4.05 – 4.06 – 4.07

4.05 – 4.06 – 4.07 Marketing Information Get the Facts Straight! Business Communication

MARKETING INFORMATION Consider for a moment the many types of decisions marketers are required to make. Depending on each person’s primary responsibilities, s/he might choose the best target markets for new products, select advertising media for existing products, or even specify products to be discontinued. Now, how do you think that marketers make decisions such as these?

MARKETING INFORMATION Do they base their decisions on gut instinct? Rather than relying on their own personal knowledge of problems, marketers base their decisions on reliable, relevant marketing information. And, where do they get this information? From a marketing-information management system.

MARKETING INFORMATION Marketing information is data available from inside and outside a business. In fact, most businesses today wouldn’t survive without marketing information. Businesses need marketing information to make educated decisions, solve problems efficiently, and plan for the future.

MARKETING INFORMATION Such information helps marketers learn about the markets they serve, what products are working in those markets, how well those products are working, why the products are successful, and how much impact price has on customers’ buying decisions.

MARKETING INFORMATION Also, marketing information helps marketers to understand what has happened in the past, what is going on now, and what to expect in the future. With such knowledge, marketers can increase their businesses’ profits by improving sales and reducing losses.

MARKETING INFORMATION Marketing data can be used to generate all kinds of helpful marketing information. This information might include details about products, vendors and suppliers, pricing, promotional effectiveness, customers, competitors, economic trends and conditions, and countless other items.

MARKETING INFORMATION For instance, marketers often look to marketing information to learn more about their customers, including where they live, what they need, and what they want. Marketing information can also give marketers clues about how their competitors are doing, what these competitors are offering, and how good the competitors’ products really are. Marketing information, in other words, takes a lot of guesswork out of marketers’ jobs.

MARKETING INFORMATION There are two different categories of marketing information and information sources—primary and secondary. Both categories of information help marketers to learn more about their markets. However, there are some rather significant differences between them. Primary information is developed from data that are collected for use in one particular situation.

MARKETING INFORMATION These primary data are gathered in a systematic manner to solve a problem, to explore an opportunity, or for any other specific purpose useful to a business. For example, a business that is planning to introduce a new product might survey prospective customers to determine demand for the product. Some ways in which primary data are gathered in virtual and physical worlds include questionnaires, focus groups, personal interviews, and test markets.

MARKETING INFORMATION Secondary information, on the other hand, comes from data that have already been collected for other purposes. These data are popular with marketers because they can be obtained quickly and less expensively than primary data. Checking the secondary data can help a person to have a better understanding of a problem and to think of ways to handle the situation.

MARKETING INFORMATION Reviewing customer-service phone logs, for instance, might help a marketer to pinpoint issues that customers are experiencing with a particular product along with possible ways to resolve these issues. Some types of secondary data are company reports and records, as well as reports prepared by government agencies, trade associations, or research institutes.

DOES IT HAVE THE RIGHT STUFF? Keep in mind that not all types of marketing data and information will be equally useful or beneficial for all businesses. Some businesses may rely on secondary data for most of their needs. Other businesses, though, may find it necessary to gather primary data on a regular basis. Regardless of the type or need, all marketing information should share the following characteristics: • Organized. Marketing information should consist of precise data, facts, and figures presented in an orderly fashion. Exact, easy-to-understand information is much more likely to help marketers. • Accurate. The information should be error-free and reliable. Both positive and negative data should be included.

DOES IT HAVE THE RIGHT STUFF? • Sufficient. Enough data must be gathered to truly help marketers. Too little data can give a distorted picture of the real situation and be misleading. At the same time, too much data and information can present too many alternatives and cause confusion.

DOES IT HAVE THE RIGHT STUFF? • Relevant. The information must be closely related to the situation at hand to be of the most use to marketers. • Timely. The marketing data and information must be up-to-date. The data must be gathered at a time when they will be of the most value to the business. This means that the data should not be collected too early or too late. • Accessible. The marketing data and information should be readily available so that they can be gathered and used without major effort or excessive cost.

DOES IT HAVE THE RIGHT STUFF? • Cost-effective. The benefits of using the marketing information should be greater than the costs of gathering the data that are used to generate this information. If the marketing information cannot provide greater benefits to the user, then the corresponding data are not worth gathering or processing. The marketing environment is constantly changing. Marketers need information in order to keep up with these rapid changes. Other reasons that marketers must gather information include an increasing geographic scope for businesses, hard-to-please consumers, and increasing competition.

BRINGING IT ALL TOGETHER. To gather, analyze, and organize all of the marketing data and information that it needs, virtually every business uses a marketing-information management system. Many marketing-information management systems are computerized. However, some are not. In fact, an MkIS should encompass much more than just technology. An MkIS consists of all the people, policies, procedures, and equipment involved in managing a business’s marketing information.

BRINGING IT ALL TOGETHER. Each business must decide what the functions of this marketing-information management system will be. The system’s functions will depend upon the decisions that need to be made and the information needed to make those decisions. Most marketers, though, need certain functions to be filled by the MkIS. These include data gathering, data processing, and information reporting.

BRINGING IT ALL TOGETHER. • Data gathering. The basic function of a marketing-information management system is to gather data important to the business. These data should be gathered from both internal and external sources on an ongoing basis. Internal data are relatively easy and inexpensive to collect. They are found inside a business.

BRINGING IT ALL TOGETHER. • (ERP) system. An ERP system consists of a common database that holds all of the facts and figures created or received during normal business operations. These data may come from any of an organization’s business functions, such as marketing, operations, finance, or even human resources. • The data in an ERP system can be accessed by anyone or anything in the organization that might have need for them, including marketing-information management. Some common types of internal data are operating data, sales reports, and inventory data.

BRINGING IT ALL TOGETHER. • External data come from sources outside the business. There are a variety of these sources, including the chamber of commerce, federal and state planning agencies, trade journals, on-line databases, and commercial, syndicated services. Businesses also obtain external data by conducting marketing research, which is one component of marketing-information management.

BRINGING IT ALL TOGETHER. • Marketing research is the systematic gathering, recording, and analyzing of data about a specific marketing problem or situation. Such research may be needed when the existing data in the MkIS are insufficient or do not apply to the problem at hand.

BRINGING IT ALL TOGETHER. Another method for obtaining data is through a marketing intelligence system. A marketing intelligence system is often used to informally gather helpful data from both internal and external sources. While marketing research typically focuses on one specific problem, marketing intelligence may or may not relate to any current issue or project.

BRINGING IT ALL TOGETHER. For example, a marketer might run across some useful data while participating in a trade-related webcast. Another marketer might also discover marketing data while conversing with suppliers or customers. Some other internal and external sources may include salespeople, drivers, receptionists, newspapers, competitors’ websites, and mystery shoppers.

BRINGING IT ALL TOGETHER. • Data processing. Analyzing the data collected and putting them into formats useful to a business are important functions of the MkIS. Remember, data are typically not useful in their original form. An MkIS is responsible for transforming these data into much more understandable, organized marketing information. Think about financial records from the accounting department. They would need to be adapted significantly for use in evaluating product performance.

BRINGING IT ALL TOGETHER. • Information reporting. A third important function of the marketing-information management system is handling the flow of information within a business. The system should distribute the necessary information to those who need it. It should make it easy to locate and retrieve information at any time.

BRINGING IT ALL TOGETHER. • Marketing-information managers can protect the integrity of the information they collect by interpreting it correctly and not manipulating it in such a way that it agrees with a predetermined conclusion. Protecting the integrity of marketing information is sometimes difficult because researchers often can make the information support either side of an issue depending on how they interpret it.

BRINGING IT ALL TOGETHER. • Most researchers try to interpret the information correctly because consumers are sometimes suspicious of research findings that seem to support the opinions of the business that sponsors the research.

BRINGING IT ALL TOGETHER. Marketing Information may be developed from either quantitative or qualitative data. Do you know the difference? Quantitative data are numerical. Qualitative data, on the other hand, focus on opinions and personal interpretations. 59% 12,000 A marketing-information management system provides marketers with the right information at the right time in the right form. I was satisfied with . . . I did not like . . .

INTRANET Have you heard of an Intranet? It is an internal network similar to the Internet that is commonly used with an organization to access information and communicate with others. Typically it’s accessible only by authorized personnel. Many businesses use an Intranet to allow managers, marketers, and salespeople to retrieve and add information in the MkIS.

FORECASTS Because virtually all other company plans are built on forecasts of future revenue, the marketing information used to prepare these sales forecasts must be as accurate as possible. Inaccurate information could lead to skewed forecasts that could jeopardize the very existence of the company.

SUMMARY - MkIS • Marketing-information management systems benefit marketers in many ways. These ways include collecting and presenting marketing information in an organized fashion; giving a broader perspective of the market; providing information that may help to prevent a business crisis; and helping marketers to improve their planning.

SUMMARY - MkIS • Marketers often use marketing-information management systems when making business decisions; determining market opportunities; developing sales forecasts; evaluating promotional strategies; conducting situation analyses; determining profitability; reducing risk; and learning about competitors. • Regardless of how an MkIS is used, it helps the business to be profitable and/or meet its objectives and to develop a competitive advantage in the marketplace.

CONFIDENTIALITY • Confidentiality involves preventing the unauthorized disclosure of information. In the process of collecting marketing information, researchers often obtain private and personal information that is unethical to use or share with others without permission. • Researchers need to respect client and respondent confidentiality by making sure that the information they collect and use remains confidential unless they receive explicit approval to reveal it to others.

NOT CONFIDENTIALITY • Standardization involves always performing a task in the same way. • Adaptability is the ability to adjust to changing conditions. • Commercialization is the point at which a product goes into full-scale production, the marketing plan is put into place, service and sales training are done, and the product's life cycle begins.

CONFIDENTIALITY • Businesses should not undertake any non-research activities involving data collected. Researchers must not undertake any non-research activities such as database marketing involving data about individuals that will be used for direct marketing or promotional activities. • Such activities must be organized and carried out in a manner clearly differentiated from research activities. Databases contain reliable information. Consumers expect such information to be used for research rather than advertising. The company should use the information only as intended.

COST EFFECTIVENESS • Marketing information must provide greater benefits to the user than the expense of gathering the data used to generate this information. If the marketing information cannot provide greater benefits to the user, then the corresponding data are not worth gathering or processing. • Timely data and information are up-to-date, so the data must be gathered at a time when they will be of the most value to the business. Accessible information is readily available so that it can be used without major effort or excessive cost. Marketing information should be relevant—closely related to the situation at hand.

LETTER OF INQUIRY • The function of a letter of inquiry usually is to make a request. Businesspeople often write letters of inquiry to request an appointment with a current customer or a potential customer, particularly if that customer is located out of town. • For example, a businessperson might write several letters requesting appointments with various customers before arranging a sales trip. • An acknowledgement letter would be written to acknowledge the receipt of an order. • A claim letter would be written to complain about a problem with a product. • A transmittal letter would be written to accompany a document being sent by mail.

LETTER OF INQUIRY • Inquiries should be direct so that the recipient immediately knows what the inquiry is about. Start with the purpose of the inquiry before describing your company, project, or what prompted the inquiry. • Delayed statement of your purpose (whether later in the letter or requesting a separate meeting) makes it more difficult for the recipient to understand the inquiry.

SURVEYING CUSTOMERS • By surveying customers, the business can determine where the people who are interested in buying its products are located (LOCATION OF THE MARKET). • Information about the company's market share and plans to improve current products can be obtained from the company's ownrecords. • The financial status of competitors is only available if they operate as a corporation and must report their finances to shareholders, or they are in a situation that requires them to disclose their financial resources.

REVIEW

34. (2) What is a reason why a businessperson might write a letter of inquiry? • A. To forward a document • B. To request an appointment • C. To acknowledge an order • D. To complain about a product

35. (2) When writing a letter of inquiry, when should you identify the purpose of your letter? • A. Once the recipient has agreed to meet with you • B. After describing your company • C. At the beginning of the letter • D. After identifying what prompted your inquiry (such as an advertisement)

36. (2) What is an example of marketing information that a business could gather by surveying its customers? • A. Planned product improvements • B. Location of the company's market • C. The company's current market share • D. Financial status of competitors

37. (2) Which characteristic of useful marketing information is represented by the statement "The benefits of using the information should be greater than the expense of gathering the data used to generate this information"? • A. Timeliness C. Relevancy • B. Accessibility D. Cost-effectiveness

38. (2) Why do marketers continue to gather information? • A. Today's consumers are easy to please. • B. The marketing environment is constantly changing. • C. Marketers are decreasing their geographic scope. • D. Competition in general has decreased.

4.05 – 4.06 – 4.07

4.05 – 4.06 – 4.07

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