BCM 4257-1. NOTES TO STUDENTS UNDERTAKING BUSINESS COURSES

Marketing Information System

1. BCM 4257-1: MARKETING INFORMATION SYSTEMS
-Definition
A marketing information system (MIS) is a set of procedures and methods
used to gather, analyze, and interpret information related to marketing
decisions. It is a computer-based system that collects data from various
sources, such as internal records, surveys, and external databases, and
transforms it into actionable insights for marketing managers.
For example, let's say a company wants to launch a new product. They can use
a marketing information system to gather data on customer needs and
preferences, analyze competitor offerings, and evaluate market trends. With
this information, they can develop a targeted marketing plan, including
product positioning, pricing, and promotion.

A marketing information system may be helpful in a variety of different
marketing choices, including the following categories of decisions:
• Control choices: The choices about corrective measures that mid-level
marketing managers make based on deviations from strategic plans that
higher-level marketing managers execute.
• Operational decisions: decisions on the day-to-day activities of
marketing professionals, particularly those regarding the completion of
specific tasks.
• Strategic decisions: Refers to those decisions made at a high level by
marketing managers and concern issues relevant to the whole business,
such as policies, goals, and structures of the firm.

Sources of Marketing Information
There are many sources of marketing information, including:
1. Internal data: Information that is generated within a company, such as
sales data, customer data, and financial data.
2. Market research: Systematically gathering, recording, and analysing
data about a specific market or customer group.

2. 3. Social media: Online platforms like Twitter, Facebook, and Instagram,
which can provide real-time insights into customer sentiment and
behavior.
4. Customer feedback: Comments, reviews, and complaints from
customers, which can provide valuable insights into customer
preferences and needs.
5. Competitor analysis: Evaluation of competitor activities, including
their products, marketing strategies, and customer engagement.
Marketing Information System Components
Marketing information systems enhance marketing efforts and impact
decision-making by combining multiple data gathering, processing, analysis,
and reporting capabilities. Marketing information system components
include:
• internal reports
• marketing decision support systems (MKDSS)
• marketing intelligence
• marketing research
Internal Data
The information gathered within the firm is included in internal reports or
records. This data may give you valuable insights, particularly about a
company's skills, accomplishments, and potential for progress. The following
are some examples of data that companies may include in internal reports:
• Inventories,
• Cash flows,
• Expenses related to the marketing staff,
• Product expenses that are payables,
• Receivables.

3. Marketing Decision Support System
A marketing data support system comprises many software applications and
other instruments businesses may use to gather, organize, and evaluate data.
A single system could use several apps or tools, each of which is tailored to do
a particular job. The system, comprised of collaborative programmes, is at the
centre of how the marketing information system operates.
Marketing Intelligence
Marketing intelligence refers to gathering data or information from third-
party sources, such as professional organisations or specialised magazines. It
contains information about the external marketing environment. Utilising this
information gives the organisation a deeper understanding of its marketing
strategy and its rivals within the industry.

Marketing Research
Research in marketing sometimes takes the form of project-based research
intended to answer particular marketing questions. It often uses various
statistical methods and may include internal and external data. The company
must gather, organise, evaluate, and interpret the data to process marketing
research results. The following are some instances in which marketing
research could be applicable:
lterations to the conditions of the marketing environment,
• Competitor strategies,
• Alterations in the preferences or tastes of the consumer,
• Launches of brand-new products.

4. Marketing Information System Process
Marketing information systems use a sequential process to aggregate data,
exchange discoveries, and ultimately impact decision-making. Marketers may
break down the marketing information system process into the following
steps:
1. Find out which marketing KPIs are the most important,
2. Collect pertinent information from both internal and external sources,
3. Run statistical analyses on the data to understand the patterns,
4. Analysts should send the insights to the necessary departments,
5. Use the information to determine the best way to proceed with the
situation.

Marketing Information Systems Examples
As marketing information systems enable companies to significantly improve
their offerings and the quality of their decisions, almost every company has a
marketing information system. Examples of marketing information systems
include royalty cards and customer profiles.
For instance, many retail establishments provide their customers with loyalty
cards, and many companies give consumers the ability to create profiles in
their online stores to track their purchases more easily.

Real-World Examples of Marketing Information Systems
Let's take a look at some real-world companies using marketing information
systems.
Nike
Nike uses a marketing information system called NikePlus that tracks
customer behavior across its website and mobile apps. The system collects
data on customer preferences, purchase history, and fitness activity, and uses
this information to create personalized marketing campaigns and product

5. recommendations. NikePlus also enables Nike to engage with customers
through gamification, challenges, and social sharing.
1
Spotify
Spotify uses a marketing information system that analyzes customer listening
behavior to make personalized music recommendations and playlists. The
system collects data on customer preferences, listening habits, and social
interactions, and uses this information to create custom playlists and suggest
new songs and artists. Spotify also uses the system to run targeted advertising
campaigns and track customer engagement.

Benefits of Marketing Information System
Companies can gain valuable insights into customer preferences, market
trends, and competitor activities by utilising an MIS. Here are four of the most
important benefits an MIS can provide for companies looking to enhance their
marketing efforts and achieve long-term success.
Improved decision-making
A marketing information system provides relevant and timely information
about customers, competitors, and the market, enabling companies to make
better-informed decisions about marketing strategies, product development,
and resource allocation.
Enhanced customer insights
A marketing information system enables companies to gather and analyze
customer data, including preferences, behaviors, and feedback. This helps
companies better understand their customers and develop more effective
marketing campaigns and product offerings.

6. Increased profitability
A marketing information system can help companies identify new market
opportunities, optimize pricing strategies, and reduce costs. Companies can
increase revenue and profitability by improving their marketing and sales
efforts.
Competitive advantage
Using MIS lets companies stay updated with market trends and competitor
activities. This information can be used to develop more effective marketing
strategies and gain a competitive advantage in the market.

Marketing Information System - Key takeaways
• A marketing information system helps marketers improve their
decision-making by collecting, storing, analysing, and disseminating
relevant data about their marketing efforts.
• The components of a marketing information system include internal
reports, marketing data support systems, marketing intelligence, and
marketing research.
• Marketing information systems use a sequential process to aggregate
data, exchange discoveries, and ultimately impact decision-making.
• Marketing information systems refer to all data from facts, opinions,
viewpoints, rules, and regulations required to make essential marketing
choices.

7. Sales promotion and advertising are two important components of marketing
information systems. These strategies are designed to promote a company's
products or services and encourage customers to make purchases.

Sales promotion includes any marketing activity that stimulates consumer
interest and encourages immediate sales. This can include limited-time offers,
discounts, free samples, contests, and other tactics designed to create a sense
of urgency and drive sales. Companies use sales promotion to boost short-
term sales and generate interest in new products or services.

Advertising, on the other hand, is a long-term strategy that aims to build
brand awareness and loyalty over time. Companies use advertising to create a
consistent message and image for their brand, establish themselves as
industry leaders, and differentiate themselves from competitors. Advertising
can take many forms, including print ads, TV commercials, billboards, and
online ads.

Both sales promotion and advertising are important components of a
marketing information system because they provide valuable data on
consumer behavior and preferences. By tracking the success of different sales
and advertising campaigns, companies can identify which strategies are most
effective at driving sales and engaging customers. This information can then
be used to refine future marketing efforts and improve overall performance.

DATABASE MARKETING
What is Database Marketing?
Let’s start with a basic database marketing definition.
Database marketing is a form of direct marketing. It involves collecting
customer data like names, addresses, emails, phone numbers, transaction
histories, customer support tickets, and so on. This information is then
analyzed and used to create a personalized experience for each customer, or
to attract potential customers.
Traditional direct marketing involves creating direct mail pieces like
brochures and catalogs and mailing them to a list of potential or current
customers in the hopes it evokes a positive response.
Database marketing takes that strategy a step further by seeking to

8. understand how customers want to be marketed to, and then applying those
insights to fulfill the customer’s need via the best channel.

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The Importance of Database Marketing
Today’s marketers have access to more customer data than ever before. That’s
why database marketing is once again becoming so important. It’s all about
using that sea of data to create more relevant marketing messages that better
resonate with customers — both current and potential.

Benefits of Database Marketing
Today’s consumers expect a personalized experience with your brand. To
deliver one, marketers need a unified view of each customer across every
touchpoint. Only then can they understand the customer’s journey and engage
them in a meaningful way. Database marketing strategies make that easier.
Customer databases can help you:
• Identify customer groups – from your most loyal, high-value customers to
first-time customers and occasional purchasers
• Create detailed customer segments based on demographics, behaviors, or
even personal interests
• Design highly personalized messages for both current and prospective
customers
• Determine the best channel and time to engage customers
• Improve your marketing efficiency by not wasting time and money
sending campaigns to those who are unlikely to respond
• Build effective loyalty programs that provide the right incentives for
repeat purchases
• Improve customer service by providing support staff with a 360° view of
the customer’s interactions with your brand

Challenges of Database Marketing
Database marketing offers some compelling benefits — but to do it
successfully, marketers need to understand the challenges as well.
Watch out for these database marketing challenges:

9. • Data decay. Anytime a customer or prospect changes jobs or earns a
promotion, moves to a new address, changes their name, gets a new email
address, or makes any other life change, their profile becomes out of date.
A well-managed database decays at an average 2-3% each month, which
means in just a year, a third of your data could be invalid.* To limit data
decay, focus on information that is less likely to change: name and phone
number, for example, rather than business email.
• Data accuracy. Customers don’t always provide accurate information.
Typos, handwriting legibility, or incomplete info can have a big impact on
the quality of your database. You can limit inaccuracies by replacing input
fields with standardized drop-down menus or checkboxes.
• Acting on customer data in a timely manner. Collecting and analyzing
customer data is just the first step. You have to act quickly enough to
capitalize on a customer’s interest in and interactions with your brand.
This is where marketing automation tools like CleverTap become so
important. By unifying rich user profiles with powerful
segmentation and omnichannel marketing campaigns, you can deliver
timely, personalized experiences for each and every user.

Effective Database Marketing Strategies
How should you get started creating your own database marketing strategy?
Begin with the following steps.
1. Identify your target audience. How old are they? What income level?
What job title? Where do they live? What are they interested in? What else
do they buy? Build a detailed ideal customer profile for your product, and
then use this profile to decide what kind of information you need to
include in your database.
2. Collaborate with other teams. Marketing, sales, and support all have
direct contact with customers and prospects. What information does each
team need to be effective?
3. Find the right software. Customer data doesn’t do anyone on your team
any good if they can’t access it. Choose a tool that makes it easy to see
different kinds of information, customer types, and even organize
customer information to match your different product or service
categories.
4. Gather customer data. Look to both internal and external data sources,
including:
o Acquisition data: Which channel or source did a new customer come
from? Which marketing campaign?

10. o Demographic data: What is the customer’s age, gender, marital status,
education level, location, etc.?
o Technographic data: What device(s) do they use to interact with your
brand? Desktop or mobile? Android or iOS?
o Psychographic data: What are their personal perspectives, values, and
interests? What motivates them?
o Activity data: How have they interacted with your website, social
media pages, and/or mobile app?
o Transaction data: How frequently do they make a purchase with you,
and how much do they spend? Which items do they usually purchase
together?
o Correspondence data: Have they ever submitted a customer support
ticket? Posted a question or complaint to your social media pages?
Responded to a survey?
5. Keep data up-to-date and backed up. Building a customer database
takes a lot of time and effort. Protect your investment by safeguarding
against power outages and technical glitches. CRM software can
automatically update profiles when customers enter new information, and
online tools can protect against data decay by integrating with your
software and updating each contact as they browse your website with
activity data.
6. Respect customer privacy. Social media makes it easier than ever to get
detailed insights into your customers’ interests, perspectives, and life
updates. Effective personalization is about providing a relevant message
to an interested audience — not proving how much personal data you
have.
Once you’ve built your database, you can start with some basic user
segmentation. For instance, create a campaign specifically for first-time
buyers or new customers, or one tailored for your loyalty program
participants.
More complex segmentation methods can analyze across multiple data points
to give you more detailed user segments. Recency, Frequency, Monetary
(RFM) Analysis, for instance, creates customer groups based on how active
they are and how much they spend, so you can quickly see and engage your
champion customers, new customers, or dormant customers.
The most advanced segmentation involves sophisticated predictive
analytics that can forecast a customer’s future behavior. That means
predicting things like potential customer lifetime value, probability of churn,

11. or likelihood of purchase.
These types of advanced segmentation raise conversion rates by up to 5x.

Database Marketing Examples

Identify High-Value Customers and Potential Upsells
An OTT app wants to understand how many of its customers are frequent
binge watchers who are primed for upsell to a premium subscription plan.
They use their customer database to identify their high-value, frequent
watchers, and then send a combined email and push campaign offering these
users a free month of premium as incentive to purchase a subscription. Using
predictive analytics, they’re able to forecast how many campaign recipients
will convert to balance marketing resources and prove ROI.

Provide Personalized Customer Support
A customer service representative for an ecommerce app is assigned an
incoming call. They can immediately access the caller’s profile and see that
they are a new customer who recently made their first purchase: a smart
home device that lets them remotely lock their front door and see a video feed
of visitors. With this information, the service rep can immediately provide a
personalized support experience and offer a faster resolution by helping the
customer quickly set up and troubleshoot their device.

Know Which Products and Services to Pitch Customers
A travel app wants to expand its product offering with a series of guided
backpacking tours. Before dedicating resources to the effort, they tap into
their customer database to view purchase trends and demographic patterns
to first determine whether their customers would actually book guided
backpacking trips, and second, to learn which customer types they should
pitch these trips to. With database marketing, you can ensure that you’re
offering something that your customers actually want.

Predict Who Will Buy and When
For a food delivery app, timing is critical. Understanding your window of
opportunity to engage customers is key to beating the competition and
boosting conversions — but spamming users at every meal time is a surefire
way to lose them. By using predictive analytics with their customer database,
the food delivery app team can forecast which users are most likely to buy.
That way they can send notifications and promo codes to the right users at the

12. right moment. And on the flip side, they can see who’s likely to churn so they
can reach out with a tempting promo campaign and win those users back.

The Next Phase of Database Marketing
We’ve entered the era of relationship marketing, where brands have shifted
focus from simply making the sale to developing long-term relationships with
customers by consistently providing value. And database marketing is the
backbone.
CleverTap’s machine learning capabilities are taking database and
relationship marketing to the next level. These applications can instantly
connect the dots between millions of customer data points, automatically
create detailed user segments, determine the optimal time and channel to
engage each user, and even predict what users will do next.

MARKETING DECISION SUPPORT SYSTEMS

- Marketing decision support systems (MDSS) are computer-based tools that
help marketers make better decisions by providing timely and accurate
information.
- MDSS can assist with a variety of tasks, including market research, sales
forecasting, product development, and pricing.
- MDSS can also help marketers analyze customer data and identify trends and
patterns that can inform marketing strategies.

Here are some examples of how MDSS can be used in Kenya:

1. Market Research: MDSS can be used to conduct market research in Kenya.
For example, a consumer goods company can use MDSS to gather information
on consumer preferences and behavior in different regions of Kenya. This
information can help the company develop targeted marketing campaigns for
specific regions.

2. Sales Forecasting: MDSS can be used to forecast sales in Kenya. For
example, a telecommunications company can use MDSS to forecast sales of a
new product in different regions of Kenya. This information can help the
company allocate resources and plan marketing campaigns accordingly.

13. 3. Product Development: MDSS can be used to support product development
in Kenya. For example, a food and beverage company can use MDSS to gather
feedback from consumers on new product concepts. This information can help
the company refine product concepts and create products that better meet the
needs of Kenyan consumers.

4. Pricing: MDSS can be used to support pricing decisions in Kenya. For
example, a retail company can use MDSS to analyze pricing data in different
regions of Kenya. This information can help the company set prices that are
competitive and profitable.

5. Customer Data Analysis: MDSS can be used to analyze customer data in
Kenya. For example, a financial services company can use MDSS to analyze
customer data and identify trends and patterns in customer behavior. This
information can help the company develop targeted marketing campaigns and
personalized offers for individual customers.

Overall, marketing decision support systems are valuable tools for businesses
operating in Kenya. By providing timely and accurate information, MDSS can
help businesses make better marketing decisions and gain a competitive edge
in the marketplace.

Benefits of Marketing Decision Support Systems

1. Improved decision-making: MDSS can help businesses make more informed
decisions by providing access to relevant data and analysis tools.
2. Increased efficiency: MDSS can help businesses automate routine tasks,
freeing up time and resources for more strategic activities.
3. Better targeting: MDSS can help businesses identify and target specific
customer segments with tailored marketing messages.
4. Enhanced customer engagement: MDSS can help businesses understand
customer preferences, behaviors, and needs, leading to more effective
customer engagement.

14. Challenges facing MDSS

1. Data quality: Ensuring the accuracy and completeness of data is critical to
the success of MDSS. However, businesses often struggle with data quality
issues, such as missing or inaccurate data.

2. Data integration: Integrating data from different sources can be challenging,
requiring careful planning and data management. MDSS require data from
various sources, and integrating these sources can be complex.

3. Technical expertise: Implementing and managing MDSS requires technical
expertise and resources. Businesses may struggle to find staff with the
necessary technical skills or may need to invest in training and development.

4. Cost: Implementing MDSS can be expensive, requiring significant
investment in hardware, software, and personnel. This cost can be a barrier
for small and medium-sized businesses.

5. Resistance to change: Implementing new technology can be challenging,
particularly if it involves changes to existing processes and procedures.
Resistance to change can slow down the adoption of MDSS.

6. Security and privacy concerns: MDSS rely on data, and businesses need to
ensure that this data is secure and protected. Privacy concerns can also arise
when businesses collect and use customer data.

Overcoming these challenges requires careful planning, resources, and
expertise. Businesses need to invest in data management, technical expertise,
and training to ensure the success of MDSS implementation. They also need to
consider the costs and benefits of MDSS and ensure that the benefits justify
the investment. Overall, while there are challenges associated with MDSS
implementation, the potential benefits make it well worth the investment.

15. GEOGRAPHIC INFORMATION SYSTEMS IN MARKETING
- Geographic information systems (GIS) are computer-based tools that allow
marketers to analyze and visualize geographic data.
- GIS can be used to identify target markets, understand the spatial patterns of
customer behavior, and optimize sales territories.
- GIS can also be used to map out competitor locations, identify potential
distribution channels, and explore new market opportunities.
- GIS can help marketers make more informed decisions by providing a
comprehensive view of the marketing landscape.

Here are some examples of how GIS can be applied in marketing:

1. Target Market Identification: GIS can be used to identify target markets
based on geographic location. For example, a retailer can use GIS to analyze
customer data and identify areas with high concentrations of potential
customers. This information can help the retailer focus marketing efforts on
those areas to increase sales.

2. Customer Behavior Analysis: GIS can also be used to understand the spatial
patterns of customer behavior. For example, a restaurant can use GIS to
analyze customer data and identify areas where customers are more likely to
frequent. This information can help the restaurant optimize its marketing
efforts to attract more customers.

3. Sales Territory Optimization: GIS can be used to optimize sales territories
based on geographic data. For example, a pharmaceutical company can use
GIS to analyze physician data and identify areas with high concentrations of
potential customers. This information can help the company optimize its sales
territories to increase sales.

4. Competitor Analysis: GIS can also be used to map out competitor locations.
For example, a retailer can use GIS to identify competitor locations in a
particular area. This information can help the retailer make informed
decisions about where to open new stores or how to adjust pricing strategies.

5. New Market Opportunities: GIS can be used to explore new market
opportunities based on geographic data. For example, a real estate developer
can use GIS to identify areas with high growth potential. This information can

16. help the developer make informed decisions about where to invest in new
developments.

Overall, Geographic Information Systems are valuable tools for businesses
looking to make data-driven decisions and gain a competitive edge in the
marketplace.


Importance of Geographic Information Systems

1. Improved market analysis: GIS can help businesses analyze market trends
and customer behaviors across different regions and geographies.
2. Enhanced customer targeting: GIS can help businesses identify and target
specific customer segments based on their location and other demographic
characteristics.
3. Better resource allocation: GIS can help businesses allocate resources more
efficiently by identifying areas with high potential for growth or customer
engagement.
4. Improved decision-making: GIS can help businesses make more informed
decisions by providing access to relevant spatial data and analysis tools.

Challenges facing use of GIS

1. Data quality: Just like MDSS, ensuring the accuracy and completeness of
data is critical to the success of GIS. However, businesses often struggle with
data quality issues, such as missing or inaccurate data.

2. Technical expertise: Implementing and managing GIS requires technical
expertise and resources. Businesses may struggle to find staff with the
necessary technical skills or may need to invest in training and development.

3. Data integration: Integrating data from different sources can be challenging,
requiring careful planning and data management. GIS require data from
various sources, and integrating these sources can be complex.

4. Cost: Implementing GIS can be expensive, requiring significant investment
in hardware, software, and personnel. This cost can be a barrier for small and
medium-sized businesses.

17. 5. Privacy concerns: GIS rely on data, and businesses need to ensure that this
data is secure and protected. Privacy concerns can arise when businesses
collect and use customer data, particularly location data.

6. Legal restrictions: There may be legal restrictions on the use of certain
types of geographic data, such as data related to protected areas or sensitive
locations.

Overcoming these challenges requires careful planning, resources, and
expertise. Businesses need to invest in data management, technical expertise,
and training to ensure the success of GIS implementation. They also need to
consider the costs and benefits of GIS and ensure that the benefits justify the
investment. Overall, while there are challenges associated with GIS
implementation, the potential benefits make it well worth the investment.