Principles of Marketing (BBA 204) Unit 4

Unit IV:

Marketing Information System (MIS):

Marketing Information System (MIS) is a permanent arrangement (system or setup) for provision of regular availability of relevant, reliable, adequate, and timely information for making marketing decisions.

Information is like a life-blood of business. Quality of decisions depends on the right type of information. The right information implies the right quality, the right quantity, and the right timing of information. Circulation of needed information is as important as the circulation of blood in human being.

Information keeps the organisation actively functioning, alive, and connected with internal and external marketing participants. It is a valuable asset for a firm as it is a base to manage other valuable assets. The firm fails to manage information (i.e., collecting, analyzing, interpreting, storing, and disseminating of information) will definitely fail to attain goals.

Definition: “A marketing information system is a continuing and interacting system of people, equipment’s, and procedures to gather, sort, analyze, evaluate, and distribute the pertinent, timely, and accurate information for use by marketing decision-makers to improve their marketing planning, implementation, and control.”

Philip Kotler gives alternative definition, such as: “A marketing information system (MIS) consists of people, equipment’s, and procedures to gather, sort, analyze, evaluate, and distribute the needed, timely, and accurate information to marketing decision makers. So we can say, Marketing Information System (MIS) is a permanent arrangement (system or setup) for provision of regular availability of relevant, reliable, adequate, and timely information for making marketing decisions.

Components of MIS:

MIS is made of parts, subparts or subsystems which are called the components. Typically, according to Philip Kotler, a marketing information system consists of four interrelated components – Internal Reports (Records) System, Marketing Research System, Marketing Intelligence System, and Marketing Decision Support System, as shown in Figure 1. All components are interrelated and interdependent.

1. Internal Records System:

Internal records system is a major and easily accessible source of information. It supplies the results data. It consists of all records of marketing operations available within organisation. This system concerns with collecting, analyzing, interpreting, and distributing needed information from records of various departments of the company.

Main sources include various records on sales and purchase, ordering system, sales force reporting system, inventory level, receivable-payables, marketing staff, costs, the past research works, and other literatures/reports available within organisation. Particularly, for sales orders and sales force reporting, the computer technology is excessively used for accurate, efficient, and speedy transmission of information.

To manage the internal record system, some companies appoint internal MIS committee to deal with all aspects of internal information.

The committee:

(1) Attends request for all type of information required by managers,

(2) Determines sources of the information and tools needed to collect, evaluate, and analyze information,

(3) Deals with presenting, distributing and updating the information,

(4) Handles complaints of employees , and

(5) Performs all types functions related to information.

Internal records system keeps regular circulation of the information throughout the organisation without much expense and efforts. Managers can get the up-to-date information about marketing operations. Once the system is set up properly, it can serve the purpose continually.

2. Marketing Intelligence System:

While internal report system concerns with information available from internal records of organisation, the marketing intelligence system supplies the managers with happening data. It provides information about external happenings or external environment. Marketing intelligence system is:

The set of procedures and sources used by managers to obtain every-day information regularly about pertinent developments in the marketing environment. A manager can try to expose external environment in various ways.

Marketing intelligence system consists of various methods.

A manager can use one or more below mentioned methods:

i. Reading newspapers, books, and other publications.

ii. Watching TV, hearing radio, or Internet surfing.

iii. Talking to customers, dealers, suppliers, and other relevant parties.

iv. Talking to other managers and employees of his company as well as of other companies.

v. Maintaining live contacts with other officials and agencies.

vi. Purchasing useful information from professional sources.

vii. Assigning marketing intelligence task to professional agencies, etc.

Effective marketing intelligence system can facilitate managers to take immediate actions like reacting to competitors, meeting changing needs of customers, solving dealers’ problems, and so on.

3. Marketing Research System:

Marketing research is a powerful and independent branch of the MIS. In certain cases, managers need detailed information on the specific problem of the specific marketing area. Thus, it is a formal study of specific problems, opportunities, or situations. Normally, it is carried out for solving the specific problem.

In this sense, it is not a part of routine activity. It collects need-based information. Nowadays, it is treated as the separate discipline or subject. Philip Kotler defines: “Marketing Research is the systematic design for collection, analysis, and reporting of data and findings relevant to specific marketing situations facing the company.”

Marketing research consists of collecting primary and secondary data from various respondents using various tools through various methods for definite period of time, analyzing data using appropriate statistics tools, and presenting findings in forms of a report. It is conducted by internal expert staff or external professionals. 

4. Marketing Decision Support System (MDSS):

Previously, the component was known as Analytical Marketing System. While former three components supply data, the marketing decision support system concerns more with processing or analyzing available data. This component can improve efficiency and utility of the whole marketing information system.

The system is used to help managers make better decisions. John D. C. Little defines: “A marketing decision support system (MDSS) is coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organisation gathers and interprets relevant information from environment and turns it into a basis for making decisions.”

According to the definition, the MDSS includes tools, techniques or models used for:

(1) Data collection,

(2) Data analysis,

(3) Interpreting results, and

(4) Supporting managerial decision-making.

Goods Marketing vs Service Marketing

Marketing of products and services involves different strategies due to the dissimilarities in their characteristics. While in product marketing, the aim is to fulfil the needs and wants of the target population.  As against, in service marketing, the firm seeks to create a good relationship with the customer, to win their trust.

The two most important activities undertaken by the business is production or procurement of products and its distribution to the end user. The procurement of raw materials and its conversion into a finished product is an easy job. However, the disbursement of the product is a strenuous one, because creating a place for a product in the market is a bit difficult task, as the market is already flooded with lacs and lacs of products, where no one knows about your product and in this way the marketing comes into the picture.

Nowadays, marketing is not confined to the product, but services, ideas, property, experiences and even people are marketed. The marketing activities are aimed at creating an impression of the product or service in the consumer mind, in such a manner, that your brand becomes a synonym for that particular product or service. Here, in this article, we are going to talk about the differences between product and service marketing, read carefully.

Definition of Product Marketing

The entire process, right from the market analysis, to delivering product to the customer and receiving feedback, is called product marketing. The process is aimed at finding out the right market for its product and its placement in such a way that it gets good customer response. It entails promotion and sale of a product to its target audience, i.e. prospective and existing buyers.

Various activities involved in the product marketing involves analysis of the market, identification of consumer demand, designing and development of product, pricing, pitching of a new product, communicating, advertising, positioning, distributing, selling, review and feedback.

Example: Marketing for tangible objects like books, handbags, laptops, mobiles, clothes and so on.

Definition of Service Marketing

When a person or business entity promotes services it offers to its customers or clients, it is known as service marketing. It is aimed at providing solutions to the problems or difficulties of the clients. It includes both business-to-business (B2B) and business-to-consumer (B2C) marketing.

A service is an act of performing something for someone in exchange for adequate consideration. It is intangible, consumed at the time of its production, can’t be inventoried and resold. Each service offering is unique in itself because it cannot be repeated exactly alike, even if the service is rendered by the same person.

Example: Marketing of professional services, beauty parlours or salon, spa, coaching centres, health services, telecommunication, etc.

Comparison between Product Marketing & Service Marketing

BASIS FOR COMPARISON	PRODUCT MARKETING	SERVICE MARKETING
Meaning	Product marketing refers to the process in which the marketing activities are aligned to promote and sell a specific product for a particular segment.	Service marketing implies the marketing of economic activities, offered by the business to its clients for adequate consideration.
Marketing mix	4 P's	7 P's
Sells	Value	Relationship
Who comes to whom?	Products come to customers.	Customers come to service.
Transfer	It can be owned and resold to another party.	It is neither owned nor transferred to another party.
Returnability	Products can be returned.	Services cannot be returned after they are rendered.
Tangibility	They are tangible, so customer can see and touch it, before coming to the buying decision.	They are intangible, so it is difficult to promote services.
Separability	Product and the company producing it, are separable.	Service cannot be separated from its provider.
Customization	Products cannot be customized as per requirements.	Services vary from person to person, they can be customized.
Imagery	They are imagery and hence, receive quick response from customers.	They are non-imagery and do not receive quick response from customers.
Quality comparison	Quality of a product can be easily measured.	Quality of service is not measurable.

Marketing Banking Service:

A bank is a financial institution licensed by a government. Its primary activities include borrowing and lending money.Banks no longer restricted themselves to traditional banking activities, but explored newer avenues to increase business and capture new market.

-In the 1990s, greater emphasis being placed on technology and innovation.

-New concept like personal banking, retail banking, total branch automation, etc were introduced

Banks’ activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.

Banks offer many different channels to access their banking and other services-

1- Bank branch

2- ATM

3- Mail

4- Telephone banking

5- Online banking

6- Mobile banking

7- Video banking

New innovative method of marketing services used by banking sector

1- E-banking-Enables people to carry out most of their banking transaction using a safe website which is operated by their respected bank.

2- Core banking- it include knowing customer needs. Depositing and lending of money. Providing core banking solution.

3- Corporate banking- it includes providing financial solution to large corporate and MNC’s.

4- Mobile banking- it helps in balance inquiry, fund transfer, cheque book request etc.

5- Plastic money-Plastic money are the alternative to the cash or standard money, it is convinent to carry and generic term for all types of bank cards, debit cards, credit cards, smart cards.

6- NRI banking-This facility is designed for diverse banking requirements of the vast NRI population spread across the globe.

7- TOTAL BRANCH AUTOMATION-this is one of the latest towards paper less transactions, it is more customer friendly and flexible that has speed up bank transaction and with less error possibility.

Marketing mix of banking sector

The marketing mix of banking sector includes 7 p’s that are explained below so that they can understand their customers better and provide them good services.

Products

BANKS PRODUCTS:

(A) DEPOSITS: Savings, Current, Fixed etc.

(B) ADVANCES:a) Term Loan,b) Clean Loan, c) Bills Discounting, d) Advances, e) Pre-shipment Finance, f) Post-shipment finance, g) Secured and Unsecured lines of credit.

(2) Non-fund oriented: a) Guarantees, and b) Letter of Credit.

(C) INTERNATIONAL BANKING: a) Letter of Credit, and b) Foreign Currency.

(D) CONSULTANCY: a) Investment Counselling, b) Project Counselling, c) Merchant Banking, and d) Tax Consultancy.

(E) MISCELLANEOUS: a) Traveller Cheques, b) Credit card, c) Remittances, d) Collections, e) Sale of Drafts, f) Standing instructions, and g) Trusteeship.

Price-

The price mix in the banking sector is nothing but the interest rates charged by the different banks.

Let’s understand this with an example. A particular buyer approaches for a car loan say for a period of 3 years. He is charged Rs. 20,000 as interest. however if a sales representative of another bank comes to know of this deal he will try to attract the customer by giving him a better deal that is a loan at a lower rate on interest. In this way due to the high level of competition the customer benefits.

Pricing

This type of pricing is mainly done by banks having unique or different products or schemes. They usually charge a combination of high and low prices depending on the customer loyalty as well as the products. This type of pricing strategy is usually coupled with promotion programmes.

-Going rate pricing:

-Mark up pricing:

Place

Place mix is the location analysis for banks branches. There are number a factors affecting the determination of the location of the branch of bank. Like population characteristics, commercial, proximity of other commercial outlets.

Promotion

Promotion is nothing but making the customer more and more aware of the services and benefits provided by the bank.

Tourism Services Marketing: Tourism is a service sector which earns a substantial foreign exchange to developing countries. Tourism has many components comprising 

1. Travel experience

2. Accommodations

3. Food

4. Beverage services

5. Shops

6. Entertainment

7. Aesthetics and

8. Special events

Let us discuss each component of tourism marketing mix one by one

1. Product: Product in Tourism is basically the experience and hospitality provided by the service provided. In general the experience has to be expressed in such a way that the tourists see a value in them.

2. Process: The process in Tourism include, (a) trip planning and anticipation, (b) travel to the site/area, (c) recollection, (d) trip planning packages. The trip planning packages include, maps, attractions enroute and on site, information regarding lodging, food, quality souvenirs and mementoes

 3. Place and Time – Location and Accessibility : The place and time in tourism is providing directions and maps, providing estimates of travel time and distances from different market areas, recommending direct and scenic travel routes, identifying attractions and support facilities along different travel routes, and informing potential

customers of alternative travel methods to the area such as airlines and railroads.

4. Productivity and Quality: This is similar to other service industries. The quality is assessed by time taken for a service, the promptness of the service, reliability and so on. 

5. Promotion and Education :Like other services, the promotion should address, the accurate and timely information helping to decide whether to visit target audience, the image to be created for the organization, objectives, budget, timing of campaign, media to be selected, and evaluation methods. 

6. People: People is the centre for Tourism. It is more a human intensive sector. For hospitality and guest relations it is very important to focus on people. It also plays a vital role in quality control, personal selling, and employee morale. 

7. Price and other user costs :The price of the tourism services depend on business and target market objectives, cost of producing, delivering and promoting the product, willingness of the target, prices charged by competitors offering similar product/service to the same target markets, availability and prices of substitute products/services, and economic climate. The possibility of stimulating high profit products/services by offering related services at or below cost. 

  

8. Physical Evidence :In Tourism the physical evidence is basically depends on travel experience, stay, and comfort. Here, the core product is bed in case of stay. 

Insurance Marketing:

Marketing in the insurance market plays a key role to meet supply and demand, because insurance products are products that are not seen, not touched, but exist only in the form of pledges. Selling a promise requires a confidence, a belief that the service provider will be realized if the loss will occur. In any other economic or economic subject, whether manufacturer or service does not have such kind of product. Marketing insurance plays a manifold, on the one hand made product promotion security , then raise the awareness of citizens about models of protection from risks , increased reliability to consumers , the cost of paying for the promise given by the insurer if a loss occurs will accomplished.

The participants in insurance industry are:

1. The Insured (individuals, families, businesses, society etc.),

2. Insurance intermediaries (agents, brokers etc),

3. The Insurer (the coverage provider),

4. User (compensating claim).

The specificity of the insurance market is that insurance product created itself on providing contract, which means selling that product. To say that this is the specific area of insurance when considering their economic activity and by product (services) offered by the insurer (insurance company) insurance market. Insurance company - insurer, in this case sells "safety", to which the insured during his business realizes the fulfillment of obligations taken on those economic entities to which the insured is realized. Unlike other manufacturers of goods, in insurance there is no possibility of establishing inventories of products.

Marketing Elements in the Insurance market The insurance market is specific because the products that are sold and specific customers. Marketing in the insurance market is comprised of four core elements: Products, Price, Distribution and Promotion

Products:

 Insurance products in the region are homogeneous, any introduction of new product in market requires the development of a long-term insurance products because they have a high cost expenditure. Beliefs of consumers for these products are long-term civic obedience. Convince consumers to purchase these products, it requires reliability, which is one of the main components in the insurance market. Also insurance product range quite prosperous. It is assumed that by now are over 90 insurance products in developing countries a high classification of insurance required by international standards, and most have a low development party insurance homogeneous products. This is because the introduction of new products is very high cost.

Price:

The most important component in the insurance market is the price of the service or product offered by the insurer. To manage risk taking must have tools. Insurance companies provide the means of price policy, or premium, which in itself contains functional and the premium which serves to cover the costs of directing. On premise pricing should know that what serves as the basis for calculating the premium. (Net premium) or functional Premium is part of the premium that would cover losses and expenses with estimated losses. (Gross premium) includes net premium or functional as well as directing or operational costs. The premium is the price quotes for insurance unit. Security Unit can be quite complicated , which subordinates insurance product that is the word, for example in the provision of fire it can be a building cover 150,000.00 euro, while measuring the production unit will be the value of production for the sales clerk insurance unit that done. Vehicle insurance to insurance unit is provided vehicles for a year. In determining the premise quota should keep in mind that one way to attract customers from the other side must keep in mind the definition of the premium, because low premium may lead to the insurance company in bankruptcy. So to set the price of an insurance policy expert engage various fields using different methods statistical probability accounts, dynamic analysis, methods that are inaccessible to the customer.

Distribution:

 Distribution of insurance products is done through direct and indirect channels. Direct channels in the insurance market are insurers who themselves develop strategic policies to ensure long-term civic and market development, using various methods of economic propaganda, economic publicity etc. In order to keep close relationship between the insured and the insurer, the insurer uses indirect channels for placing products using many agents, brokers etc.

Promotion:

 It is a process of communication between providers and consumers in order to create a positive conviction for products and services offered by the insurance market. The promotion is a permanent process of communication by insurance providers for existing and potential customers according to Kotler "Promotion includes all the tools of marketing system, whose task is to communicate with potential buyers." Besides the offer more attractive, sales of insurance products often depends from different communities, whether external or internal. Good communication with the customer company adds belief because consumer confidence will have much more knowledge of who will buy services. Companies that have the highest ratings and working tradition will certainly have greater sales of products, but if this company does not have adequate communication with customers, will miss the marketing of insurance products.