Marketing Intelligence System

Marketing Intelligence System. (MIS) Consists of people,

equipment, and procedures to gather, sort, analyze, evaluate and
distribute timely and accurate information to decision makers.

Marketing intelligence software can be deployed using an onpremises or software as a service (SaaS, or cloud-based) model.

Market Intelligence is the information relevant to a companys

markets, gathered and analyzed specifically for the purpose of
accurate and confident decision-making in determining market
opportunity, market penetration strategy, and market
development metrics.

In today's price competitive environment, the successful business will be

customer driven rather than product driven. They develop their product line
and service menu first by testing them in the marketplace and then
developing and broadening only as their information or intelligence system
applies.
A Market Intelligence System employs various methods of collecting
valuable data or information that enables you to forecast the direction of
your market.
Primary data is the basis for your Market Intelligence System. Secondary
data is the next level of information necessary for an effective system and
comes from a variety of sources. Sales associates should be talking to
each and every customer that comes into your business.
Collecting data is important but knowing what you want from it and how
you want to apply it is equally important to a successful Market Intelligence
System. You must develop specific objective for the data you are
collecting.
The key to a successful Market Intelligence System is timely collection of
relevant information and processing it quickly so it can be used to support
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your entire operation.

Marketing Intelligence System

Market Intelligence is the information relevant to a companys

markets, gathered and analyzed specifically for the purpose of
accurate and confident decision-making in determining market
opportunity, market penetration strategy, and market
development metrics.

Components of Marketing Intelligence

System

CUSTOMER INTELLIGENCE- This provides useful information

on a customers business, preferences or loyalties, personal
demographic details.

COMPETITION INTELLIGENCEThis gives information on

strengths and weaknesses of each competitor in the territory, the
strategy and the tactics being used by them.

Coca Cola uses expert systems to make the retailers grow their
business.

PURPOSE OF MARKETING INTELLIGENCE

SYSTEM
Customer satisfaction
Creative and effective marketing strategy
Realities of the company and its competitors
Strengths and weaknesses
Realities of the marketplace Opportunities and threats
Competitive advantage
Anticipate
the competitive move and develop
competitive strategies

DECISION SUPPORT SYSTEM

The term refers to an interactive computerized

system that gathers and presents data from a
wide range of sources, typically for business
purposes. DSS applications are systems and
subsystems that help people make decisions
based on data that is culled from a wide range of
sources.
Ex: cow farming
Provider of such software is found in
profitlogic.com.
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Example:
A national on-line book seller wants to begin selling its products
internationally but first needs to determine if that will be a wise
business decision.
The vendor can use a DSS to gather information from its own
resources (using a tool such as OLAP) to determine if the
company has the ability or potential ability to expand its business
and also from external resources, such as industry data, to
determine if there is indeed a demand to meet.
The DSS will collect and analyze the data and then present it in a
way that can be interpreted by humans. Some decision support
systems come very close to acting as artificial intelligence agents.
DSS applications are not single information resources, such as a
database or a program that graphically represents sales figures,
but the combination of integrated resources working together .

CITY COLLEGE OF NOIDA

The Decision Support System is designed to help administrators,
faculty and staff with data and information for Program review
reports.
1.Campus and school planning projects Grants-proposals
2.Faculty

and

classified

position

requests

3.Scheduling of classes and Proposals to either expand or

contract
current
class
offerings.
4.The Decision Support System consists of three database
modules.
They are:1.Student Demands for Courses and Sections.
2.Enrollment Productivity 3.Student Headcount and Characteristics
4. Student Success
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LML Ltd was incorporated as Lohia Machines Private Ltd in 1972, its principal activity
being manufacture of industrial machinery for the synthetic fibre industry. It was the
second largest scooter manufacturer in India with a market share of 28% and output of
3,25000 units per annum by 1998.
The company launched two motor cycle models- Adreno and Energy- in the life cycle
segment followed by Freedom in the 100-110 cc segment in July 2002. On account of
steep downside due to circumstances beyond its control, the company had to undertake
restructuring its finances and fund mobilization by 31st March 2005.
According to Directors report the companys performance was as followsPeriod ended 2003
Period ended 2005
Production of two wheelers 317968
181935
Sales
315354
190561
Loss
38.68
96.31
These figures clearly show that the performance of the company is far from satisfactory.
The company attributes it to the decline in geared two wheelers and abnormal rise in
gearless scooters. Mr Deepak Singhania, the managing director of LML has fought many
battles in the market and managed to survive despite products bombing and the
technology top drying up following rifts with partner Piaggio of Italy. He has hung around
as scooters have lost the market to motorcycle.
Now with just 5 percent market share and depletion of financial resources, is it possible
for LML to take on the likes of Bajaj Auto, Hero Honda, and TVS.
Q- Do you think that marketing research can help LML to recover its lost ground? If yes
how? If not, why not?
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Quality and Quantity of Market Information

Quality- The meaning of Market information quality lies in how
the information is perceived and used by its customer. Though
absolute attributes are important, it is how those attributes are
perceived, now and in the future, that defines information
quality.
Identifying quality information involves two stages: first,
highlighting which attributes are important and second,
determining how these attributes affect the customers in
question. The attributes of market information quality and how
they can be used as benchmarks to improve the effectiveness
of information systems and to develop information quality
strategies for all organizations, particularly for those in the
information business.
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Managing information quality is a continual process.

Products and technologies come and go, high quality
information today may be low quality information tomorrow.
To compete requires a continual focus on definition and
follow-through as regards information system design and
operational processes. The multiple dimensions of
information quality can be used to add structure to this
inherent complexity. By defining, assessing, modifying and
redefining what information quality is and how it can best be
managed, information can remain the vehicle rather than the
impediment for achieving business success.
Quantity- Quantity of information are intended to quantify or
precisely measure a problem often using sophisticated
statistical procedures and scientifically drawn samples.
Quantitative information is associated with conclusive
research.
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Decision Tree
A decision tree is a graphical device depicting the sequences of action-event
combinations. All possible sequences of action-event combinations are shown in
a systematic manner in a decision tree. The decision tree shows a simple
decision of making a choice between two alternatives viz whether or not to open
a new branch of a particular dry cleaning company. There are three branches
emanating from the circular node which represent the three possible outcomes
or states of nature that can result. These are increased market share, no change
in market share and reduced market share. The typical method of constructing
such a tree as follows1.Identify all possible courses action.
2.List the possible results i.e. states of nature of each course of action.
3.Calculate the pay-off of each possible combination of course of action and
results.
4.Assign probabilities to the different possible results for each given course of
action.
5.Finally select the course of action that gives the maximum pay off.
Advantages1.Structures the decision process and thus helps one in making a decision in a
systematic manner.
2.The approach necessitates that the decision maker considers all possible
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outcomes.

3. Helpful in communicating the decision making process to others in sufficient

manner.
4. The decision tree can be used with a computer which means that different
assumptions can be used to ascertain their influence on the final outcomes.
Limitations
1. Decision trees need time and money to complete. As such they are
unsuitable for minor decisions where their cost may exceed the benefit to be
derived from then.
2.As the information is presented in a quantitative form there is a risk that it
may be taken as exact.
3.The information required for this approach may not be available because a
particular decision was not taken before and hence there is no evidence on
which the probability can be assumed

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Bayesian Concept
If the analysis based on decision tree is not helpful to the management in
its decision making a more sophisticated technique known as the
Bayesian analysis can be tried out.
For example a firm manufacturing readymade garments finds that certain
garments are not selling in the market on account of their colour. It
therefore has to use a different colour combination. In the meanwhile it
has to revise its prior probabilities.
There can be three types of analysis using the Bayesian approach. These
are prior analysis, posterior analysis and pre posterior analysis.
While deciding which course of action should be chosen the decision
maker uses prior probabilities only.
Posterior analysis involves the use of posterior probabilities while deciding
on the course of action. This analysis deals with the strategic question of
whether new information should be obtained and if so how much before
deciding the course of action.
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ExamplePossible consumer reactions

consumer reactions
Very favorable
Favorable
Unfavorable

Alternative courses of action

A1
10000000
1000000
-5000000

A2
0
0
0

Probabilities of
P
.7
.1
.2

On the basis of this information prior analysis will give the expected monetary value.
This will be
EMV(A1)= (Rs 10000000 * .7) + Rs 1000000 * .1)+ (-Rs 5000000*.2)
= Rs 7000000 + Rs 100000 1000000
= Rs 6100000
EMV(A2)=Rs 0
EMVPI= EMV(C) EMV(UC)
= 7100000 6100000
= 1000000
This indicates that the marketing manager should decide to run the special promotion.
This is known as prior analysis as the expected monetary value is based on the
assignment of probabilities.
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Posterior Analysis uses both present and additional information. The

following table gives the posterior probabilities on the basis of additional
information.
Outcome
Prior P
S1-very fav. .7
S2-fav.
.1
S3-Unfav.
.2
Total
1.0

Conditional P
.6
.3
.1
1.0

Joint P
.42
.03
.02
.47

Posterior P
.894
.064
.042
1.000

Posterior EMVPI = EMV(C) EMV(UC)

= Rs 9004000 + Rs 8794000
=Rs 2,10,000
Prior EMVPI = Rs 10,00,000
Prior EMVPI was higher than posterior EMVPI. This shows that on account
of the new information, the degree of uncertainty has declined.
Pre-posterior Analysis- Helpful in evaluating the worth of research before it
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is undertaken.

The marketing manager thinks that there are likely to be three test market
outcomes: 1. a 15% increase in sales(T1) 2. a 5%increase in sales(T2) 3. no
increase in sales (T3). He has now to obtain conditional probabilities of test
markets.
States of nature

Test Results

T1
(+15%)
.6
.3
.1

S1
S2
S3

T2
(+5%)
.3
.6
.1

T3
(+-0%)
.1
.1 Rs 6100000
.8
A1

.7
.1

1000000
.2

-5000000

1.0

,894
.064

A2

No Market
Test

10000000

Rs 8794000

.042

A1

Market Test

A1

-Rs 368000
A1

-Rs
88320

A2

1000000

-5000000

10000000
1000000

-5000000
1.0
0
.292
10000000
.042 1000000
.686
-50000000

A2

T3 .24

10000000

0
.724
.207
.069

Rs 7102000

T2 .29
Rs 6192760
-Rs 80000
__________
Rs 6112760

1.0

A2

T1 .47

1.0

States of nature
T1
(+15%)
S1 Very favorable
.42
S2 Favorable
.03
S3 Unfavorable
.02
Marginal probabilities
.47

Test Results
T2
T3
(+5%)
(+-0%)
.21
.06
.02
.29

.07
.01
.16
.24

Marginal Probabilities
.7
.1
.2
1.0

The prior probabilities of the possible outcomes can now be revised. These probabilities
are revised by using Bayes rule.
P(S1/T1)= P(S1 AND T1)
__________ = .42/.47= .894
P(T1)
P(S2/T1) = P(S2 AND T1)
____________= .03/.47=.064
P(T1)
P(S3/T1)=P(S3 AND T1)
___________
P(T1)
= .02/.47= .042
It is possible to calculate the expected monetary value of imperfect information(EMVII)
EMVII = EMVII CI
=Rs 92760 80000
=Rs12760, this is the maximum amount that can be paid for this research.
= Rs 92760-80000= Rs 12760. Since the expected monetary gain is positive, it is
advisable to undertake the test market.
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Limitations1.Bayesian analysis is an abstruse method and is more an academic exercise

than a realistic decision method.
Many a time the marketing researcher is given the direction by the management
and is not associated with structuring of a problem.
Advantages1.It facilitates representing and taking fuller account of the uncertainties related to
models and parameter values.
2.One of the major benefits of the Bayesian approach is the ability to incorporate
prior information. While other stock assessment approaches use "prior"
information by specifying levels or ranges of individual parameters for use in
sensitivity analysis.
3.The Bayesian approach forces the analyst to look at historical data sets or to
canvass expert knowledge to determine what is known about the biological
parameters and processes.
4.The use of Bayesian techniques does not eliminate the need for sensitivity
tests.
5.A major advantage of the Bayesian analysis is that it enables to carry out the
analysis in a sequential fashion.
6.Bayesian method covers more information than traditional methods.
7.The ability to consider model uncertainty within a single framework, although
currently underused, is a major advantage of Bayesian methods
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Types of Market Information

Internal company information What is the first thing you will analyze
if asked to expand the organization? It would be the strength and
capability of the organization to expand. Planning an expansion without
having the capacity of it is a waste of time.
Thus marketing managers need to have an internal analysis to
determine where does their own company stand. For these they need
regular sales reports, purchase reports, margin reports, costing, customer
service expenses etc. All these can be obtained through MIS and it is the
first type of information a marketing manager looks for.
Marketing intelligence The second kind of information which will be
needed is the business environment or in other words market intelligence.
The Market intelligence pertains to overall demand in the market, the
potential of the market, competitors in the market etc. Generally a lot of
marketing intelligence is gathered from internal sources itself such as
customers, suppliers and distributors. Marketing intelligence from these
sources is important to grasp any day to day changes happening in the
business environment.
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Types of Market Information

For example A television company will expect lots of sales in a festive
environment and your distributors will probably inform you that they will
be needing discount in this time.
Thus during a festive environment you have to use Price discounts as a
sales promotion tactic and at the same time ensure having a higher
inventory of televisions. Furthermore, industry information can also be
found by professional organizations such as ORG MARG and others.
Market Research While internal information and market
intelligence is important, the most important information which a
marketing manager can receive is What a customer wants. Thus time
to time market and consumer research is needed for new product ideas
as well as expected improvement in processes. This kind of information
can be expensive to gather but is worth the expense. Major changes in
industries happen mainly because they are in touch with their end
customers and they know what their customer wants.
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Furthermore, predicting how a market will respond to any changes being

made in the marketing plan can be answered by your end customers only
and not by your distributors and suppliers. This is why a lot of
organizations conduct trial runs.
With these three information, a marketing manager has enough
knowledge to go ahead with his marketing plan. If the plan fails, then he
has to determine which of the above information is improper. If the
marketing plan fails because of internal problems, then his internal
company information was improper. If it fails because of poor support from
distributors and suppliers, then his marketing intelligence was incorrect.
And finally if the end customer does not accept the marketing plan then
his market research was improper.

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