Marketing Information is the Currency of the New Economy

In the early 1980’s, although Coke was still leading soft drink, it was only losing market share to Pepsi. For years, Pepsi had successfully mounted the “Pepsi Challenge”, a series of televised taste test showing that consumers preferred the sweeter taste of Pepsi. Coca cola had to do something to stop the loss of its market share, and the solution appeared to be a change in Coke’s taste. Coca-Cola began the largest new product research project in the company’s history. It spent $4 million on more than two years research before settling on a new formula. It conducted some 200,000 taste test on the final formula.

In order to produce superior value and satisfaction for costumers, companies need information at every turn. Good products and marketing programs begin with thorough understanding of consumer needs and wants. Companies also need an abundance information on competitors, resellers and other actors and forces in the marketplace.

Marketers are viewing information not only as an input for making a better decision but also as an important strategic asset and marketing tool. Competitor will not be able to duplicate the company’s information and intellectual capital.

In today’s more rapidly changing environments, manager need up to date information to make timely high quality decisions. Companies must design effective marketing information systems that give managers the right information, in the right form, at the right time to help them make better marketing decisions. A good marketing information systems consist of people, equipment, and procedures o gather, sort analyze, evaluate and distribute needed, timely, and accurate information to marketing decision makers.

Assessing Marketing Information Needs

The marketing information system primarily serves the company’s marketing and other managers. However, it may also provide information to external partners, such as suppliers or marketing services agencies.

A good marketing information system balances the information users would like to have against what they really need and what is feasible to offer. The marketing information system must monitor the marketing environment in order to provide decision makers with information they should have to make key marketing decisions. Sometimes the company cannot provide the needed information, either because it is not available or because of marketing information system limitations. For example, a brand manager might want to know how competitors will change their advertising budgets next year and how these will affect industry market share.

The cost of obtaining, processing, storing and delivering information can mount quickly. The company must decide whether the benefit of having additional information are worth the cost of providing it, and both value and cost are often hard to assess. Marketers should not assume that additional information will always be worth obtaining. They should weigh carefully the cost of additional information against the benefit resulting from it.

Obtaining Marketing Information

Marketers can obtain the needed information from internal data, marketing intelligence, and marketing research.

Internal data: Many companies build extensive internal data base. Internal data base is electronic collections of information obtained from data source within the company. Information in the database can come from many sources, for example, detailed record of sales, cost and cash flow from accounting department and costumer demographics, psychographics, and buying behavior from marketing department. Research studies done for one department may provide useful information for other departments.

Internal database usually can be accessed more quickly and cheaply than other information sources, but they also present some problems. Because it was collected for other purpose, it may be incomplete or in the wrong form for making marketing decisions. They ages quickly and keeping the database current requires a major effort.

The database information must be well integrated and readily accessible through user friendly interface so that managers can find it easily and use it effectively.

Marketing intelligence: Marketing intelligence is a systematic collection and analysis of publicly available information about competitors and development in the marketing environment.

Much intelligence can be collected from people inside the rival companies. For example, while talking with a Kodak copier salesperson, a Xerox technician learned that the sales person was being trained to service Xerox products. With this information, Xerox design a total satisfaction guarantee, which allow copier returns for any reason as long as Xerox did the servicing.

The company can also obtain intelligence information from suppliers, resellers, and and key consumers, or it can get good information by observing competitors. For example, one company regularly checks out competitors’ parking lots, full lots might indicate plenty of work and prosperity.

Competitor may reveal intelligence information through their annual reports, business publication, trade-show exhibits, press release, advertisement and web site. For example, Allied signal’s web site provides revenue, goals and reveal the company’s production defect rate along with its plan to improve it.

Marketing Research: In addition to information about competitor and environmental happenings, marketers often need formal studies (marketing research) of specific situations. Marketing research is a systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. Marketing research is very useful in a wide variety of situations. For example, marketing research can help marketers assess market potential and market share.

Some large companies have their own research department that work with marketing managers on marketing research project. This is how Kraft, Citigroup and many other corporate giants handle marketing research.

The marketing research project has four steps:

1. Defining the problem: Marketing managers and researchers must work closely together to define problems and agree on research objectives. Defining the problem and research objectives is often the hardest step in the marketing research. Careful problem definition would have avoided the cost and delay of doing advertising research.

   After the problem has been defined carefully, marketing managers and researchers must set the research objectives. A marketing research might have one of three types of objectives.

2. Exploratory research is to gather preliminary information that will help define the problem and suggest hypotheses.
3. Descriptive research is to describe things, such as the market potential for a product or demographics and attitudes of consumers who buy the product.
4. Causal research is to test hypotheses about cause and effect relationship.

The statement of the problem and research objectives guides the entire research process.

Developing marketing research plan: Once the research problems and objectives have been defined, researchers must determine the exact information needed, develop a plan for gathering it efficiently, and present the plan to management.

Research objective must be translated into specific information needs. For example, demographic, economic and lifestyle of product current users. Retailer reactions to the new packaging. Forecast of sales of new and current packages.

The research plan should be presented in a written proposal. A written proposal is especially important when the research project is large and complex or when an outside firm caries it out. To meet the manager’s information need, the research plan can call for gathering secondary or primary data.

Secondary data consist of information that already exist somewhere, having been collected for another purpose. Research is usually start by gathering secondary data. Companies can buy secondary data reports from outside suppliers. Using commercial online database, marketing researchers can conduct their own searches of secondary data sources.

Secondary data can usually be obtained more quickly and cheaply than primary data. But unfortunately, secondary data can also present problems. The researcher must evaluate secondary data information carefully to make certain it is relevant, accurate, up to date and impartial.

1. Primary data: Consist of information collected for specific purpose at hand. Secondary data provide a good starting point for research and often help to define problems and research objectives. In most case however, the company must also collect primary data.
2. Implementing marketing research plan: The researcher next puts the marketing research plan into action. This involves collecting, processing and analyzing the information. Researchers must process and analyze the collected data to isolate important information and findings. They need to check data for accuracy and completeness and code it for analysis. The researchers the tabulate the result and compute averages and other statistical measures.
3. Interpreting and reporting the findings: The market researcher must now interpret the findings, draw conclusion and report them to management. However, interpretation should no be left only to the researchers. They are often expert in research design and statistics, but the marketing manager is the one who should take and carry out the decision.

Analyzing Marketing Information

Information gathered in internal database and through marketing intelligence and marketing research usually requires more analysis. Information analysis might also involve a collection of analytical model that will help marketers make better decision. Marketing scientists have developed numerous models to help marketing managers make better marketing mix decisions, design sales territories and sales call plans, select sites for retail outlets, develop optimal advertising mixes, and forecast sales.

Distributing and using Marketing Information

Marketing information has no value until it is used to make better marketing decisions. Thus, the marketing information system must make the information available to the managers and others who make marketing decisions or deal with customers on day to day basis. But marketing managers may also need non routine information for special situations and on the spot decisions. Many firms use a company intra net to facilitate this.

In addition, companies are increasingly allowing key costumers and value network members to access account and product information and other data on demand on extra nets. Thanks to modern technology, today’s marketing managers can gain direct access to the information system at any time and from any location.