What Is Marketing Information System (MIS)? Definition, Components, Functions, Importance.

What Is Marketing Information System (MIS)? Definition, Components, Functions, Importance.

In today's environment, if you want to build a business or improve process and performance, one thing is sure, you'll need "Information" or "Data", whatever you say. If you are able to gather relevant information, organize it, analyze it, and provide that data to decision makers, then friends you have a great chance of improved decision making. And great decision making is the king factor in Modern Business.

And you know?, We are gonna learn exactly that concept, Marketing Information System i.e. MIS. So, let's see the contents of this article.

Contents:

1. What Is Marketing Information System? Meaning & Definition Of MIS.

2. Nature / Characteristics Of Marketing Information System (MIS).

3. Scope Of Marketing Information System (MIS).

4. Importance Of Marketing Information System (MIS).

5. Functions Of Marketing Information System (MIS).

6. Components Of Marketing Information System (MIS).

7. Advantages of Marketing Information System (MIS).

So, let's start with the Meaning & Definition of MIS.

Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Meaning & Definition Of Marketing Information System (MIS).

So, we will look the Definitions first, then we'll discuss the explanation. According to Philip Kotlar, "Marketing information system (MIS) consists of people, equipment and procedures to gather, sort, analyse, evaluate and distribute needed timely and accurate information to marketing decision makers."

As per William stanton, "Marketing information system is an ongoing, organized procedure to generate, analyse, disseminate, store and retrive information for use in making marketing decisions."

In another article about Marketing Research, we learned that it collects Marketing Data from market, to solve marketing problems. If you've not studied then you can click on those coloured words. So, information collected through Marketing Research is vital for the decision making. Above definitions also focusing on gathering, analyzing, evaluating and providing the needed information for effective decision making.

So, in simple words, Marketing Information System (MIS) is a system of mainly three purposes:

• Collection and gathering of relevant data.

• Analyzing & evaluation of the data.

• Providing the evaluated data to decision makers in proper way.

Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Nature / Characteristics of Marketing Information System (MIS). 

1. Needs Cooperation.

Marketing information system needs cooperation from all departments of the organization. It is a system where data is collected from internal environment as well as external environment, and after analyzing the data, it is provided to the decision makers for effective decision making. Therefore, MIS is a cooperative system.

2. Systematically Operated.

In Marketing Information System, organization collects data and aftet systematically editing, tabulating, summarizing, analyzing the data, it is distributed to management. So, it is systematically operated.

3. Provide Information of environment.

Marketing information system starts with the collection of various types of Marketing data, which helps management to take decisions in a particular situation. Those information are related to internal and external environment of the business.

4. Act as a Data bank.

Just like a bank, where you save all your money, information collected by organization should be maintained in a data bank. A data bank is very vital for organization as it provides various information whenever needed. Marketing Information System act as data bank for business organization.

5. Future oriented.

Marketing Information System (MIS) collects and interprets Market information of current period to help management in taking decisions related to future. Accurate decision making is key for future goals achievement. So, MIS is a future oriented concept.

6. Continuous process.

Everything in modern business environment is changing from time to time. Products, consumers, services, technology, business process, methods all are evolving periodically. So, MIS i.e. collecting and analyzing information related to business environment and preparing for better performance in future is a continuous task.

7. Accuracy.

Marketing Information System helps the organization to gather accurate data about the components of Market i.e. internal & external environment. This nature of MIS leads the management towards effective & less risky decision making. 

8. Techniques & tools for analysis.

There are many techniques and tools required in MIS. It takes help from economics (demand, supply, competition, economy), mathematics and statistics to understand and analyze the market data.

9. Mediator between Environment & Management.

For business organizations to be successful, it is essential to regularly keep their eyes on the environment factors like consumers, competitors, trends, dealers, suppliers etc. MIS acts as a mediator which keeps informing management about the environmental changes.

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Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Scope of Marketing Information System (MIS).

1. Strategic planning.

When management prepares strategies for short term or long term goals, they need timely, accurate, reliable knowledge about the market components and factors. MIS provides those collected & analyzed data to decision makers to help them in effective decision making.

2. Strategy implementation.

In the first point we saw MIS helps in strategic planning. In the same way, MIS also helps in implementation of those strategies. Because with the accurate, reliable data bank, management will be able to make the roadmap of how strategies will be implemented.

3. Market analysis.

MIS enables the decision makers to regularly analyze the market, segments in market, new markets etc. They can keep their eyes on the environmental changes like consumer behaviour, competitors activities, new technologies, new processes.

4. Wider applocations (uses).

MIS has wide applications in managing business. It is use in daily operational activities such as tele marketing, direct mailing, per day production etc. MIS is also used in making long term strategies such entering new markets, new projects, mergers & acquisitions etc.

5. Support decision makers.

Decision makers need to have some base to take various decisions related to daily operations, short term plans or long term plans. The base for decisions is reliable, current, accurate data about the matter or problem. Marketing Information System (MIS) gives support to decision makers by providing needed informations on timely basis.

6. Integration of all areas.

MIS helps to integrate all parts of organization as it gathers data from both internal and external environment, which is vital to keep the whole organization in one direction. This integration leads to improved team work and efficiency in performance.

Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Importance of Marketing Information System (MIS).

1. Aids in decision making.

This is the first and most vital point in Importance of Marketing Information System. The main objective of MIS is to provide timely, reliable and accurate data to decision makers for making effective decisions. In today's competition, effective decision making is the key for success.

2. Demand forecasting.

Another importance of MIS is that organization is able to forecast future demand of products or new product. This will aid the management to decide about any modifications in current offerings or bring something new for their target market.

3. Continuous flow of information.

Now you know that good decision making is the key in today's competition, but if there is lack of consistency in decision making, then it can cost you. Because the market environment is changing very fast nowadays. MIS provides needed data continuously which keeps management updated about market changes.

4. Helps to face competition.

We saw in above three points that MIS aids in decision making, forecasts the demand and provides continuous flow of information. All these benefits from MIS leads to overall improvement in whole organization. This helps the company to face the competition.

5. Analyze economic indicators.

Marketing Information System enables management to understand the market environment such as consumers, competitors, dealers & suppliers, government, economy etc. So, management also analyze economic indicators in the country as business environment in the country depends on the GDP, Inflation, employment situation and more indicators.

6. Creativity in Marketing.

MIS encourages creativity in the organization as managers will understand that creativity is vital for successfully positioning products in the mind of consumers. Marketers have to come with new ideas continuously to retain their customers in modern marketing.

7. Helps to evolve with the change.

When management comes to know about the changes in market environment through MIS. They also analyze and find solutions to cope up with those changes. Evolving with the market changes is essential otherwise competitors can grab your target market and put you behind in the race.

8. Customization.

Customer retention is buzz word in the business world today. If you are able to retain new customers, then you are on the track of success. Marketing Information System helps the organization to customize the product according to current consumers perception & need. This leads to customer loyalty and retention.

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Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Functions of Marketing Information System (MIS).

Data Collection about Market.

The first one in the list of functions of MIS is collection of market data. Proper techniques and methods should be used in data collection as the final decisions will be taken according to the data collected. Here, the accuracy and reliability of the data are vital points.

Processing of Data.

After collecting the reliable data, processing of data is the second point. It consists of properly recording, tabulating, editing, summarizing of data. 

Analyzing & Storage.

Now, this is the step which is most vital in MIS. The analyzing of data should be done by the experts of different fields like marketing, sales, promotion. Then, storing the analyzed data is the next step so that it can be provided to management whenever needed.

Evaluating accuracy & reliability.

A review of analyzed data should be done as they will check the whole process again. It is always better to take a look on the accuracy and reliability, so that decision makers get correct and valuable base for market decisions.

Distribution of Data to decision makers.

The final function is to distribute the analyzed data to decision makers whenever they need. This is the ultimate objective if Market Information System. Timely and relevant information supply leads to effective decision making.

Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Components of Marketing Information System (MIS).

1. Internal Database.

Internal database includes all relevant data related to internal environment of business. Information such as accounts, cash flows, human skills, promotion costs, material handling etc. Such information helps the organization to know their strengths and weaknesses.

2. Marketing Intelligence System (External environment).

It is related to the external environment of business. It includes data related to consumer's perception, needs, competitors, suppliers, government policies, technological developments. These kind of information helps the decision makers to understand opportunities and threats from outside of organization.

3. Market Research.

Market research is collection and interpretation of data related to specific market decisions, situations or problems. The findings of market research will help managers to take appropriate actions.

4. Marketing Decision Support System.

Marketing Decision Support System consist of software and hardware for gathering, storing, analyzing marketing data digitally. Today's marketing software programs helps managers in market research design, customer data, budgeting, pricing etc.

Definition of MIS, Nature / Characteristics of MIS, Scope of MIS, Importance of MIS, Functions of MIS, Components of MIS, Advantages of MIS.

Advantages of Marketing Information System (MIS).

1. Effective Decision Making.

The first and most significant advantage of MIS is it helps to take more effective decisions. Because with MIS, managers are equiped with the most dangerous weapon in business world i.e. accurate & reliable information about market.

2. Reduces Marketing Cost.

When management takes effective decisions, it will lead to better performance and growth. MIS provides those valuable information with which the chances of waste efforts goes down, which automatically reduces overall marketing cost.

3. Aids in Evaluation of Performance.

MIS enables management to forecast demand, perceptions and other factors, which helps to set standards for themselves. Demand forecasting helps to understand what standard level of performance is required to achieve the target. So, management will also able to evaluate the performance against the already set standards..

4. Effective Promotion Strategy.

In Marketing Information System, decision makers analyze the internal and external factors, which includes customer's data. They study customer's perception, needs, wants, feedback, satisfaction, which aids to promote products more successfully.

5. SWOT Analysis.

MIS provides data related to business environment, both internal and external. Internal environment study aids to watch the strengths and weaknesses product and strategies. This will help management to focus on strengths and remove weaknesses. On the other hand, external environment study aids to see new opportunities and threats in the market. 

6. Competitive advantage.

When your company does better than competitors in one or more than one areas, its competitive advantage for your product. MIS keeps the management aware about every movement in market. That enables the marketers to be ahead of competitors in one or many ways.

7. Business Growth in long term.

All those benefits given above leads to effective performance, customer satisfaction and higher returns on investment. These enables the managers to think about new product development, new markets, mergers & acquisition etc. MIS provides regular data about developments in the market, which is helpful for managers in decisions related to growth opportunities.

Thank you for reading. I'm pleased to discuss this topic with you. 

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