The subparts or subsystems of MIS are termed as its components. Generally, there are 4 types of interrelated and interdependent components of marketing information system i.e.
- Internal System related to Records
- System Related to Marketing Research
- Market Intelligence-Based System
- Marketing Related Decision Support System (MDSS)
A detailed explanation of all the above 4 components are described below:
Internal System related to Records or Reports
One of the major components of the marketing information system is an internal record or report system which is a source of information that is easily accessible. It includes all marketing operations related reports or records that are available in an organization.
The main functioning of this system includes the collection of required information from records of different internal departments of the organization and further analyzing, interpreting, and disseminating the collected information. The internal record system takes care of the regular circulation of information within the organization at fewer efforts and costs.
The main sources of this type of information include different sales and purchase records, salesforce related reporting system, inventory stock information, debits and credits, marketing personnel, past research data and other reports of an organization.
Different other internal records like orders received, sales invoices, and stockholdings are also key information resources for marketing decisions. Different types of information like product type, size, sales volume, etc. can be derived from the sales invoice.
Few organizations manage internal record system through MIS committee who is responsible for:
- Determining different information sources required to collect and analyze information.
- Taking requests from managers for information required by them.
- Grievance handling of employees.
Marketing Intelligence-Based System
Unlike the Internal Record and Report System, Marketing Intelligence System facilitates organizations with information related to the external marketing environment.
This system includes processes and sources that managers use to acquire regular information related to the external marketing environment. Different methods can be used by managers to obtain different external market information i.e.
- Print media like newspapers, and other publications
- Television, radio, and Internet
- Conversation with customers, suppliers, etc.
- Information purchased from professional sources
If a marketing intelligence-based system is effective then it can help managers in taking quick actions related to competitors, customer’s preference changes, sorting out supplier’s issues, etc.
System Related to Marketing Research
The Marketing Research System of MIS is not only the most powerful component, but it is an independent component as well. Detailed information is required by managers in some circumstances to address specific issues of a particular marketing area. So, this system includes a formal study related to issues or opportunities. Its main purpose is to sort out different specific issues.
Philip Kotler has defined marketing research as a systematic design for collecting, analyzing, and reporting of data that is relevant to particular marketing circumstances of an organization. The marketing research system includes both primary and secondary data collection using different tools and methods for a certain time period. It also consists of data analyzing and further representing the findings in a report form.
Marketing Decision Support System (MDSS)
Unlike the above 3 components of the marketing information system which are more related to the supply of data or information; the marketing decision support system (MDSS) is related to processing and analysis of data that is available through the above 3 components. This component of MIS can be helpful in the improvement of efficiency and utilization of the entire MIS.
This system is beneficial for managers to make better decisions. According to John D.C. Little, MDSS is related to data collection and analysis, techniques and procedures that also includes related software and hardware which an organization uses to collect and interpret required information from the environment and utilize that information for marketing decisions.
As per the above definition, the MDSS consists of different tools and techniques that are useful for the purpose of:
- Collection of data
- Analysis of data
- Results interpretation
- As a support tool in managerial decisions
MDSS is viewed as an extension of the other 3 components rather than a separate identity. Different software or statistical tools are useful for marketing managers in the smooth functioning of their operations i.e. analyzing, planning, and controlling. There are two sub-components of the MDSS i.e.
a) The Statistical Bank
It includes quantitative tools that help in the marketing decision-making process. It is also termed as Operations Research.
Different statistical tools that are used for analyzing data are:
- Simple statistical methods like averages, median, mode, etc.
- Regression-multiple regression analysis
- Discriminate analysis
- Factor analysis
- Correlation analysis
- Cluster analysis
- Conjoint analysis
- Input-output analysis
- Multidimensional scaling, etc.
b) The Model Bank
This subcomponent consists of models to support decisions. These models and software help managers to take effective marketing decisions. Different models that are used often include:
- The Markov-Process Analysis
- Queuing Model
- New Product Pretest Models
- Sales Response Model
- Discrete Choice Model
- Differential Calculus
- Mathematical Programming
- Statistical Decision Theory
- Game theory, etc.