a company’s decision makers a competitive edge. In one example, Walmart took advantage of Target after 9/11 because Walmart’s inventory information was updated by the minute; Target’s was only updated daily. When Walmart’s managers noticed American flags began selling rapidly immediately following the terrorist attacks on 9/11, the company quickly ordered as many flags as possible from various vendors—leaving none for Target.

Many companies make a certain amount of internal data available to their employees, managers, vendors, and trusted partners via intranets. An intranet is a private, internal website that looks like the web and operates like it, but only an organization’s employees have access to the information. So, for example, instead of a brand manager asking someone in accounting to run a report on the sales of a particular product, the brand manager could look on the firm’s intranet for the information.

However, big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard.

Analytics Software

Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. Analytics software allows managers who are not computer experts to gather different information from a company’s databases—information not produced in reports regularly generated by the company. The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” Oracle Corporation’s Crystal Ball is one brand of analytical software.

The camping, hunting, fishing, and hiking retailer Cabela’s has managed to refine its marketing efforts using analytics software developed by the software maker SAS. “Our statisticians in the past spent 75 percent of their time just trying to manage data. Now they have more time for analyzing the data with SAS, and we have become more flexible in the marketplace,” says Corey Bergstrom, director of marketing research and analysis for Cabela’s. “That is just priceless” (Zarello, 2009).

The company uses the software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. It combines the information with web browsing data to gain a better understanding of the individual customers’ marketing channel preferences as well as other marketing decisions. For example, does the customer prefer Cabela’s 100-page catalogs or the 1,700-page catalogs? The software has helped Cabela’s employees understand these relationships and make high-impact data-driven marketing decisions (Zarello, 2009).