In the past, most of the success in most information systems came in dealing with structured, operational, and management control decisions. However, in more recent times, exciting applications are occurring in the management and strategic planning areas, where problems are either semi-structured or are totally unstructured. Making decisions is not a single event but a series of activities taking place over time.
Suppose, for example, that the Operations Manager for the National Milling Corporation is faced with a decision as to whether to establish buying points in rural locations for the grain crop. It soon becomes apparent that the decisions are likely to be made over a period of time, have several influences, use many sources of information and have to go through several stages.
It is worth considering the question of how, if at all, information systems could assist in making such a decision. To arrive at some answer, it is helpful to break down decision making into its component parts. The literature has described 4 stages in decision making: That is, problems have to be perceived and understood; once perceived solutions must be designed; once solutions are designed, choices have to be made about a particular solution; finally, the solution has to be implemented.
Intelligence involves identifying the problems in the organisation: This broad set of information gathering activities is required to inform managers how well the organisation is performing and where problems exist. Management information systems that deliver a wide variety of detailed information can be useful, especially if they are designed to report exceptions. For instance, consider a commercial organisation marketing a large number of different products and product variations.
Management will want to know, at frequent intervals, whether sales targets are being achieved. Designing many possible solutions to the problems is the second phase of decision making. This phase may require more intelligence to decide if a particular solution is appropriate.
Here, more carefully specified and directed information activities and capabilities focused on specific designs are required. Choosing among alternative solutions is the third step in the decision making process.
Here a manager needs an information system which can estimate the costs, opportunities and consequences of each alternative problem solution. The information system required at this stage is likely to be fairly complex, possibly also fairly large, because of the detailed analytic models required to calculate the outcomes of the various alternatives.
Implementing is the final stage in the decision making process. Here, managers can install a reporting system that delivers routine reports on the progress of a specific solution, some of the difficulties that arise, resource constraints, and possible remedial actions. Consider again the problem of balancing the costs and benefits of establishing local buying points for the National Milling Corporation. At any point in the decision making process it may be necessary to loop back to a previous stage.
For example, one may have reached stage 3 and all but decided that having considered the alternatives of setting up no local buying points, local buying points in all regions, districts or villages, the government decides to increase the amounts held in the strategic grain reserve. This could cause the parastatal to return to stage 2 and reassess the alternatives.
Another scenario would be that having implemented a decision one quickly receives feedback indicating that it is not proving effective. Thus, it can be seen that information system designers have to take into account the needs of managers at each stage of the decision making process.
Each stage has its own requirements. Components of a marketing information system A marketing information system MIS is intended to bring together disparate items of data into a coherent body of information. An MIS is, as will shortly be seen, more than raw data or information suitable for the purposes of decision making.
Moreover, as Kotler's 1 definition says, an MIS is more than a system of data collection or a set of information technologies: It is suggested that whilst the MIS varies in its degree of sophistication - with many in the industrialised countries being computerised and few in the developing countries being so - a fully fledged MIS should have these components, the methods and technologies of collection, storing, retrieving and processing data notwithstanding.
All enterprises which have been in operation for any period of time nave a wealth of information. However, this information often remains under-utilised because it is compartmentalised, either in the form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is usually categorised according to its nature so that there are, for example, financial, production, manpower, marketing, stockholding and logistical data.
Often the entrepreneur, or various personnel working in the functional departments holding these pieces of data, do not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. The internal records that are of immediate value to marketing decisions are: These are but a few of the internal records that can be used by marketing managers, but even this small set of records is capable of generating a great deal of information.
Below, is a list of some of the information that can be derived from sales invoices. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns. The general topic of marketing research has been the prime ' subject of the textbook and only a little more needs to be added here. Marketing research is a proactive search for information.
That is, the enterprise which commissions these studies does so to solve a perceived marketing problem. In many cases, data is collected in a purposeful way to address a well-defined problem or a problem which can be defined and solved within the course of the study.
The other form of marketing research centres not around a specific marketing problem but is an attempt to continuously monitor the marketing environment.
These monitoring or tracking exercises are continuous marketing research studies, often involving panels of farmers, consumers or distributors from which the same data is collected at regular intervals. Whilst the ad hoc study and continuous marketing research differs in the orientation, yet they are both proactive. Whereas marketing research is focused, market intelligence is not. A marketing intelligence system is a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making.
For instance, the manager may focus more on economic and business publications, broadcasts etc. Informal search This describes the situation where a fairly limited and unstructured attempt is made to obtain information for a specific purpose. For example, the marketing manager of a firm considering entering the business of importing frozen fish from a neighbouring country may make informal inquiries as to prices and demand levels of frozen and fresh fish.
Formal search This is a purposeful search after information in some systematic way. The information will be required to address a specific issue. Moreover, the scope of the search is likely to be narrow in scope and far less intensive than marketing research Marketing intelligence is the province of entrepreneurs and senior managers within an agribusiness. It involves them in scanning newspaper trade magazines, business journals and reports, economic forecasts and other media.
In addition it involves management in talking to producers, suppliers and customers, as well as to competitors. Nonetheless, it is a largely informal process of observing and conversing. Enterprises with vision will also encourage intermediaries, such as collectors, retailers, traders and other middlemen to be proactive in conveying market intelligence back to them. Within the MIS there has to be the means of interpreting information in order to give direction to decision.
These models may be computerised or may not. A relatively modest investment in a desktop computer is enough to allow an enterprise to automate the analysis of its data. Some of the models used are stochastic, i. Brand switching models are stochastic since these express brand choices in probabilities whereas linear programming is deterministic in that the relationships between variables are expressed in exact mathematical terms. Chapter Summary Marketing information systems are intended to support management decision making.
Management has five distinct functions and each requires support from an MIS. Information systems have to be designed to meet the way in which managers tend to work. Research suggests that a manager continually addresses a large variety of tasks and is able to spend relatively brief periods on each of these. Given the nature of the work, managers tend to rely upon information that is timely and verbal because this can be assimilated quickly , even if this is likely to be less accurate then more formal and complex information systems.
Managers play at least three separate roles: MIS, in electronic form or otherwise, can support these roles in varying degrees. MIS has less to contribute in the case of a manager's informational role than for the other two.
Three levels of decision making can be distinguished from one another: Again, MIS has to support each level. Strategic decisions are characteristically one-off situations. Strategic decisions have implications for changing the structure of an organisation and therefore the MIS must provide information which is precise and accurate. Control decisions deal with broad policy issues and operational decisions concern the management of the organisation's marketing mix.
A marketing information system has four components: Internal reports include orders received, inventory records and sales invoices. Marketing research takes the form of purposeful studies either ad hoc or continuous.
By contrast, marketing intelligence is less specific in its purposes, is chiefly carried out in an informal manner and by managers themselves rather than by professional marketing researchers. What are stochastic models? For example, some marketing researches will require the application of a research methodology that is long term and complex. For example, a market research to establish the effect of a certain cereal in the market requires a long term study.
It involves the release of the seeds into the market, observation when the farmers plant it and then the effect of the cereals to the market after harvest.
The scope of this marketing research is higher as it will also require the installation of control experiments. The scope of marketing research is also determined by those who are doing it. For example, if the field research staff is well trained, carefully selected and tested to ascertain their research skills, then it is more likely that the scope of the research will be high.
This is because they are more likely to collect the data from the field in the right manner and with the least error if any. This way data is collected from the primary sources. Otherwise, the scope of marketing research will be low as the field personnel will rely on secondary materials for the data. This is the financial power behind the research expedition.
If the research is not well funded, then it might not be possible to hit a higher scope of marketing research. This is because the level of marketing research, which is scope, and the financial requirement are directly related. To have a higher scope of marketing research, you need to have a good financial backing. If you enjoyed this post, subscribe for free updates. Get free digital marketing tips in your inbox.
Marketing Research: Nature and scope of Marketing Research! Nature and Scope of Marketing Research, Marketing Research as an aid to Marketing decision making, Research Designs, Exploratory Descriptive and Conclusive Marketing Research is defined as the systematic design, collection, analysis and.
The nature of the research dictates the methodology which then impacts on the scope of marketing research. For example, some marketing researches will require the application of a research methodology that is long term and complex.
Marketing Research is systematic problem analysis, model building and fact finding for the purpose of important decision making and control in the marketing of goods and services. Marketing Research is a well-planned, systematic process which implies that it needs planning at all the stages. Marketing Research: The marketing research is helpful in analyzing the customer’s behavior, popularity of product, effectiveness of advertising, pricing policy, etc. In other words, it is the systematic gathering, recording and analyzing of data about problems relating to the marketing .