Chapter 3 Marketing info system and demand Management- MBS

MARKETING
INFORMATION SYSTEM
AND DEMAND
MEASUREMENT
By Advance Saraswati Prakashan Pvt. Ltd
Sankhamul, 01-4780359
Asp.feedback@gmail.com
3

LEARNING OBJECTIVES
After comprehensive studying of this chapter, learners will be able to:
 Marketing Information System and its components,
 Marketing Research: Areas and Process,
 Market Demand and Its Measurement,
 Methods of Estimating Current and Future Market Demands,
 Practice of Marketing Information System (MKIS) in Nepal.
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MARKETING INFORMATION SYSTEM
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 “A marketing information system consists of people, equipment and procedures to gather,
sort, analyze, evaluate, and distribute needed, timely and accurate information to
marketing decision makers.”  Philip Kotler
 “Marketing information system is an ongoing, organized procedure to generate, analyze,
disseminate, store and retrieve information for use in making marketing decisions.”
 William J. Stanton
Marketing information is an organizational section or entity with a purpose to
gather, organize, store, retrieve and analyze data relevant to a firm’s past, present
and future operations on an ongoing basis in order to provide support for
management’s marketing decision. Marketing information system consists of four
subsystems, namely the internal records system, marketing intelligence system,
marketing research system and marketing decision support system.

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Marketing Managers and other Information Uses
Developing Need Information
Internal
Databases
Information
Analysis
Marketing
Intelligence
Marketing
Research
Analysis Planning Implementation Control
Assessing
Information
Needs
Distributing
and Using
Information
Target
Market
Marketing
Channels
Public Macro Environment
Forces
Competition
Marketing Environment
Marketing Information System

Features of Marketing Information System
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Features of Marketing
Information System
Continuous Process
Interrelated Components
Right Time
Reliability, Accuracy and Completeness
Constancy and Accessibility

COMPONENTS OF MARKETING INFORMATION SYSTEM
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Components of a
Marketing Information
System
Marketing
Intelligence
System
Internal Records
System
Marketing
Research System
Marketing
Decision Support
System

Internal Records System
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 Marketing managers rely on internal reports related to customer orders, sales,
price levels, cost, inventory levels, receivable and payables.
 The heart of the internal record system is the order-to-payment cycle. Customers
send orders to the firms.
Decision by Top Level Management
Internal Records
System
Financial Report
Customer’s Order and Complaints
Invoice
Sales Reports
Other Records

Marketing Intelligence System
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 “A marketing intelligence system is a set of procedures and sources used by managers to
obtain their everyday information about pertinent development in the marketing
environment.”  Philip Kotler
 There are two sources of marketing intelligence. They are formal and informal.
Salesmen, intermediaries, information centers, experts, private agencies, etc. are
formal sources and newspapers, trade journals, magazines, employees, etc. are
informal sources.
Informal Sources
Formal Sources Informal Sources

Marketing Research System
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 “Marketing research is defined as the systematic design, collection, analysis and reporting
of data and findings relevant to a specific marketing situation facing the company.”
 Philip Kotler
 “Marketing research is the application of scientific principles of observational,
experimental, historical and survey methods in a careful search for more accurate
knowledge of consumer and market behavior so that more effective marketing and
distribution may be developed.”  J. P. Alevizos
 Marketing research is the development, interpretation, and communication of decision
oriented information to be used in all phases of the marketing process. Research
plays a role in all three phases of the marketing management process: planning,
implementation, and evaluation.

Marketing Decision Support System
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 “A marketing decision support system is a set of statistical tools, and techniques models
with hardware and software support that helps the manager in analyzing the information
properly and using it in making better and effective marketing decisions.”
 Philip Kotler
 marketing decision support system is a set of statistical tools and techniques
models with hardware and software support that helps the manager in analyzing
the information properly and using it in making better and effective marketing
decisions.
 The following figure depicts the relationship in a decision support system. The
components of marketing decision support system are as follows:
Marketing Decision Support System
Data Bank Model Bank
Statistical Bank

MARKETING RESEARCH: AREAS AND PROCESS
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 “Marketing research is defined as the systematic design, collection, analysis and reporting
of data and findings relevant to a specific marketing situation facing the company.”
 Philip Kotler
 “Marketing research is the application of scientific principles of observational,
experimental, historical and survey methods in a careful search for more accurate
knowledge of consumer and market behavior so that more effective marketing and
distribution may be developed.”  J. P. Alevizos
 Marketing research is the development, interpretation and communication of
information to be used in the strategic marketing process.

Features of Marketing Research
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Features
of
Marketing
Research
Wide and Comprehensive Scope
Systematic and Scientific
Collects and Analyzes Data
Continuous and Dynamic Process
Benefits Company and Consumers
Tool for Decision-making
Reduces Gap between Producers and Consumers
Uses Different Methods
Prioritize Different Elements of Marketing System
Accurate Data Collection and Critical analysis

Areas of Marketing Research
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Areas
of
Marketing
Research
Market Research
Product Research
Price Research
Promotion Research
Consumer Research
Physical Distribution Research
Sales Research
Distribution Chaannel Research
Prioritize Different Elements of Marketing System
Advertising Research

Process of Marketing Research
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Define the Problems and State Research Objectives
Research Design and Selection of Information Sources
Information Collection
Analyze Information
Findings and Reporting

MARKET DEMAND AND ITS MEASUREMENT
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 The main objective of marketing is to keep the continuation of sales. But
continuation of sales is not possible without market demand.
 Therefore, each organization should have to measure the demand of its goods and
services with the help of information technology.
 After measuring the demand only the organization can consider promotion,
production, sales, distribution and other decisions.
Potential Market
Available Market
Target Market
Penetrated Market

Level of Demand Measurement
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1. Market Demand: Market demand refers to the amount of a product that would
be purchased by specific customer goods within a specified period at a specific
level of industry wide marketing activity. Market demand can be measured in the
following three levels.
 Product Level
 Space Level
 Time Level
2. Company Demand: Company's demand is the amount of product that an
organization could sell during a specific period. It is the company's estimated
share of market demand at alternative levels of company marketing effort in a
given time period.

METHODS OF ESTIMATING CURRENT AND FUTURE MARKET
DEMAND
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 The future of business organization depends on the increase of market demand
because organization gets profit with the increase in market demand.
 Market demand is affected by customer’s changed interest, desire, buying
capacity, competitive environment, etc.
 Therefore, while making marketing policies and programs, business organization
should estimate own market demand as well as current market demand and
future market demand.

Methods of Estimating Current Market Demand
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 For organization estimating market demand is important because organization
makes its future activities and planning only after estimating the market demand.
 Organization should estimate future market demand along with current market
demand. Marketers estimate current market demand by using the following
methods.
Total Market
Potential
Area Market
Potential
Company/Industry Sales and
Market Share Estimate
Methods of Estimating Current Market Demand

Contd…
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 Total Market Potential: Total market potential is the maximum amount of sales
that might be available to all the firms in an industry during a given period, under
a given level of industry marketing effort and environmental conditions.
 Area Market Potential: Companies face the problem of selecting the best
territories and allocating their marketing budget optimally among these
territories. Therefore, they need to estimate the market potential of different
districts, towns, cities, states, and nations.
Market-buildup Method
Market Factor Analysis or Multiple Factor Index Method
 Company/Industry Sales and Market Share Estimate: Apart from estimating
total market potential and area market potential, a company needs to know the
actual industry sales taking place in a market. This requires identifying
competitors and estimating their sales.

Method of Estimating Future Market Demand
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Opinion
Survey Method
Past Sales Trend
Analysis Method
Market
Test Method
Executive Opinion/
Judgment Method
Survey of Buyers’
Intentions Method
Sales Force Opinion
Method
Expert Opinion
Method
Methods of Estimating Future Market Demand

PRACTICE OF MARKETING INFORMATION SYSTEM IN NEPAL
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 Marketing information system emerged for gathering the reliable accurate and
justifiable information that helped in achieving success in the competitive market.
 Currently, every types of firm have understood the importance of marketing
information for decision making.
 Most of the multinational companies are using the marketing information system
for decision making. Surya Nepal and Gorkha Brewery are the pioneer
multinational companies to better understand the need and problems of the
customers.
 They conduct the market research programs for the better information.

Components of Marketing Information System
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 Internal Record System: Internal records system gather information from sources
located within the organization. Sales report, financial report, audit report,
purchase report, annual report are the internal sources of information.
 Marketing Intelligence System: Marketing intelligence system is the set of
procedures and sources used to obtain everyday information about pertinent
development in the market place.
 Marketing Research System: Marketing research involves specific inquiries into
specific marketing problems. It is basically problem oriented. It is not getting
attention from marketing managers in Nepal.
 Decision Support System: Decision support system does not collect the
information. This system stores, analyze and synthesizes the collected
information. Decision support system is not well practiced in Nepal. Some global
companies use it as a tool to interpret data.

CASE ANALYSIS & REPORT
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 Please go through the books for case analysis.

Chapter 3 Marketing info system and demand Management- MBS

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