USING THE MARKETING INFORMATION SYSTEM TO UNDERSTAND CUSTOMER BEHAVIOR

Marketing Information System8

USINGTHE MARKETING INFORMATION SYSTEM TO UNDERSTAND CUSTOMER BEHAVIOR

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UsingMarketing Information System to Understand Customer Behavior

Thestatement that a marketing state of equilibrium exists when marketerscan develop a through and deep understanding of their customers isagreeable. The marketing information system (MIS) is the best tool togain a deeper understanding of customers. The MIS is a set ofprocesses and techniques designed to produce, create a break-down,communicate, and retain information about marketing decisions on aregular basis(Harmon 2003: 138). Considering that the MIS is an information system like any other,its use for marketing is applicable for managerial, strategic, andoperational purposes of marketing. In this case, the MIS is forstrategic purposes because marketers intend to find a deeperunderstanding of dynamics that are likely to influence consumerdecision-making. Understanding customer behavior has to be withinthe paradigm of the theoretical aspects of consumer’sdecision-making. Hence, gaining insight into the scope andapplicability of the four-stage customer decision-making decisionprocess in implementing each of the MIS components is the best way tounderstand customers. A combination of the MIS and the four-stagecustomers’ decision-making process fits into the productpreferences of customers that constantly change due to factors beyondthe control of marketers.

TheMIS has four major components that are essential for gathering theraw data for decision-making: the internal reporting systems,marketing research systems, marketing intelligence systems, andmarketing models. The four components aid marketers in generatingthe needed data about customers which is analyzed before making keymarketing decisions. The customer decision-making process, on theother hand, has four major stages before they finally decide topurchase a product: the need recognition stage, the informationsearch stage, evaluation of information, and the purchase decision(Hoyer, Macinnis, &amp Pieters 2012: 24). The MIS tool enables marketers to understand each stage of customerdecision-making process. However, an understanding of the role ofthat each MIS component plays in this case is plausible for themarketer because they exploit each component to get data that leadsto accurate predictions of their customer’s behavior each stage.

Thenature of MIS

Internalreporting systems: The marketer obtains information on a day-to-daybasis about customers. For example information about periods whencustomers register boom-purchases and periods when the sales declineis well in the marketer’s domain. The reporting system constitutesthe record keeping system of the organization. Some of thecomponents of a typical reporting system are the orders received,sales invoices written buyers, and the stockholdings. There aresmall aspects that can also generate vital data to effect marketingdecisions. They include: the product type by market segment orterritory, the product sizes by the type of account (either the salesaccount or the accounts receivables account), and the product size ortype by the type of customer.

Marketingintelligence systems: This component is the most important formarketer. The data obtained from the reporting stage is analyzed andsifted to fit diverse marketing environments. The marketers scan theeconomic and business environment in the most desirable way toidentify data that aligns with specific business and economicenvironments. There are several ways through which the marketer canscan the data: conduct formal searches, unfocused scanning,semi-focused scanning, and informal searches. However, understandingcustomer behavior with the focus on making accurate predictions needsa formal search. A formal search entails employing systematic toolsthat seek specific issues at each stage of customer decision-making.The marketer rather than a professional researcher carries out theformal search.

Marketingresearch systems: Unlike the marketing intelligence systems that arecarried out by the marketing manager, marketing research systems arecarried out by a professional researcher(Lamb, Hair, &amp Mcdaniel 2010: 75). The organization, through the marketing department hires theprofessional to gather data to address a specific marketing problemrather than a general problem. For instance, the marketing managerand marketing department may want get a deeper understanding of howitscustomers evaluate information evaluation their decision-makingprocess. A marketing research is, therefore, commissioned. Theresearch professional will collect data in the market and analyze itusing statistical techniques. The outcome of the data analysis iswhat providers the marketing manager with information on howprospective customers are likely to evaluate product and marketinginformation before they arrive at a decision to make a purchase.

Marketingmodels: Marketing models within the MIS are the techniques used tointerpret information and data from the research and intelligencesystems. The interpretations emanating from marketing model guidesmarketers on the marketing decisions to make about a particularsegment of customers(Wierenga &amp Bruggen 2000:79).Examples of marketing models are: brand switching models, analysis ofvariance (ANOVA), the spread-sheet ‘what if models’, regressionsand correlation models, elasticity models (such as demand, supply,and price), sensitivity analysis models, and linear programming.

Thefour stages of the customer-decision making

Needrecognition: This is the first stage where consumers are faced withan imbalance between actual and desired states that cause thecustomer decision-making process(Lamb, Hair, &amp Mcdaniel 2013: 189).A want that the customer seeks to satisfy ends up addressing the needthey have recognized. For example, an athlete who gets a blisterfrom an old racing shoe recognizes the need to replace them with newones. Internal and external stimulus causes the recognition of aneed. Internal stimulus emanates from the internal desires of thecustomer while external stimulus emanates from interactions with theimmediate environment.

Informationsearch: Customers purchase products based on informed decisions. They get information about products in many ways such as the media,commercial advertisements, friends, family and acquaintances thathave prior experience with the product and personal sources. Eachsource of information has varying influence on the customer’sdecision to finally purchase a product.

Evaluatinginformation: after getting information and constructing the consumerassesses it so that they come up with a set of alternative products.Normally, they use the information to develop a set of criteriathrough which they can make purchases.

Thepurchase decisions: The decision to purchase the product iscontingent upon many other factors. The customers may have resolvedto purchase the product but its cost, the opinions of people close tothe customer, and the sales and services policies of the consumer caninfluence the quantity of purchase. Some customers can even decide tobut a small quantity of the product to try it first before finallyresolving to purchase in large quantities.

InfusingMIS tools into the customer decision-making process

Theinformation gathering stage: The first stage of customerdecision-making is the most important in applying the MIS toolsbecause it targets the ability of marketers to create a credibleknowledge base about the product. Reporting systems can reveal thetypes of accounts and customers that exhibit the tendency to purchaseproducts in concordance with the marketing objectives of theorganization. For instance, advertisements about new packaging aimto attract new consumers. The accounts and customers that register apositive deviation after such marketing effort deserve furtheranalysis through research or intelligence systems available.

Theinformation searching stage: The marketing manager can commission aformal research on which sources of customer information are the mosteffective. If the trend is already clear through marketingexperience, intelligence systems are vital to identify the behaviorsof certain customer groups that get information from sourcesidentified to be more effective for them. A marketing model such asthe analysis of variance (ANOVA) can provide the relationship betweenusing more or less purchases for a specific group, class, or whatevercategory of customers that the company intends to investigate.

Informationevaluation stage: To understand how customers understand information,all the MIS components are applicable. Firstly, the purchase trendsbased on improved benefits and features as communicated in pastmarketing efforts are identifiable through a thorough scrutiny of allinternal reporting systems. Secondly, the intelligence or researchsystems gather the raw data about the trends. Finally, the marketingmodels will help the marketers to identify causal relationshipsbetween product features and benefits that constitute customerevaluation and the likely purchase decisions they make.

Thepurchase decisions: The intelligence systems and marketing modelsare the only MIS components applicable at this stage. The marketerhas to identify specific factors that alter a purchase decision andget a causal relationship with the decisions that specific customergroups made in the past based on available data.

Conclusion

Inconclusion, Marketers should, therefore, understand the changingdesires of customers in order to create a well-functioning marketingmix for a well-defined market. A well-functioning marketing mix hastwo major aspects: the MIS and the four stages that constitute atypical decision-making process of customers. A completeimplementation of all the MIS components throughout each of thecustomer decision-making stages is a prerequisite for understandingcustomer behavior and the basis upon which a marketer can also createmarketing activities that fit the unique and dynamic features oftheir customers.

ReferenceList

Harmon,R. (2003). Marketing information systems. Encyclopediaof Information Systems,3,138-139.

Hoyer,W. D., Macinnis, D. J., &amp Pieters, R. (2012). Consumerbehavior.Nelson Education.

Lamb, C. W., Hair, J. F., &ampMcdaniel, C. (2013). Marketing.Mason, OH, South-Western/Cengage Learning.

Lamb, C. W., Hair, J. F., &ampMcdaniel, C. D. (2010). MKTG4:student edition.Mason, OH, South

Wierenga, B., &amp Bruggen, G.(2000). MarketingManagement Support Systems Principles, Tools, and Implementation.Boston, MA, Springer US. http://dx.doi.org/10.1007/978-1-4615-4595-8.Western Cengage Learning.