Name: GERVACIO, RONALD P.

Year & Course: 1 - MBA

1. What are the components of a modern marketing information system?

Marketing Information System (MIS) collects, analyses, and supplies a lot of relevant information
to the marketing managers. It is a valuable tool for planning, implementing and controlling the
marketing activities.

The role of MIS is to identify (find out) what sort of information is required by the marketing
managers. It then collects and analyzes the information. It supplies this information to the
marketing manager at the right time. MIS collects the information through its subsystems. These
subsystems are called components.

The four main components of Marketing Information System (MIS) are:

 Internal Records,
 Marketing Intelligence,
 Marketing Research (MR), and
 Marketing Decision Support System.

2. What are useful internal records?

Marketing managers rely on internal reports on orders, sales, prices, costs, inventory levels,
receivables, payables, and so on. By analyzing this information, they can spot important
opportunities and problems.

The Order-to-Payment Cycle

The heart of the internal records system is the order-to-payment cycle. Sales representatives,
dealers, and customers send orders to the firm. The sales department prepares invoices and
transmits copies to various departments. Out-of-stock items are back ordered. Shipped items
are accompanied by shipping and billing documents that are sent to various departments.

Today, companies need to perform these steps quickly and accurately. Customers favor firms
that can promise timely delivery. Customers and sales representatives fax or e-mail their
orders. Computerized warehouses quickly fill these orders and dispatch he goods direct to the
customer. Because of computerization and Internet the warehouses as far as possible are closer
to the plants. This helps to keep lower inventories in the supply chain.

The billing department sends out invoices as quickly as possible. An increasing number of
companies are using the Internet and extranets to improve the speed, accuracy, and efficiency
of the order-to-payment cycle.

Sales Information System

Marketing managers need timely and accurate reports on currents sales. Wal-Mart, for
example, knows the sales of each product by store and total each evening. This enables it to
transmit nightly orders to suppliers for new shipments of replacement stock. Wal-Mart shares
its sales data with its larger suppliers such as P&G and expects P&G to re-supply Wal-Mart
stores in a timely manner. Wal-Mart has entrusted P&G with the management of its inventory.

Companies must carefully interpret the sales data so as not to get the wrong signals.

Technological gadgets are revolutionizing sales information systems and allowing

representatives to have up-to-the-second information. In visiting one of the 10,000 golf shops
around the country, sales reps for Taylor Made used to spend up to two hours counting golf
clubs in stock before filling new orders by hand. Since the company gave its reps handheld
devices with bar-code readers and Internet connections, the reps now simply point their
handhelds at the bar codes and automatically tally inventory. By using the two hours they save
to focus on boosting sales to retail customers, sales reps improved productivity by 20%.

Databases, Data Warehousing, and Data Mining

Today companies organize their information in database customer database, product database,
salesperson database and then combine data from the different databases. The customer
database will contain every customer name, addresses, past transactions, and even
demographics and psychographics (activities, interests, and opinions) in some instances.
Instead of a company sending a mass carpet bombing mailing of a new offer to every customer
in its database, it will score the different customers according to recent purchases, frequency
and monetary value. It will send the offer only to the highest scoring customers. Besides saving
on mailing expenses, this will often achieve a double-digit response rate.
 Pizza Hut claims to have the largest fast-food customer data warehouses in the world, with 40
million us households or between 40 to 50 % of the US Market. The millions of customer
records are gleaned from point-of-sale transactions at its restaurants. Pizza Hut can slice and
dice data by favorite toppings, date of the last order, or by whether you order a salad with your
pepperoni pizza. Pizza Hut has not only been able to purge expensive duplicates from its direct-
mail campaigns, but can also target its marketing to find the best coupon offers for each
household and predict the success of campaigns.

Companies warehouse this data and make them easily accessible to decision makers.
Furthermore, by hiring analysts skilled in sophisticated statistical methods, they can mine the
data and garner fresh insights into neglected customer segments, recent customer trends, and
other useful information. The customer information can be cross-tabbed with product and
salesperson information to yield still deeper insights. To manage all the different databases
efficiently and effectively, more firms are using business integration software

Using its own-in-house technology, Wells Fargo has developed the ability to track and analyze
every bank transaction made by its 10 million retail customers whether at ATMs, bank
branches, or online. When transaction data are combined with personal information provided
by customers, Well Fargo can come up with targeted offerings to coincide with a customer
life-changing event.

We can conclude the advances in information technology and innovation in marketing systems
is boosting the ability of marketing managers giving them an opportunity to react much faster
to their customer needs and end up with closing the sale successfully and customer satisfaction.
Today the market information is sought in seconds. Gone are the days when the marketing
manager had o wait for weekly reports of his local rep. The faster information is leading to a
lesser inventory burden on supply chain and consequently the inventory carrying costs.
3. What is involved in a marketing intelligence system?
Market intelligence is defined as the information or data that is derived by an organization
from the market it operates in or wants to operate in, to help determine market segmentation,
market penetration, market opportunity, and existing market metrics. Market intelligence is a
vital aspect to understand the state of the market, as well as helps collect competitor
intelligence which in turn aids towards becoming profitable.

For example, A company wants to understand who is the right target audience for a mobile
phone they are launching soon. A profile survey can help the company to shortlist its target
audience based on the type of mobile device they are launching. For instance, if the colors of
 the phone are bold and its features are set in a manner to market it as a gaming mobile device,
a survey will shortlist participants who prefer gaming, are in a younger age group and people
who fall in a specific income range. Such information helps the company to focus its efforts
on the right people thus saving costs and efforts.

Market intelligence, however, is not the same as business intelligence. Whilst business
intelligence focuses on mostly internal factors such as billing rates, headcount, processes etc.,
market intelligence gathers data externally providing you a holistic view of the entire market
and not just your organization. However, incorporating market intelligence with business
intelligence processes will enable a company to have a holistic view of the ongoing corporate
performance in specific market conditions.
While market research is a vast topic and can be gathered through various quantitative or
qualitative methods, most companies prefer the following basic methodologies to collect
market intelligence.

DATA COLLECTION

Some basic data collection methodologies for Market intelligence are as follows:

 Surveys
Survey research involves a set of questions put together in a concise manner to gather
data from the target market and analyze the same to create valuable market intelligence. The
larger the group of people, the more reliable are the results. There are various methods in which
surveys can be conducted depending on what information needs to be collected.

 Online Surveys
These are the best and one of the most economical methods to get data in a swift manner.
Such surveys have been associated with unreliable data, but with newer tools coming into the
market, this method has become very popular and reliable, to get real-time data fast.
Furthermore, the majority of the target audience already prefers online communication, hence
online surveys are the best method to gather market intelligence. For example, A mobile
company wants to understand the competitor’s position in the market to launch its own product
in the same segment. A competitor analysis survey can be conducted to understand the
competitor’s position in the market, their product features, and their market share. Such
information will enable the company to decide the right audience, the features, and the correct
pricing to capture higher market share.
  In-Person Surveys
These surveys are one to one interviews which can be conducted in high traffic locations
such as malls to gather required information. This also allows you to gather customer feedback
as you have the advantage of showcasing a product or comparing products and gather valuable
information. Such a method has high response rates, however, it is quite expensive as a skilled
person is needed at every location with an appropriate device such as a tablet which tends to be
costly. For example, A FMCG company wants to launch a new product in the market for women.
In-person surveys can be conducted in malls to understand the trend for particular cosmetic
products and preference of its target audience. Accordingly, the product can be modified and
launched in the market to have a direct impact on the demand of the audience.

 Telephone Surveys
These surveys are comparatively less expensive as compared to in-person surveys but are
costlier than mail surveys. Although, a number of companies use telemarketing and hence the
consumer does not respond well due to constant badgering. Therefore, it gets very difficult to
convince the consumer to take the survey, thus reducing response rates, as well as the quality of
responses. For example, businesses need to understand public opinion about specific products,
for instance – laptops. A telephone survey can be conducted with a set of questions that include
product features, brand preference, price comfort, and many more, which can help the company
to launch the right kind of product in the market.

 Mail Surveys
These are one of the cheapest ways to conduct surveys, especially to a larger audience. Since
the advancement in technology, people have stopped reading paper mails nowadays and hence
the response rates for such a method is only 3-15%. However, in areas where technology is still
inaccessible, such method is still dominant to gather required information from the audience.

 Questionnaires
A questionnaire is a series of questions asked in a printed or online format to conduct
research. They can be used for qualitative as well as quantitative research and can be used to
gather data from a large set of audience.
 Polls – Polls are somewhat like surveys, however, in such a method there is only one
question to answer. Since it takes very less time to answer these, the response rate is
extremely high.
 Forms – Forms are a set of questions asked by a researcher to collect very specific
information required for the task at hand. Such a method does not include questions
that will state opinions or feedbacks from the respondent.
 Focus groups – Focus groups are a set of people selected carefully to represent a
target market. Using focus group surveys, a company can evaluate customer demands
and opinions or even take feedback from the group. This enables to collect
information that can be helpful to a company to penetrate that market or to launch a
new product in an existing market. Usually, a moderator is required to ask the
question to a set of people where a discussion unveils insights into that topic.
However, focus group surveys can now be done online as well thus eliminating the
need for a moderator. For example, A focus group is asked about their opinions to
understand what would be the most ideal phone for them. A discussion amongst them
will give the company information as to what dimension is most preferred in the
market and what are the reasons. Reasons such as particular features of the product,
screen size, the color of the phone, the speed of the operating system, pricing, etc. can
give the company insights in which particular area they need to invest more and
accordingly use this intelligence to capture higher market share.
 Personal Interviews – Interviews are generally an expensive affair but provide
valuable, reliable information. Such a method is used to understand in-depth about a
particular topic or a product. They are unstructured open-ended questionnaires and
can last to an hour. However, since they are done on an individual basis, such a
method is not preferred to gather market information, as it will not represent the
market as a whole. Although, interviews with subject matter experts can give you an
understanding of the market trends in a particular industry if you are not well
acquainted with such industry information. For example, A company wants to
understand what are the current technological trends in the market. An interview with
a subject matter expert in technological solutions can give a company valuable
information as to what is trending and what can be expected in the near future.
Accordingly, strategic business decisions can be taken to invest in the right direction.
 Observation – Sometimes the data gathered through other types will not give you
reliable data or won’t give you insights about the customer attitudes or buying
behavior. In such a case the observation method provides you with information such
as habits of the customer, buying patterns, customer preferences such as quality or
price, etc. Understanding this information will enable a company to sell better and
make changes in their products according to the demand. For example, Brands have
cameras fitted in their stores, which are continuously recording and viewed later to
 understand the behavior of their consumers. Using this observation, a company can
hack into unconscious buying behaviors or attitudes of the target market.

 Field trials – Field trials are like conducting experiments in real time. It involves
placing a product in specific stores to understand customer response to the new
product. It can be called a pilot run to test the product in the market. For example, A
chocolate company wants to test a new product they want to launch. Hence a few
select stores are provided with these chocolates to be tested with their target
customers. These customers have to represent the target market and hence their
feedback will enable the company to understand if the product will work in the
market or not.

ANALYSIS

Information is different from intelligence. Information is not useful until it has some meaning
to it. Information is nothing but knowledge about a particular topic or product, while
intelligence is about meaningful information which can be used to take action. In order to
transform collected data to meaningful intelligence, analysis has to be performed on the
collected data. There are various market intelligence software in the market. Such software
not only allows you to collect data but also analyze the data using advanced analytical
methods. Analyzing the information collected helps you transform it to valuable market
intelligence thus enabling a company to understand target market opinions, trends,
competition and where improvements or modifications are needed. Advanced analytical
techniques such as Conjoint analysis, Maxdiff analysis, Gap analysis, Trend analysis, Text
and Sentiment analysis allow a company to understand the market accurately which aid them
to make strategic business decisions.

For example, it is important for a company to monitor the market on an ongoing basis. By
analyzing and monitoring the trends, measuring customer satisfaction scores and Net
promoter scores, a company can stay competitive and manage to increase the market shares,
its revenues and also retain its customers. If needed, accordingly decisions can be taken to
change or modify the product on the basis of the current trends or the situation.

REPORTS AND PRESENTATION

Reports and presentation are an important step in using market intelligence. Reports and
visual infographics will enable a company to understand the markets in an easier manner and
 can answer questions like what do the metrics mean? Wrong interpretation of such data can
be hazardous for the company, hence this step plays a vital role in the market intelligence
process. The entire market intelligence process has now become much easier using reliable
and powerful market intelligence software. Thus using market intelligence effectively can
enable a company to penetrate a market successfully and effectively, determine market
segmentation, understand the competition and understand the market as a whole
4. What are the key methods for tracking and identifying opportunities in the macro
environment?
One method used to analyze trends in the macro environment is the PEST (political, economic,
social, technological) analysis. Some variations of the PEST analysis method add additional
categories for the legal and ecological environments, and may be referred to by other acronyms
such as STEEP or PESTEL.

Bounsoussan and Fleisher (2012) recommend the following process: begin by defining the
environmental boundaries in terms of: breadth (topical coverage), depth (level of detail), and
forecasting horizon (short, medium, or long timeframe) based on the organization's current
strategic plan, geographic reach, and product or service scope.

Identify key events and trends within each segment. How have they involved? What is the rate of
change? How do they impact the organization (negative, positive, or neutral)? Provide evidence.
 Understand how the various trends relate to each other.
 Identify the trends likely to have the greatest impact on the organization.
 Forecast the future direction of these trends, including multiple projections or scenarios.
 Derive implications, focusing on structural forces within the industry which will affect
future strategies.
5. What are some important macro environment developments?
A company is not alone in doing business. It is surrounded by and operates in a larger
context. This context is called the Macro Environment. It consists of all the forces that
shape opportunities, but also pose threats to the company, or the industry it represents.
The Macro Environment consists of 6 different forces:
Demographic, Economic, Political, Ecological, Socio-Cultural, and Technological forces.
This can easily be remembered: the DESTEP model, also called DEPEST model, helps
to consider the different factors of the Macro Environment:

1. Demographic Forces in the Macro Environment

Demographic forces relate changes in human populations. This includes population size,
density, age, gender, occupation and other statistics. Why are people important? Because, on
the whole, their needs is the reason for businesses to exist. In other words, people are the
driving force for the development of an industry. The large and diverse demographic
considerations and changes offer both opportunities and challenges for businesses. Especially
in times of rapid world population growth and overall demographic changes, the study of
people is crucial for business leaders. Changing demographics mean changing markets and
changing markets mean a need for adjusted business strategies. Some of the most important
demographic trends that affect industry are population growth, changing age structure,
changing family structures and geographic shifts in population.

2. Economic forces in the Macro Environment

The Economic forces relate to factors that affect consumer purchasing power and spending
patterns. Business leaders should maintain awareness of such economic forces as economic
growth or decline, tax regulations, unemployment rates, inflation rates, measures of
disposable personal income, and consumer spending patterns.

3. Socio-Cultural forces in the Macro Environment

The Socio-Cultural forces link to factors that affect society’s basic values, preferences and
behavior. The basis for these factors is formed by the fact that people are part of a society and
cultural group that shape their beliefs and values. Many cultural blunders occur due to the
failure of businesses in understanding new, different and/or changing cultural norms. For
instance, appearance, actions, words, symbols or terminology may carry a positive or negative
meaning depending on culture.

4. Technological forces in the Macro Environment

Technological forces form a crucial influence in the Macro Environment. They relate to
factors that create new technologies and thereby create new products and market
opportunities or threats. Obvious technological developments include wireless
communication and business techniques, smartphone applications, etc. This may mean the
emergence of opportunities for a business, but watch out: every new technology replaces an
older one. Thus, business leaders must watch the technological environment closely and
adapt in order to keep up. Otherwise, the products or services will soon be outdated, and the
company will miss new product and market opportunities.

5. Ecological forces in the Macro Environment

Ecological, or natural forces in the Macro Environment are important since they impact the
natural resources which are needed as inputs for business or for an economy at large. Also,
environmental concerns have grown strongly in recent years, which makes the ecological
force a crucial factor to consider. For instance, world, air and water pollution are headlines
every marketer should be aware of. In other words, you should keep track of the trends in the
ecological environment.

Important trends in the ecological environment are the growing shortage of raw materials and
the care for renewable resources. In addition, increased pollution, but also increased
intervention of government in natural resource management is an issue.
Because of all these concerns and the increased involvement of society in ecological issues,
companies more than ever before need to consider and implement environmentally conscious
practices in response to consumer demands for environmentally friendly and responsible
products.

6. Political forces in the Macro Environment

Every business is impacted by the political environment. This involves laws, government
agencies and political action groups. These forces influence and restrict organizations and
individuals in a society. Therefore, business decisions are strongly influenced and affected by
developments in the political environment. Business leaders should maintain awareness of
the legal and political environment. How might a given legislation affect their industry in
general and/or their business in particular? What regulations do need to be most aware of?
What regulations might limit the company’s ability to be successful, vs. which would
maximize opportunities? For example, laws covering issues such as environmental
protection, product safety regulations, competition, pricing etc. might
require a business or industry to adapt strategies to the new political landscape.
As we have seen, a business, and the industry it represents, is surrounded by a complex
environment. The Macro Environment consists of a large variety of different forces. All of
these may shape opportunities for the company, but could also pose threats. It is of critical
importance that business leaders understand and have an eye on developments in the Macro
Environment, to help their business and industry succeed in the long term.

REFERENCES:
https://kalyan-city.blogspot.com/2013/01/4-main-components-of-marketing.html
https://www.questionpro.com/blog/market-intelligence/
https://researchguides.library.brocku.ca/external-analysis/macro-environment
https://irp-cdn.multiscreensite.com/6e5efd05/files/uploaded/DESTEP%20Model%20-
%20The%20Macro%20Environment.pdf