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Dr. S. Borna
MBA
671
Objectives
Components of a marketing information
system
 Criteria of good marketing research
 Decision support systems for marketing
management
 Demand measurement and forecast

What is information?
Input
data
Information
process
Output
info.
A Decision
with Attendant
uncertainty
The Expanding Role of
Organizational Information
1. Growth in size & complexity
of organizations.
2. Proliferation of staff groups
3. Improvement of information
technology
* 4. Shifts from local to national
and international markets
*5. Transition from buyer’s
need to buyer’s wants
*6. Transition form price to
non-price competition
*Important to marketers
A marketing information system (MIS) consists of
people, equipment, and procedures to gather, sort,
analyze, evaluate, and distribute needed, timely, and
accurate information to marketing decision makers.
Components of Marketing
Information System
(1) Marketing Intelligence system
A marketing intelligence system is a set of
procedures and sources used by managers to obtain
everyday information about developments in the
marketing environment.
(2)Accounting System
(Internal recording Systems)
Financial Accounting:
Deals with information reported to
people outside of the organization.
Managerial Accounting:
Deals with information reported
to people inside organization. What
price to charge for a product?
Whether to expand production facilities
(3)Marking Research
Is the systematic design, collection
analysis, and reporting of data and
findings relevant to a specific
marketing situation facing the
company
Marketing Research conducted:
1. Externally: Universities,
Research Firms etc.
2. Internally
Defining the Problem & Research
Objectives
Exploratory
Research
•Sheds light on problem suggest solutions or
new ideas.
Descriptive
Research
•Ascertain magnitudes.
Causal
Research
•Test cause- and-effect
relationships.
•Tests hypotheses about causeand-effect relationships.
Research Approaches
Observational
Focus-group
Survey
Behavioral
Experimental
Secondary-Data Sources
Internal Sources
 Government Publications
 Periodicals and Books
 Commercial Data
 On-Line

– Associations
– Business Information
The Marketing Research Process
Defining the
problem and
research
objectives
Developing
the research
plan
Present the
findings
Collect the
information
Analyze the
information
Good Marketing Research:
Is scientific (do not fall in love with your
model)
 Is creative
 Uses multiple methods
 Realizes the interdependence of models &
data
 Acknowledges the cost & value of
information
 Maintains “healthy” skepticism
 Is ethical

(4) Marketing Decision Support System
(MDSS)
MARKET MEASUREMENT
Why to measure “Market”?
Why managers need to
understand market measurement
procedures?
a) Managers may have to do their
own market measurements;
b) To specify the information they
will need;
c) To be aware of the limitations
of market measurement
methods.
WHY MEASURE MARKET?
Which market to target?
What resources to allocate?
Is company’s sale performance
on a segment by segment
satisfactory?
Ninety Types of Demand
Measurement (6 x 5 x 3)
World
Space
U.S.A.
level
Region
Territory
Customer
All sales
Industry sales
Company sales
Product
level
Product line sales
Product form sales
Product item sales
Short run
Medium run Long run
Time level
What do we mean by the
term market?
Market? Potential Market? Available
Market? Qualified Market? Etc.
BASIC TERMINOLOGIES
Market
Demand
Potential
Forecast
Company
Market
Demand
Company
Demand
Market
Potential
Company
Potential
Market
Forecast
Company
forecast
Demand
Company
Demand
Market
Demand
Market demand for a product
is the total volume that would
be bought by a defined
customer group in a defined
geographical area in a defined
time period in a defined
marketing environment under
a defined marketing program.
Estimating Current Demand
Total Market Potential
 Area Market Potential
 Industry Sales
 Market Share

MARKET POTENTIAL DEFINED
Is an estimate of maximum
possible sales of a product
for an entire industry during
a stated period.
MARKET FORECAST DEFINED
A demand estimate based on
the most likely level of
industry expenditures on the
marketing programs currently
in effect.
Market potential and
Forecast
Market potential
Market forecast
Market minimum
Assumes a
given marketing
effort and
time period.
Expected effort
A note on Possible Essay Question!
Plan
Forecast
(Plan marketing activities then forecast
sales)
Forecast
Plan
(forecast sales then plan marketing
activities)
USES OF MARKET POTENTIAL
DATA
1. Determination of market entry
2. Location and size of new sales
offices, warehouses, and plants
3. Determination of trade channels
4. Determination of sales territories
5. Determination of sales quotas
6. Allocation of advertising efforts.
ASSUMPTIONS
“LARGE T.V. SCREEN”
36-INCH AND OVER
PERCEIVED QUALITY
PRICE
WARRANTIES
LIMITATIONS OF MARKET
POTENTIAL
1. Does not say anything about
competitive nature of the market.
2. Measurement problems
3. Etc.
ABSOLUTE MARKET
POTENTIAL
Total market potential
D=NPQ
D=total market potential
N=no. of buyers in a given market
Q=Quantity purchased
P=Price
MULTIPLE FACTOR INDEX
METHOD:
BUYING POWER INDEX
B = .5 Y + .3R + .2 P
i
i
i
i
Note: There are several other methods
available for measuring market potential
Estimating Future Demand
Survey of Buyers’ Intentions
 Composite of Sales Force Opinion
 Expert Opinion
 Past Sales Analysis
 Market Test Method

ESTIMATING FUTURE DEMAND
3 FORECAST INFORMATION
BASES:
1. WHAT PEOPLE SAY
2. WHAT PEOPLE DO
3. WHAT PEOPLE HAVE
DONE
WHAT PEOPLE SAY
1. Survey of buyer intentions
is appropriate if:
No. of buyers are few
Cost of reaching them is low
Intentions are well defined
Willing to disclose their
intentions. Buyers implement
their intentions
2. Composite of Sales force
Opinions
3. Expert Opinions
4. Executive Opinions
WHAT PEOPLE DO
MARKET-TEST METHOD?
What Markets?
How Many Markets?
How Long?
What Information?
WHAT PEOPLE HAVE DONE
TIME-SERIES ANALYSIS
TREND ANALYSIS (T)
CYCLE (C)
SEASON (S)
ERRATIC (E) EVENTS
STATISTICAL DEMAND
ANALYSIS
Review
Components of a marketing information
system
 Criteria of good marketing research
 Decision support systems for marketing
management
 Demand measurement and forecast
