The market is an environment. Generally customers, competitors, stack holders, government, labor union, supplier and financial institutions etc., are included in this environment. Firms and organizations are living in this environment.
Environment and Process
Michel porter's value chain, is the coin tossed by many solution providers in this environment. Value chain is based on the process view of organizations.
A manufacturing (or service) organization as a system, is made up of subsystems each with inputs, transformation processes and outputs.
Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labor, materials, equipment, buildings, land, administration and management. Primary value chain activities are:
- Marketing and sales
In reality, value chain has a chain of problems in its every operation. These problems can be categorized under structured and unstructured problems. Structured problems can be handled by specific systems. Whereas, the top management usually deals with unstructured problems. But the bridge between structured and unstructured problems, is what is missing.
Decision Support System
Gory and Scott-Morton coined the phrase 'DSS' in 1971. DSS is Decision Support System. A system that provides both, problem solving and communications capabilities, for semi structured problems. This system also helps top management while making important decisions.
In other way, DSS is an interactive, flexible computerized information system that enables managers to obtain and manipulate information, as they are making decisions.
In order to beat the competition, the manager needs to understand the market early. Other than competitive situations, marketing manager needs to analyze company's own sales and performance. This is where 'Marketing Information System', comes into picture.
It is a specific DSS solution for the marketer. MIS also helps to enter, calculate and manipulate marketing and sales data, that are always full of figures and numbers.
To understand MIS is easy, but you should also be aware of marketing flow in reality. Here are some steps to understand this system.
What is Marketing Flow?
Firm lives in a market environment. So firm needs to communicate with the market environment persistently. Market generally communicates through market research or dealer surveys.
Through surveys, firms get information from market, which is nothing but market intelligence. Firms also get internal sale records from accounting departments or sales departments.
MIS helps us to process the data collected from marketing environment and the firm into meaningful output. Let's see how,
Three basic components in MIS
- Accounting Information System: AIS provides periodic reports of sales, special reports of sales, mathematical models and knowledge-based models.
- Market Research System: MRS provides primary and secondary data and information. Primary data is first hand information collected from market (Example: Survey, In-depth interview and Observation), and secondary data is collected from other sources (Example: Statistical departments, Government Agencies, Publications etc.).
- Market Intelligence: It is well-processed and key information about market. It mainly represent economic and business environment.
Key actors for MIS
- Market Environment
To derive some decisions, data should be processed. A model is defined to process data and information. Most common models of MIS:
- Time series sales modes
- Analysis of Variance (ANOVA)
- Linear programming
- Regression and correlation models
- Spreadsheet 'what if' models
- Brand switching models
- Elasticity models (price, incomes, demand, supply, etc.)
- Sensitivity analysis
- Discounted cash flow
What does MIS do?
It is understood that MIS answers semi-structured problems regarding market environment. But it also provides strategies and solution with respect to product, price, promotion and place.
- What is to produce?
- What price is to be charged for a product?
- How to promote your products?
- Where to sale your products?
MIS helps marketer to draw product strategy, pricing strategy, promotion strategy and geographical marketing strategy under different circumstances. Everything is data and information. Everything is stored, processed and can be retrieved.
Firms need excellent IT infrastructure to create MIS. Data warehousing and data mining are crucial requirement under this infrastructure.
Example of MIS
Marketing Pilot is the first integrated marketing information system. It consolidates all of an organization's marketing knowledge, and provides collaborative tools to manage campaigns, events, projects, jobs, media, brands, products, digital assets, documents, collateral, budgets and expenses.
Also enterprise solution providers are always present to provide related solutions. Accenture, CA, Darwin partners, SAP, Oracle, Cognos, Siebel, Baan and SAS are solution providers in similar intelligence mining fields.
System helps you to manage your business effectively. Ultimately an entrepreneur needs to learn from everything. MIS helps the organization with the semi-structured problems.
Tom Landry said, "When you want to win a game, you have to teach. When you lose a game, you have to learn." Thus, everything depends on the marketer, on how fast he learns and unlearns from competitors, market and his own mistakes.