Definition: A marketing information system is a platform for collecting, storing, analyzing, and distributing valuable marketing data that you receive from internal and external resources. Marketers and other specialists use it to quickly gain access to accurate data that helps them make informed decisions to grow their businesses.
In this article, I will acquaint you with the components of a marketing information system, its benefits, and some common examples of such platforms.
Components of a Marketing Information System
A holistic marketing information system comprises the four components given below. Therefore, you must combine them effectively to make the most out of them.
Internal records include all the transactional, financial, and marketing data from your performance reports. They serve as the first and most easily accessible source of information within your organization. For that purpose, you must closely monitor your cash flows, product inventory, sales, employee costs, and marketing reports on the performance (including current and past ones).
This crucial marketing information system component lets you state a particular problem as your present business goal and investigate all the details required to develop its solution. Anyone who is planning to create a new product should conduct marketing research. After that, they can successfully create a solution. By stating a problem, marketers can focus their efforts on collecting specific data from the most relevant sources.
Marketing intelligence lets you understand the present situation, changes, and recent innovations in the market. It also lets you monitor your rivals’ strategies, consumers’ preferences, and the latest trends. You can get this information from external resources such as your rivals’ websites, magazines, marketplace overviews, journals, partners, press, and suppliers.
Marketing decision support system (MDSS)
You can retrieve this data using special analytics software and services that allow marketers to collect, store, and analyze data for making better decisions. For example, you can discover the average costs companies from your industry spend on PPC advertising or carry out market segmentation using certain third-party platforms.
By combining these four important marketing information system components, you can understand the actual situation within your company and the market and improve your strategies accordingly.
Whether you are a business owner or a marketer, you will inevitably have to make strategic decisions to improve your product, attract new audiences, increase your market share, and handle your competitors. Therefore, you require accurate information about your marketing environment, competitors, customers, and their behavior to create and manage effective campaigns.
The insights you get from marketing research and reports will help you avoid wasting your precious time and resources unnecessarily. If your marketing information system is more complex, it will be more valuable to you. Other advantages of using a marketing information system include the following:
- A thorough analysis of demand and supply
- Higher competitiveness and market share
- Identifying business development opportunities
- Implementing a consumer-oriented approach
- Identifying and managing business risks
- Improving your company’s overall marketing strategy
- Monitoring your competitors
- Taking better control of all marketing operations
Remember, though, that you need time, money, and an educational curve to implement a marketing information system. Once you are ready to start, you need to find ways to get the necessary components.
Examples of marketing information systems
Most contemporary businesses have marketing information systems to make better decisions and drive more sales.
For example, many retail stores give their clients loyalty cards, and many brands suggest customers create their profiles in their online stores. Using the data they gather with the help of these loyalty cards and profiles, businesses monitor their purchase history, the money they spend on purchases, their level of engagement, the items they prefer, etc.
Accordingly, they manage their pricing policy, create better marketing campaigns and put up relevant offers in the best place and at the right time.
Similarly, online booking services monitor clients’ preferences, habits, and routes to gain insights and act accordingly.
For example, airlines and hotel services monitor the above data and use it to their advantage. Thus, they can monitor the demand and increase prices when it goes up. They can also offer discounts to their regular customers during the off-season.
I hope this article has helped you learn everything about marketing information systems and their components, advantages, and examples. Then, you can implement this approach in your business to keep up with the market changes and increase your profits.