Management Information System

How will you plan a Management Information System in marketing information system taking into account the actions of antecedents or consequences of consumers, competitors, employers, institutions, suppliers, wholesalers, retailers, govt. bodies and NGO’s(Note you must also take into account the physical, technological, economic factors, beside legal and social taboos) (Take an example of your choice).    

Answer:

An MIS may be defined as a set of procedures and methods for the regular, planned collection, analysis, and presentation of information for use in making marketing decisions.  This of course is a step beyond logistics systems, which handle inventory control, orders, and so forth.         It is desirable first to differentiate between the two major components of such systems - support systems and operating systems.  Support systems include those activities required to generate and manipulate data - i.e., market research and other data gathering, programming, and data processing. Operating systems are those that use the data as an aid to planning and controlling marketing activities.

The initial steps of this approach typically involve the following:

1. Look at what systems the company already has in place,
2. Determine what useful marketing information can be gleaned from those systems,
3. Identify the information marketers need that they are not getting from existing systems,
4. Create, or find, additional systems to provide the needed marketing information,
5. Integrate these systems with company wide enterprise systems (if possible and not too costly).

Management Information System in IBM Data Processing 

1. Start with the accounting system

A good place to start is the business system that every business has – the Accounting system. What information do businesses get from their accounting system that is useful to marketers?

1. Sales
2. Costs/Expenses
3. Profits

If the accounting software is well designed and flexible, this information can be sorted in a variety of ways including by (1) Sales person, (2) Product, (3) SKU (stock-keeping-unit), (4) Division or Region, (5) Distribution channel, (6) Reseller, and (7) Season.

The information obtained from the accounting system is typically enterprise-wide and at a macro level. It usually does not give marketers, or their bosses, the information necessary to (1) determine the effectiveness of the organization’s marketing efforts; (2) enable it to react quickly to real-time crises and opportunities; or (3) respond rapidly to competitive threats. Some of the information that marketers need from an effective marketing information system includes the following:

1. Marketing strategy feedback (or how well marketing strategies are working)
2. Complaints
3. Compliments (testimonials)
4. New Product ideas
5. Competition information
6. Marketplace changes

To capture and properly respond to this information, most marketers need to create a Marketing Information System that augments the macro information provided by their accounting systems.

2. Market Information Form

To minimize paperwork, marketers can collect a lot of the information from the above list on a Market Information Form (or its electronic equivalent). The information collected and how this information is used is summarized below.

1. Complaints. Once collected, complaints are distributed to those that can solve the problem quickly. The objective is to turn the negative into a positive and build a stronger relationship with the offended party. The way companies handle complaints can mean the difference between success and failure in an increasingly competitive marketplace.
2. Compliments. After obtaining permission, marketers use compliments in their marketing communications. Nothing is more effective than bona fide testimonials from customers. Copies are also given to sales people so they can put them in their sales notebooks and use them to impress prospects and close business.
3. New Product ideas. These are fed into the company’s new product development system.
4. Competition Information. This is given to sales people to put in their sales notebooks so they can use the data to answer objections and close business (with the caveat of not disparaging competitors) and is fed into the company’s new product development system so that new products can be designed to beat competitors.
5. Strategy feedback. This information is organized by the marketing building blocks (1) corporate image, (2) positioning, (3) product, (4) pricing, (5) distribution, (6) promotion, and (6) marketing information system (yes we need to collect information as to how well our MIS strategies are working). Based on feedback, strategies are adjusted as necessary.

A pad of these forms (or an electronic version) is provided to all the contact points including (1) Receptionists and secretaries that answer the phone, (2) Sales people, (3) Customer service people, (4) Repair people, (5) Personnel that respond to inquiries and complaints online and on social media, and (6) accounts receivable (since they often hear about complaints when they try to collect on late invoices).

3. Lead Card

Leads are captured on a lead card or its electronic equivalent. Sales people use the lead card to follow up on a prospect’s interest with the objective of closing the sale. In addition to notes of all contacts, there are four main pieces of information that should be captured on the lead card.

1. Identification of the prospect. If the leads are selling to a business, most of the information the lead need is on the contact’s business card. For additional information the lead need the card should be designed so the lead can add it with minimal effort.
2. Product interest. The products the lead typically sell should be pre-listed on the lead card so sales people can quickly check them off.
3. Degree of interest. This is the lead sales person's estimate of how likely the prospect is to buy the product in the current period, which is usually this month. Because the degree of interest is also called “buying temperature” the metaphor for degree of interest that is often is used is Hot for the most interested leads, Warm for the next most interested leads, and Cool for the least interested. The “Hot” leads should automatically update another MIS report called the Hot List. 
4. Lead source. All promotion that the lead do should have a unique code so that when the lead is captured, the lead know what marketing activity generated the hike. This lead source should automatically update another MIS report called the Promotion Effectiveness report.

In addition to helping sales people follow up on leads and close business, smart marketers use lead card information for other Marketing Information System purposes, such as the Hot List and Promotion Effectiveness Report described below.

4. Hot List

An MIS report called the Hot List contains the following information on “Hot” leads:

1. Prospect name. This could be a business or individual.
2. Decision makers. This is so the sales person does not waste time talking with the wrong person.
3. Product or project proposed. This is what the prospect wants.
4. Proposal date. This is the date the product proposal and estimate of the cost is given to the prospect.
5. Dollar-amount proposed. This is the price of the product proposed.
6. Percent chance of closing in the current period. To qualify for the Hot List, a Hot lead should have at least a 25% chance of closing in the current period (each company should decide their own minimum threshold for Hot).
7. Expected Value (5 multiplied by 6). If the dollar amount proposed is $10,000 and the % chance of closing is “estimated” to be 50%, the expected value would be $5,000.
8. Objections. This lists the objections that are keeping the prospect from buying.

Sales managers use the Hot List in two ways.

1. Help close sales. The sales manager helps sales people to close Hot leads by coaching them on how best to answer the Objections in column 8 of the Hot List.
2. Dynamic sales forecast. The sales manager helps to insure that the sum of Expected Values equals, or exceeds, each sales person’s quota for the month. If the expected values are lower than a sales person’s quota, the sales manager can encourage the sales person do whatever is necessary to get more Hot leads on the Hot List so that the sum of Expected Values equals or exceeds the quota. The sales quotas of all the sales people should sum to the “measurable goal” of the Marketing Plan.

5. Promotion Effectiveness Effort

As each sales person captures the promotion source for each lead on the Lead Card, the information automatically flows onto his or her Promotion Effectiveness Report. Every time a sales person gives a presentation or makes a sale from a lead, that information is recorded on the Promotion Effectiveness Report. The MIS system automatically adds up the total number of the leads, presentations, and sales company-wide for each promotion source. 

When compared to the costs of that promotion source, the marketing department can calculate the promotion effectiveness, or ROI, of each promotion. Since totals for leads, presentations, and sales are available in the MIS by sales person, the sales manager can automatically compute the batting average of each sales person and determine the number of leads and presentations each one needs to make his or her sales quota. In this way, the sales manager and the company marketers systematically work together to insure that (1) plan goals are met and (2) the money invested in promotion is not wasted (the ads and promotions that are effective will be repeated and the ones that don’t will be discontinued).

6. Market Research

The systems above (Market Information Form, Lead Card, Hot List and Promotion Effectiveness Report) typically capture information in real time and provide a lot of great information that help the marketing function do a more effective job and prove it to the CEO. Even so, this is not enough. There are still holes in the information marketers need. In an effort to plug these holes, there is one big missing piece – Market Research. There are two big categories of Market Research – Secondary and Primary.

7. Secondary Research

Secondary research is simply research done by others. Perhaps the greatest invention for secondary research is the search engine. Marketers can simply type in search terms in a search window and browse the Internet for any data related to those search terms. Furthermore, marketers can set up “alerts.” That is, search terms can be entered into a search engine so that the search engine’s crawlers will continually search for anything that contains those search terms and send the lead an email when it finds them. There are so many other sites, which marketers frequent, that provide a wealth of information. Just a few examples include: Media Post, Marketing Sherpa, Brand Channel, Hoovers, the CIA World Fact book, and Clickz.

8. Primary Research

When some big holes remain that still need to be plugged, marketers will often do primary research, which is their own research. Common forms of primary research include surveys, focus groups, experiments, and various forms of crowd sourcing.

The following are examples of marketing systems we have observed, with some of the advantages the companies claim for them.

1. Control System

These provide continuous monitoring (sometimes through exception reporting) and rapid spotting of trends, problems, and marketing opportunities.  They allow better anticipation of problems, more detailed and comprehensive review of performance against plans, and greater speed of respon se. For instance:

q  IBM's Data Processing Division has developed an MIS which district sales managers can interrogate through a time-sharing computer terminal located in an executive's office. A manager punches a typewriter-like keyboard and receives an immediate print-out of information such as:

·         Sales (or rentals) to date - broken down by product code, type of customer, and branch making the sale.

·         Sales in relation to goals.

·         Combinations of information which relate to sales, customer classifications, product codes, and so forth.

The data are current to within three or four days, allowing the manager to keep up to date on marketing problems and opportunities and on progress in relation to goals.

2. Planning Systems

These furnish, in convenient form, information the marketing executive requires for planning marketing and sales programs. At least three major consumer goods producers, for example, are developing "data books" for product managers. The books bring together the basic information a product manager needs to formulate annual marketing plans and to "replan" during the course of the year. Putting the information into one book, rather than in a welter of reports, not only saves time, but it also enables all product managers in a group or division to base their plans on the same data. Consequently, their superiors are able to review comparable information quickly when considering the plans for approval.

At a more sophisticated level, planning systems allow simulation of the effects of alternate plans so that the manager can make a better decision. For instance:

q  Pillsbury's system enables marketing managers to obtain sales forecasts for each of 39 sales branches, supported by varying levels of trade promotion. The marketing manager asks the question, "What will sales be in each branch if we spend x dollars on trade promotions in comparison with .75 x dollars and with 1.2 x dollars?" Pillsbury does not claim that the system is perfect - it is obviously no better than the assumptions on which the simulation is based - but it has had a surprisingly good "batting average" in accuracy. It has great value to marketing managers because it allows them to look at alternate plans in each of the 39 sales branches; this was never feasible before.

IN ACCOUNT OF PHYSICAL, ECONOMICAL AND TECHNOLOGICAL FACTORS EXHIBIT I. BENEFITS POSSIBLE WITH A SOPHISTICATED MIS
TYPICAL APPLICATlON		BENEFITS	EXAMPLES
PHYSICAL FACTORS	1. Control of marketing costs.	1.   More timely computerized reports.	1.  Undesirable cost trends are spotted more quickly so that corrective action may be taken sooner.
	2. Diagnosis of poor sales performance.	2.   Flexible on-line retrieval of data.	2.  Executives can ask supplementary questions of the computer to help pinpoint reasons for a sales decline and reach an action decision more quickly.
	3. Management of fashion goods.	3.  Automatic spotting of problems and opportunities.	3.  Fast-moving fashion items are reported daily for quick reorder and slow-moving items are also reported for fast price reductions
	4. Flexible  promotion strategy.	4.  Cheaper, more detailed, and more frequent reports.	4.  On-going evaluation of a promotional campaign permits reallocation of funds to areas behind target.
TECHNOLOGICAL FACTORS	1.  Forecasting.	1. Automatic translation of terms and classifications between departments.	1. Survey-based forecasts of demand for complex industrial goods can be automatically translated into partsi requirements and production schedules.
	2. Promotional planning and corporate long-range planning	2. Systematic testing of alternative promotional plans and compatibility testing of various divisional plans.	2. Complex simulation models both developed and operated with the help of data bank information can be used for promotional planning by product managers and for strategic planning by top management.
	3. Credit management.	3. Programrned executive decision rules can operate on data bank information.	3. Credit decisions are automatically made as each order is processed.
	4. Purchasing.	4. Detailed  sales reporting permits automation of management decisions.	4. Computer automatically repurchases standard items on the basis of correlation of sales data with programmed decision rules
	.
ECONOMIC FACTORS	1. Advertising strategy	1. Additional manipulation of data is possible when stored for computers in an unaggregated file	1. Sales analysis is possible by new market segment breakdowns.
	2. Bidding strategy	2. Improved storage and retrieval capabilities allows new types of data to be collected and used.	2. Systematic recording of information about past R&D, contract bidding situations allows improved bidding strategies
	3. Evaluation of advertising expenditures	3. Well-designed data banks permit integration and comparison of different sets of data.	3. Advertising expenditures are compared to shipments by county to provide information about advertising effectiveness.

Perhaps the ultimatum in sophistication is a marketing planning system which reviews alternatives, then actually makes decisions and takes action. Thus, several large retailing organizations have developed systems that review sales trends and inventories and then place orders for merchandise. The most advanced unit of this type we have seen is not a marketing system; rather, it buys and sells securities in a stock brokerage house. Still in the future are marketing systems that decide the amount and timing of advertising and price promotions in each of several dozen sales districts.

Conclusion :

Success of a business organization depends on effective marketing plans and their implementation. Marketing information system collects information about customers’ wants, needs, product price, discount, commission, sale condition, possible demand etc. and analyzes and disseminates such information, which is indispensable for making marketing plans and implementing them. So, marketing information system is also very important to make marketing plans and implement them.