If you are a micro-sized enterprise, such as a single proprietor who runs a corner barbecue stand with just one or two employees, then you may not quite have a budget to spare for assessing the environment around you. You cannot, for instance, afford to hire professional researchers. So how do you set about assessing, for instance, the performance of a competing barbecue stand across the street? You may have to do it yourself, perhaps via personally gathering information through observing the store or even through buying from them to try out their product yourself.
While those are valid methods for gathering information, you may want to avail more sophisticated methods as your organization becomes larger and more formal. In fact, you will want to institutionalize the information-gathering process so that it becomes a regular duty, responsibility, and protocol for the business. This is where having a more formal system comes in.
The Market Information System (MIS) is the people, equipment, and procedures used to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision-makers.
Components of a Market Information System
Internal Records
This refers to documents in the company’s Order-to-Payments cycle, such as invoices, shipping orders, etc. It also avails documents and resources that comprise the sales information system, such as sales forecasts, information from sales personnel, and information culled from automated sales system.
Many businesses are sitting on gold mines of information without even knowing it. Client records, for instance, may contain purchase histories that, if properly analyzed, can produce patterns which can be useful for determining seasonality in buying behavior. In fact, a lot of customer insights can be generated by analyzing customer records in bulk using computer programs to extract these patterns.
How can you gather a lot of data from your clients? By encouraging them to provide as much information as possible. The SM chain of department stores, for instance, offers , the SM Advantage Card, that is packaged as a loyalty card for its clients, but it is actually a means of gathering information for data analysis. SM. knows the customers’ age, address, and socio-economic class based on the application forins submitted. The department store then tracks the customers’ buying histories (because customers are encouraged to hap,d the card over during purchases), with records of what they buy, when, and how much.
In sophisticated data analytics systems, the buying behaviors of huge numbers of people are processed so that the systems can “learn” new insights about how customers behave. In a celebrated case, US retailer Target actually knew that a customer was pregnant even before her own family did based only on the items that she recently bought, none of which were obvious indicators. Their system was able to study patterns of behavior from its databank of hundreds of thousands of customers. By comparing her purchases with theirs, the system was able to infer that she just discovered that she was pregnant! (Hill 2012)
However, such systems can be very expensive and beyond the reach of small enterprises. But the next best thing could be simple computer-based systems that are sensibly set up such as spreadsheets that record as much customer information as possible, along with their buying histories. As a rule, it pays to record as much information as possible—the processing can follow later on.
Marketing Intelligence
The set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment. This includes newspapers, intermediaries, social networks, trade conferences, suppliers, ad agencies, the reverse engineering of competitor products, published reports, purchased information, etc.
In layman’s terms, intelligence is gathered by simply “putting yourself out there.” Having a network of people and sources of information in the right places, in general, is the easiest way to get potentially useful knowledge. Being part of the right social network of friends or groups on Facebook, for instance, can lead to getting a potential useful insider tips faster than your competitors can. Encouraging also your sales team to do small talk with clients is often a quick way to gather insights about what their future needs are.
More extreme cases of intelligence involve going through a competitor’s garbage to piece together a picture of what they are working on (because once the garbage is outside their premises, it is no longer considered as private property) or pirating employees from one’s competitor in order to have a direct access to a first hand knowledge of how they work.
Because of its nature, however, the value of intelligence cannot be predicted. Sometimes your network can deliver and produce valuable information, but oftentimes it is more likely to provide information of questionable value that is more akin to gossip. Nevertheless, you will likely still be better off having the network in place than not. The only way to manage intelligence, in order to maximize the probability of getting useful information, is by increasing the reach of your network as much as you reasonably can.
If your sales force has very good relationships with their distribution partners (supermarkets, groceries, et al.), then these partners may go so far as to inform them whenever a competitor is about to do something new—such as a new product or a new promotional gimmick.
When Unilever’s Vaseline 2-in-1 soap was launched in the market with a “three-pid” three-soaps discount pack, they were surprised by the immediate appearance of a similar three-pid pack from chief competitor Safeguard. Clearly, Safeguard was able to get wind of the Vaseline product launch from its own extensive intelligence network! .
Market Research
The systematic design, collection, analysis, and o So reporting of data and findings relevant to a specific marketing situation be facing the company. This includes taking surveys or conducting exploratory studies of a market.
Market research is scientific in nature, utilizing the scientific method in order to gain insights on how to solve real-world problems. In this case, problems usually involve resolving questions about how to best provide value to customers or about understanding how consumers behave.