Blog 2 (Chapter 3, 4)

Chapter 3

A marketing information system (MkIS) is a management information system (MIS) designed to support marketing decision making. Jobber (2007) defines it as a "system in which marketing data is formally gathered, stored, analyzed and distributed to managers in accordance with their informational needs on a regular basis."

The system draws from data based on internal company records, marketing intelligence and marketing research. Marketing managers rely on internal reports and databases of all sorts in order to spot important opportunities and potential problems.

At the heart of internal records system is the order-to-payment cycle; sale representatives, dealers and customers send orders to the firm then the sales department prepares invoices and transmits copies to various departments and back orders out of stock items. The shipped items generate shipping and billing documents that will be distributed to various departments. Accuracy and rapidity is key because customers will favor firms that quickly deliver their services.

Marketing managers need real time and accurate reports on current  sales, and sales data must be carefully interpreted so as not to draw the wrong conclusions. Such timely and accurate information helps managers make evidence based decisions.

Companies organize information into customer, product and salesperson databases. Data warehouses are then created which contain personal information of customers such as their past transactions, demographics and psychographics (activities, interests, and opinions). The data is mined and it garners fresh insights into neglected customer segments, recent customer trends, customer loyalty and other important and useful information.

I want to conclude that the advances in information technology and innovation in marketing systems are boosting the ability of marketing managers by giving them an opportunity to react much faster to their customer needs and end up with closing the sale successfully and customer satisfaction.  Gone are the days when the marketing manager had to wait for weekly reports from sales manager.

Chapter 4

Companies use information about customers to enact precision marketing designed to build strong, profitable long-term relationships.  Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer touch points to maximize loyalty.  

A touch point is any occasion on which a customer encounters the brand and product from actual experience to marketing communications to casual observation. For example for hotels the touch points include reservations, check-in, and checkout, frequent –stay programs, room service, business services, exercise facilities and restaurants.

CRM enables companies to provide excellent real time customer service through the effective use of individual account information. Based on what they know about each valued customer, companies can customize market offerings, services, programs, messages, and media. CRM is important because a major driver of company profitability is the aggregate value of company’s customer base. Don Peppers and Martha Rogers outline a framework for one- to- one  marketing that can be adapted to CRM marketing as follows:

Identifying prospects and customers:  building individual relations is key, maintaining, and mining a rich customer database with information from all the channels and customer touch points.

Differentiating customers in terms of: (1) their needs and (2) their value to the company. Spend proportionately more effort on the most valuable customers. Calculate customer lifetime value and estimate net present value of all future profits from purchases, margin levels, and referrals, less customer-specific servicing costs.

Interact with individual customers to improve knowledge about their individual needs and build stronger relations. Facilitate customer interaction through the company contact center and website.

Customer products, services and messages to each customer are customized and personalized.

In my view companies are now moving away from wasteful mass marketing to more precision marketing designed to build strong customer relationships. Today’s economy is supported by information businesses. Information has the advantages of being easy to differentiate, customize, personalize, and dispatch over networks at incredible speed.