1. There is plenty of information around - but often too much of the wrong kind and not enough if the right kind.
MARKETING INFORMATION SYSTEMS
R.A. Proctor
The Nature of Marketing • There is not enough information of the right
Marketing management is about finding ways of kind.
satisfying customer wants and needs, while • Information is too dispersed to be useful.
achieving organizational objectives or • Information arrives too late to be useful.
requirements in terms of profit or some other • Information often arrives in a form that leaves
measure of corporate performance. It brings no idea of its accuracy and therefore lacks
together all customer-impinging resources, such as credibility.
product design and specification, advertising and
other forms of promotion, pricing policy, selling, Clearly, there is a need to overcome these kinds of
channels of distribution and physical distribution to problems and complaints and it is for this reason
achieve this end. These customer-impinging that marketing information systems have evolved.
resources are often summarized under four
headings and referred to as the four Ps of the
marketing mix (price, promotion, place and Marketing Information Systems
product). The art or science of marketing The concept of marketing information systems has
management is concerned with making been around for many years. Early systems were
decisions/policies with respect to the elements of paper-based systems but, with the emergence of
the' marketing mix such that the company's computers with large storage capacities and later
interface with its markets is both profitable and microcomputers with similar features, marketing
customer satisfying. information systems have become more
"electronic" in nature. MIS (marketing information
The Need for Marketing Information systems) can be classified under five headings:
managers require information to help them forecast
changes in product demand, increase selling • Planning systems - which provide information
Productivity, and exercise control over sales and on sales, costs and competitive activity,
distribution expenses. Marketing is an ongoing together with any kind of information which is
process; decisions are made and results of these needed to formulate plans.
decisions have he monitored. Consumer and
competitor reactions to the company's decisions • Control systems - these provide continuous
have to be studied to ensure that the best strategy is monitoring of marketing activities and enable
being employed. Information on these matters is marketing executives to identify problems and
used to correct deviations from plans. For example, opportunities in the marketplace. At the same
if a target of a 5 per cent increase in new clients time, they permit a more detailed and
has been set for the salesforce then it is necessary comprehensive review of performance against
to monitor how effective the salesforce is in terms plans.
of reaching the target set. Such information can • Marketing research systems - such systems
then be used to adjust targets, if the need arises. allow executives to test decision rules and
cause/effect hypotheses. This permits the
Information is needed for decision making. assessment of the effects of marketing actions
Unfortunately, in many firms, it is often difficult to and encourages improved learning from
obtain information of the right kind. The kinds of experience.
complaints one often encounters are [1]:
• Monitoring systems - these systems provide
• There is too much information of the wrong management with information concerning the
kind. external environment in which they are
operating.

2. One can define a marketing information system as • Planning, analyzing and evaluating sales
one which scans and collects data from the activities.
environment, makes use of data from transactions
and operations within the firm and then filters, • Market measurement and sales forecasting.
organizes and selects data before presenting them • Quantitative aspects of market research.
as information to management.
The firm indicated that the system had not
Marketing Information Systems in currently been designed to plan, monitor or control
the United Kingdom the promotional activities of the firm, although it
Many firms in the UK are starting to develop indicated that this might be included at a later date.
computer-based marketing information systems. A My subsequent visit to the firm proved rather
survey by Martech Ltd [2] of UK firms found that, fruitless since, although it was working on the
in the companies they surveyed, computerization development of a system, it was not keen to
had grown very rapidly over the previous two discuss progress in any detail.
years with penetration increasing from 15 per cent
to about 50 per cent - that is, 70 per cent of the Firm number two was developing a marketing
systems mentioned in the survey had been information system too. I saw little evidence of it
implemented in the previous two years. Martech when I visited the firm.
also noted that most of the growth had been
concentrated on fragmented solutions to tackle a Firm number three indicated that it had a
particular element of the marketing/sales function marketing information system in operation. When I
with a particular emphasis on salesforce visited the firm I found there was some use of
productivity. Few companies had moved beyond decision support systems. I found a microcomputer
the isolated productivity tool stage towards being used for project management planning. The
integrated marketing information systems covering package in use was being applied specifically in
customer service, account management, product connection with new development and made use of
management, forecasting, sales management, PERT analysis. At the time of the visit, the people
advertising and promotion, distribution, pricing, concerned were still learning to use the package.
competitive tracking or marketing research. There was also a relatively sophisticated
forecasting package in use. This was again
Recently, the writer contacted 20 medium- to microcomputer based and was employed to
large-sized firms, based north of Birmingham, to forecast demand for existing product lines. There
enquire as to the state of their marketing was also a "home-made" microcomputer-based
information systems. Only six firms responded to database system, written in BASIC, in which was
the request for information and a visit was kept all the data on product prices, discounts,
arranged to three of them to discuss the nature of customer records etc. The company also had a
their marketing information systems. mainframe-based system which was connected
remotely to a PC in each one of a number of
The first of the six firms indicated that a system distributor outlets. Every night the system was able
has currently being designed by the marketing to scan the records held on the PCs and the
department and that it would be capable of following morning produce a report for top
handling the following tasks: management on the sales of the previous day at the
distributor outlets. Unfortunately, the system was
• Setting prices and evaluating different pricing only partially complete at the time of my visit.
strategies.
• Monitoring and evaluating new product-
market opportunities.
COMPUTERIZED MIS IN THE UK
ARE STILL IN THE EARLY
• Evaluating the optimality of the current
product-market portfolio.
STAGES OF DEVELOPMENT
• Analyzing customer accounts. I was unable to visit the three other firms but they
did provide me with data on the state of their

3. marketing information systems. Firm number four Central to a marketing information system is the
indicated that it was using microcomputers in a concept a database. There may be one or more
number of different art' s of marketing activity. databases present in such a system. The
The firm was in the retailing business and had determination of this is a technical matter and it is
modelled store sales so as to be able to estimate difficult to state any hard and fast rules on this
new site potential. It was also using lap-top point. The various boxes in the diagram show the
computers in stores for survey interviews with kind of information required by executives in the
customers. course of conducting marketing activities.
Information is required about the market and its
Firm number five was actively into database
various characteristics. Clearly, the kind of
marketing. Its database was used for:
information held in the database should reflect how
• Analyzing customer accounts: customers were a firm segments its market. Indeed, many firms
graded by size and credit-worthiness and supply goods and services to more than one market
recorded geographically in the database. SIC so that the database will have to be organized in
code and employee size were also shown. such a way that the individual markets can readily
Customers were analyzed by product use and be identified. Different methods of segmenting the
this was used to target them with relevant market may be employed for different products so
mailshots. that this too has to be taken into account.
Quantitative information relating to the number of
• Planning, analyzing and evaluating sales population members who have the various
activities: leads that were generated through characteristics used as a basis for segmentation is
direct marketing activity were allocated by also kept in the database. Not only does current
computer to the appropriate salesman. The quantitative information have to be held in the
result of each enquiry was monitored and database but so also do past data. Without a
analyzed by product and sales area. This, the substantial number of years' data it is difficult to
firm felt, enabled it to evaluate the success of forecast changes in the future.
its salesforce and that of campaigns.
• Promotional activities: all enquiries/leads Figure 1. Schema for a Marketing Information System
generated by advertising, PR, direct mail and
Market
telemarketing were analyzed to determine Segment characteristics
Geographic, psychographic, etc.
revenue, cost per sale, and cost per enquiry.
Competition Prospects and clients
Firm number six indicated that, at the time, it did Strengths Details of wants and needs
not have a marketing information system, as such. Strategies
Shortcomings Contacts made,
opportunties identified
Whilst the sample of firms here is tiny it seems to Marketing research
Analysis Models
support the findings of the Martech survey that, by Tools Forecasts
Pricing
Marketing mix
Promotion
and large, computerized marketing information Product Place
systems in the UK are still in the early stages of
development. Marketing analysis and control
Marketing plans
Volume. profit, sales targets
Opportunities
Marketing effort
Performance against plans
A Schema for Marketing Information
Systems
Marketing environment
Figure 1 shows a schema for an integrated Economic, legal, cultural, technological Monitoring system
marketing information system. The arrows indicate
the flow of information between different
Closely related to the information held on the
components. Developing such an information
market itself is information held on competition
system can take place piecemeal, and the system
and on prospects and clients. In the case of
will not necessarily become integrated until all the
competition, it is important to have information on
components are in place and it is possible to pass
sales/market share and profitability of products by
information between the component parts with the
market segment. It is also useful to hold data on
minimum of effort.
what competitors commit in the way of resources

4. to products - classified by market segment. Armed various dimensions. These include sales
with this information a firm can then analyze the performance m unit terms, as well as in money
data in the database and assess strengths and terms; ROI and contribution to profit and overhead
shortcomings of a competitor's product-market of individual products. They also include
portfolio. Information about competitive strategy is profitability of different market segments;
more difficult to obtain. However, much can be information on achieved levels of distribution;
learned from studying the quantitative data present effectiveness of advertising campaigns etc. The
in the database and, if historical data are kept, results of market analysis in identifying
these can help to illuminate competitive strategy in opportunities in the marketplace may also be
an objective manner. placed here.
ONE NEEDS TO KEEP A THERE IS ALWAYS A DANGER
COMPLETE LISTING OF ALL THAT TOO MUCH INFORMATION
PROSPECTS AND ALL CLIENTS MAY BE ENTERED
In the case of prospects and clients one needs to The marketing research part of the marketing
keep a complete listing of all prospects and all information system contains various models and
clients, noting any purchases or purchase other analytical tools. The analytical tools have
intentions they have. This information may be access to data which are contained in any part of
obtained from both on-the-ground salespeople, the database. Thus, it is possible to use these tools
salespeople in the order office and from any other to compare marketing plans with what has in fact
person in the organization who is able to provide been achieved, or it is possible to analyze
such information. Any special requirements or competitors' performance in relationship to the
unfulfilled wants and needs should be recorded firm's performance.
together with information regarding contacts made
with actual or potential customers. The monitoring system looks at what is going on in
the external environment. In particular it focuses
The marketing mix part of the information system
on economic, legal, cultural and technological
database contains information on pricing, products,
developments which have a bearing on the
promotions and distribution strategies and policies
business. Such data need careful filtering to ensure
both past and present together with current and
that executives are not overloaded with
previous evaluations of how different market
information or presented with irrelevant
segments respond to changes in these variables.
information.
The marketing plans part of the information system
database contains the current rolling marketing Tools of analysis
plan complete with the sales forecast and volume, The surveys above underlined the absence of fully
profit and sales targets by products and market integrated marketing information systems.
segment. However; partial information systems or decision-
The data held in the marketing environment support systems are needed when it comes to
database relate to economic, legal, cultural and looking at marketing information handling and
technological data. Much of the information will analysis. A database package and spreadsheets,
be qualitative and descriptive in nature and will together with free standing linear programming
tend to be used to aid judgment and decision packages, elementary statistics packages, a
making alongside quantitative analyses provided forecasting tool and a project management tool
by the marketing analysis and control part of the (PERT) are likely to be the main tools of analysis.
information system. However, there are obviously many opportunities
for developing and using a wide range of purpose-
The marketing analysis and control part of the built decision-support aids.
marketing information system contains the
"performance database" which provides
Using a Marketing Information
information on what the firm has achieved along
System

5. As we have seen above there are two basic. the sources of data. An important source of data is
ingredients to a marketing information system. On the internal accounting system of the company.
the one hand, there is a database or a number of This system reports orders, sales, stocks, debtors
databases containing a variety of data about the and creditors etc., and enables management to
firm, its competitors, its markets and the compare actual and expected levels of
environment. On the other hand, there is the performance. It also enables management to spot
provision of a wide variety of analytical tools opportunities and problems. The sales
capable of exploring the data and turning it into order/invoicing system is the kernel of such a
meaningful information for management. system. Often this is computerized and information
can be made directly available to the marketing
When designing a marketing information system a information system without any difficulty.
number of important questions need to be
answered in the first place. These are: Competitive information and information on
customers' wants and needs can be gleaned from
(1) Exactly how much information will be entered salespeople's reports. Reports, of course, need to
in the database? be filed into the information system in electronic
(2) What information will be entered into the form. This requires that either the sales staff have
database? to do this themselves or, alternatively, someone
(3) How will it be entered into the database? else has to scan all sales reports and abstract
(4) How will it be manipulated once it is in the information to put into the computerised system.
database? The former method is decidedly more attractive
(5) To whom will reports be sent? but it calls for the design of electronic forms which
can easily be completed by sales staff. Sales
The question of how much information is reports tend to be filled in at home at weekends or
extremely important. There is always a danger that in hotel bedrooms during the working week. A
too much information may be entered. This will portable laptop computer directly connected via a
only serve to overload management's information modem link with the firm's mainframe computer
processing abilities. In addition, any data or provides an attractive solution to the problem.
information which is not used by management is Alternatively, floppy disk files handed in weekly to
clearly redundant and will be taking up valuable the computer support staff in the company could
storage space in the information system. From time provide an adequate method
to time it is necessary to review the information
available in the information system and to remove
any that is not being used. DATA SHOULD BE KEPT IN A
DISAGGREGATED FORM IN THE
AN IMPORTANT SOURCE OF DATABASE
DATA IS THE INTERNAL
ACCOUNTING SYSTEM Data on the environment and competitive activity
can often bought from consultants and marketing
Closely allied to the question of how much research agencies in an electronic form.
information to enter is the question of what
information should be entered. In order to be able Data should as far as possible be kept in a
to answer this question i~ ~ is important that the disaggregated form in the database. This allows
designer of the system carefully addresses the anyone to manipulate and analyse the data to suit
matter beforehand with people who will use the their own particular purposes. Summary statistical
system. In addition, periodic reviews need to be f~' analyses of data may well be kept in a separate file
taken alter the system has been implemented to within the database, if it is felt that it is information
make sure that the system is still providing user which people may want frequently.
satisfaction.
Having a computer-based information system
The question of how the data will be entered is means that information in the form of reports can
linked to who will enter the data and what will be be made available quickly to management.

6. software and large relational databases help advise
Sales management requires information to help it users on which segments to target. Marketing
allocate the salesforce effectively and assess the research can tell management how to price a
performance of sales staff equitably. Sales staff, product, which distribution channels to use and
too, should be able to access the system easily and how to get more out of advertising and other
get support and information about such things as: promotional expenditure.
Outputs of the marketing information system can
• The quantity of the product on hand.
take the form of reports. Example reports might be:
• Prices and price discounts.
• A new product report, comprising an
• Status information on invoices, time of estimation of sales potential and customer
delivery and back orders. buying habits and motives.
• Delivery dates. • A pricing strategy report to help management
reach pricing objectives.
• Complete product specifications.
• A product-mix report to advise management
The system should also aid the process of entering on how to manage the product mix to best
orders and reduce the salesperson's paperwork (see advantage - e.g. by changing the number of
above: using a lap-top portable computer). lines or the depth within a line or simply
pruning or simplifying lines.
For control purposes sales performance analysis is
• A product life cycle report to help marketers
required. This amounts to a detailed study of the
manage the product through its various stages
total sales revenue of a company over a specific
in the life cycle and possibly anticipate
period of time. An analysis is made of total sales
marketing requirements at a subsequent stage.
volume by product line, by salesperson, by
territory and by customer groups. These sales are • An advertising effectiveness report to help
then compared with company goals and industry assess who is the target audience, what to
sales. communicate, when to communicate and what
media to use.
• A customer analysis report to spotlight
WE CAN EXPECT TO SEE customer trends, complaints and requests and a
CONSIDERABLE complete breakdown of profitability by
DEVELOPMENTS IN THE NEXT customer.
FEW YEARS • An order-processing control report to allocate
stock to fill customer orders, process back
Forecasting is the estimation of the market size and orders, answer order status enquiries, product
the company's share of that market. Marketing shipping reports by invoice and produce
budgets, sales strategies and sales quotas are freight and labour costs.
influenced by these estimates. The forecasts also
help the planning and control of manufacturing, Reports may be produced on a regular basis, as
distribution management and advertising and defined by the users of the system.
promotion as they are reflected through the
budgeting process. Information on sales
profitability is also made available. This shows the Conclusion
relative profitability of customers, territories, Computerised marketing information systems in
product lines, etc. many UK firms are largely in their infancy.
However, with rapidly growing usage of
Marketing research/intelligence helps to define mainframe, minicomputers and microcomputers
marketing problems. It also helps executives find we can expect to see considerable developments in
new customers and to adapt products to meet this area in the next few years. There is a good deal
changing customer requirements. User-friendly to be done by many companies to improve their

7. marketing information systems. To achieve this
firms need help and assistance in choosing a
system which best meets their own particular need.
Obtaining a system is not by itself the solution to
the problem, however. Employees need to be
trained both how to use the system and how to
operate it.
Many universities, polytechnics and colleges are
now running information technology modules as
part of the curricula in business and management
courses. This underlines the growing importance of
the subject area. Much more attention in business,
however; has to be given to the need to implement
information systems in the area of marketing.
References
(1) Kotler, P. and Lilien, G., Marketing Decision
Making: A Model Building Approach, Harper
and Row, 1983.
(2) "The Martech Survey into Marketing
Information Systems", Martech Information
Systems, West Africa House, Ashbourne Rd,
London W5 3QR, June 1989.
R.A. Proctor teaches in the Department of Economics
and Management Science, University of Keele, UK.
Source Management Decision, Vol. 29, No. 4,1991.
pp. 55-60. ©MCB University Press Limited. 0025-1747