Marketing Information Systems: A New Dimension for Marketing Research

Author(s): Richard H. Brien and James E. Stafford

Source: Journal of Marketing, Vol. 32, No. 3 (Jul., 1968), pp. 19-23
Published by: American Marketing Association
Stable URL: http://www.jstor.org/stable/1249757
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 Systems:
Marketing Information

A New Dimensionfor
MarketingResearch
RICHARD H. BRIEN BUSINESS enterprise in the United States is caught in
an ironic dilemma: our economic system generates a massive
and volume of data daily, and the rate of information generation appears
to be increasing exponentially; yet most managers continue to
JAMES E. STAFFORD complain that they have insufficient, inappropriate, or untimely
information on which to base operating decisions.
In 1958, Adrian McDonough observed: "Half the cost of run-
ning our economy is the cost of information. No other field offers
such concentrated room for improvement as does information analy-
sis."l Today, a decade later, the need for efficient information
management is even greater, perhaps especially for marketing
management since its job is to match the firm's products with
dynamic markets. Marketing is inextricably caught up in the
"Communications Revolution." The new era, "The Age of Infor-
mation," will emphasize the information gathering and processing
structure of the organization.
It is the contention of this article that the problem of securing
adequate decision information for marketing must, and now can,
be seen from a broader perspective than previously has been the
case. In seeking to establish a new outlook on a matter it is often
helpful to cast the problem in new terms. The new perspective
from which this inquiry will be launched is that of "managerial
systems." The process of developing timely, pertinent decision
data for marketing management can now be characterized more
The application of the meaningfully, even if somewhat prematurely, as the functioning
systems approach to mar- of a "marketing information system" rather than simply as "mar-
keting management prom- keting research."
ises to breathe new life into
The Role of Marketing Research
marketingresearch. In this
article the authors present Where does research fit into the marketing management process?
their views of the relation- If the marketing concept-with its emphasis on integrated
decision-making-were widely accepted and implemented, the an-
ship between decision-in- swer would be fairly clear. Research would be used to analyze
formation flows and the
specified relationships in the various functional areas of marketing,
management process in but the emphasis would be on its use in a coordinated, systematic
marketing, and state the fashion in order to make the total marketing strategy of the firm
case for expanding tradi- more efficient. (See Figure 1)
tional marketing research Research findings would serve at the outset as a basis for estab-
into "marketinginformation lishing objectives and formulating an apparently optimal plan.
systems." At this stage the role of research essentially would be to predict

1 "Today's Office-Room for Improvement," Dun's Review and Modern

Journal of Marketing, Vol. 32 (July,
1968), pp. 19-23. Industry, Vol. 73 (September,1958), p. 50.

19

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20
20; Journal of
of Marketing, July, 1968
Marketing, July,

I I
I I
L_-- _ C
Opportunity
{Search
- - _
J
Feedback
Decision Flows *-
InformationFlows .* -

FIGURE 1. The Marketing Management Process and Information Flow.

the results of alternative business decisions (for

example, a "penetration" price versus a "skimming" * ABOUT THE AUTHORS. Richard H.
Brien is Assistant Professor of Market-
price, or information dissemination through sales-
men rather than through advertising). (See the "A" ing and Acting Director of Graduate
Studies at the University of Houston.
feedbacks in Figure 1) He earned his Ph.D. at the University
If the research effort were extended full cycle, of Texas and has contributed to BUSI-
periodic post hoc studies would be conducted to NESS HORIZONS and other journals.
evaluate the execution of specific aspects or phases of He also is the author of a forthcoming
the marketing program. ("B" feedbacks in Figure monograph on industrial development in
Central America.
1) In this role, research would provide the basis for
control, modification, or redirection of the overall
James E. Stafford is Assistant Profes-
program. sor of Marketing at the University of
Control and modification (or redirection), in sum, Houston. He earned his Ph.D. at the
represent reformulation, and the "B" feedbacks University of Texas and has been a con-
(evaluative) in fact would become "A" feedbacks tributor to the JOURNAL OF MARKET-
(formulative), for the succeeding stage of the mar- ING RESEARCH, THE JOURNAL OF
RETAILING, BUSINESS HORIZONS,
keting program. This condition simply underscores and other publications.
the fact that marketing management is an ongoing

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 Marketing In formation Systems: A New Dimension
Marketing Information for Marketing Research 21
21
process, or-in the newer terminology-a dynamic ment of decision-pertinent information, and to con-
system. cern itself with isolated problems almost on an ad
Formulative and evaluative information can also hoc basis. "There is a widespread failure to visual-
come from inside the firm, notably from the account- ize marketing research as a continuing process of
ing department. This information flow typically inquiry in which executives are helped to think more
is not considered part of "marketing research." It effectively."4
is definitely an integral part, however, of a market-
ing information system. Toward Marketing Information Systems
Under the marketing concept, research should The systems approach to marketing management
also help to anticipate new profit opportunities for is breathing new life into marketing research. The
the firm in the form of new products or services. emphasis that systems theory places on interaction
("C" feedback in Figure 1) In many U. S. indus- and integration in the decision-making process makes
tries-especially consumer goods industries-the rate it clear that the particularistic, "brush-fire" ap-
of product innovation, the rate of new product fail- proach that has characterized traditional marketing
ure, and the cost of new product failure are all research is rapidly becoming obsolete. What is
extremely high and still rising. To survive in such needed is "a marketing intelligence system tailored
dynamic markets the firm must try to develop a to the needs of each marketer. Such a system would
sensitivity to changes in consumer behavior and in serve as the ever-alert nerve center of the marketing
the conditions that influence behavior, both of which operation."5
create opportunities for successful new products. The "nerve center" concept is the theme used by
It is meaningless to talk of a new product with- Philip Kotler who has drafted a blueprint for a new
out considering at the same time the related mar- organizational unit within the firm, the Marketing
keting decisions (the rest of that product's mar- Information and Analysis Center (MIAC).6 MIAC
keting mix) that will have to be made. This represents a complete overhaul and expansion of the
consideration would bring the cycle back to the marketing research department into a comprehen-
formulative role of research (the "A" feedbacks), sive executive marketing information service.
suggesting again that marketing research really
should be a coordinating agent. Each marketing Definition of MIS
decision should be thought of as an input in the
Despite minor variations in terminology, it is
dynamic system, and research should be used as an clear that many of the critics of the narrow view
agent to assist in phasing the inputs. The common of the role of marketing research are advocating a
goal of the decision inputs is the profitable satis- common concept-"the concept of careful search to
faction of consumer needs or wants; this brings the generate a flow of ideas and information which will
matter back to the marketing concept, and the pack-
help executives make better decisions."7
age seems reasonably complete. In fact, if marketing The notion of a sustained flow of decision-infor-
research and the marketing concept had this kind mation leads to the term, "marketing information
of relationship in widespread practice, the case for
system," defined as follows:
marketing information systems would be consider- A structured, interacting complex of persons, ma-
ably weakened.
chines and procedures designed to generate an
Research by Fits and Starts orderly flow of pertinent information collected
from both intra- and extra-firm sources, for use
A recent survey revealed that unfortunately
as the bases for decision-making in specified re-
there is still considerable confusion and wide
divergence of opinion regarding the definition and sponsibility areas of marketing management.
managerial implications of the marketing concept.2 It will be helpful to take a closer look at the
Especially disappointing was the failure of many essential components of the definition: first, a struc-
companies to cite customer-orientation and inte- tured, interacting complex. The important notion
grated decision-making as important aspects of the
3 Committee on Definitions of the American Marketing
concept. One of the consequences of this narrow
view has been the evolution of marketing research Association, Ralph S. Alexander, Chairman, Market-
ing Definitions: A Glossary of Marketing Terms
somewhat "by fits and starts."
(Chicago: American Marketing Association, 1962),
A widely used definition of marketing research is p. 16-17.
"the systematic gathering, recording, and analyzing 4 Joseph W.
Newman, "Put Research Into Marketing
of data about problems relating to the marketing Decisions," Harvard Business Review, Vol. 40
of goods and services."3 Unfortunately, the research (March-April, 1962), p. 106.
6 Lee Adler, "Systems
procedure has tended to be unsystematic, to empha- Approach to Marketing," Har-
vard Business Review, Vol. 45 (May-June, 1967),
size data collection per se instead of the p. 110.
develop-
6 Philip Kotler, "A
Design for the Firm's Marketing
2 Nerve Center," Business Horizons, Vol. 9 (Fall, 1966),
Martin L. Bell, Marketing: Concepts and Strategy
p. 70.
(Boston: Houghton Mifflin Company, 1966), p. 10. 7 Same reference as footnote 4, p. 106.

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 22
22 Journal of Marketing, July, 1968
1968

here is that the marketing information system is a that may or may not be included in the information
carefully developed master plan for information system.
flow, with explicit objectives and a home in the The consideration of the use of computers has,
formal organization. Successful information sys- however, forced many organizations to pay explicit
tems will not evolve spontaneously within the organi- attention to their information systems. "The flex-
zation, nor will they result if their creation is left ibility and power of the new tool, as well as its
exclusively to information technicians. Donald Cox great cost, has caused many managers to think for
and Robert Good point out that a characteristic com- the first time of formally planning their information
mon to each of the companies that so far has had flows and processing functions."'0
success with its marketing information system is Business information systems include many ma-
the support of top management.8 chines other than the computer and some of them
A marketing information system is a structured, promise to have an impact on future systems that
interacting complex of persons, machines, and proce- will rival the computer's influence. In particular,
dures, requiring the coordinated efforts of many data copying, storage, and retrieval machines have
departments and individuals, including: greatly expanded management's information proc-
* Top management essing capability.
* Marketing management, brand management It is estimated that in 1966 some half a million
* Sales management duplicating machines spewed out 400 billion copies."
* New product groups At the same time, a new document storage system
* Market research personnel was developed permitting the storage of up to
* Control and finance departments 500,000 single-page documents on a single 7,200 foot
* Systems analysts and designers reel of videotape. This means that roughly 20,000
* Operations researchers, statisticians, and model articles or chapters from books could be stored on
builders one reel with a retrieval time measured in seconds.
* Programmers But the physical capacity to generate and process
* Computer equipment experts and suppliers.9 fantastic volumes of data at very high speed is an
It is clear that in traditional management terms asset only if the types of data to be gathered and
both line and staff personnel inevitably will be in- the sources from which they are to be elicited are
volved in any marketing information system. De- carefully prescribed. The definition of a marketing in-
cision-makers will have to be a great deal more formation system alleged that it is designed to gen-
precise in specifying their information needs, and erate an orderly flow of pertinent information,
a complete crew of information specialists will be collected from both intra- and extra-firm sources.
called upon to satisfy them.
What is not clear is the determination of the most Computer-based Reporting Systems
effective organization pattern for implementing and Internal information includes fundamental rec-
ords of costs, shipments, and sales and any analyses
administering the system. In fact, the organiza-
tion problem is probably the greatest deterrent to of these that can be made to measure the firm's
the more rapid and widespread diffusion of the in- performance (distribution cost analysis, market
formation systems concept. The question, like many shares by product and region, and the like). The
others in the area of organization structure, is not computer and more progressive accounting depart-
ments that see their role as the provision of man-
generically answerable; each firm's system will have
to be tailor-made. agement information rather than as simply "score-
One of the major factors that makes it meaning- keeping" have been two of the most important
ful to talk of information systems is the tremendous contributors to the integration of such data, on a
improvement since World War II in information regular basis, into the marketing information flow.
handling technology and machinery. The building Many companies are experimenting with "com-
of the first primitive computer, only slightly more puterized marketing information" in an attempt to
than two decades ago, has been designated the begin- shorten the delay between the performance of their
ning of a revolution in the information sciences. products in the market and the receipt of perform-
There has been some confusion, however, about ance reports. In doing so, they stand to sharpen
the relationship between computers and information their strategy by gaining valuable lead-time over
systems. They are not synonymous; nor is either the their competitors.
sine qua non of the other. The system is the structure One producer and nation-wide marketer of con-
and procedure of the entire organization's communi-
cative process; the computer is a processing device Frederick G. Withington, The Use of Computers in
10
Business Organizations (Reading, Mass.: Addison-
8 Wesley, 1966), p. 3.
Donald F. Cox and Robert E. Good, "How to Build 11E. B. Weiss, "The Communications Revolution and
a Marketing Information System," Harvard Business How It Will Affect All Business and All Marketing,"
Review, No. 3, Vol. 45 (May-June, 1967), p. 149. a special issue reprinted from Advertising Age (Chi-
9 Same reference as footnote 8.
cago: Advertising Publications, Inc., 1966), p. 22.

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 Marketing Information Systems: A New Dimension for Marketing Research 23

sumer goods gets monthly reports on 3,000 key decision-making are inseparable in practice. A de-
accounts 20 days earlier than before, thanks to cision occurs only on "the receipt of some kind of
computer-based reporting systems. Each account is communication, it consists of a complicated process
compared with its performance at the same point of combining communications from various sources
in time during the previous year and with the com- and it results in the transmission of further com-
pany's current total volume in the particular market munications."l3
zone. Also provided are gross daily tabulations for Mr. Paul Funk, executive vice-president of
each package size of each brand by geographic McCann/ITSM, contends that marketing information
district. management is the basic business of business:
When the doors open each morning at another Only by putting together an over-all construction
company, a major grocery products manufacturer, of the total marketing process; only by identifying
marketing management has a complete sales analy- -and in most instances by visualizing-interre-
sis and inventory position as of closing time the information flows, concurrent and
lationships,
previous day. The data are fed by teletypewriter sequential work patterns and critical decision
from the company's sales offices and warehouses to
points can one truly grasp control of the bewilder-
a central computer which analyzes the day's orders. ing and complex range of activities engaged in
In addition, each salesman is required to "mark
by the present-day major corporation.14
sense" his daily call reports and send them in to
The pursuit of marketing information systems,
headquarters each evening for computer analysis.
then, really involves much more than expanding and
Once accumulated, these reports on the in-store
automating the data gathering process. It is an
impact of frontings, shelf positions, and point-of-sale inextricable part of the larger pursuit of more effi-
materials provide marketing management with an
cient forms and methods of organization for mar-
up-to-date retail product-movement picture.12
keting management.
Integrating Research into the MIS We Are Running Late
The most important notion in these examples is
that a timely, basic data flow has been established There is ample evidence that marketing decision-
to chart the firm's progress and raise warning sig- making is becoming more complex, making the need
nals when there is a marketing malfunction. for a systematic approach to information manage-
Such
a framework will make additional data needs much ment all the greater. First, there is a growing com-
clearer, allowing special supplementary information plexity of the areas that have to be managed, largely
to be collected, as needed, from external sources a function of the tendency toward larger scale en-
through surveys, panels or experiments. At this terprise. Second, as expanded marketing effort
point, then, the proper order will have been estab- takes the firm across existing environmental fron-
lished: the need for conducting "marketing research" tiers, whether geographic, economic or social (or,
and the technique to be used will be determined in more likely, all three), the information needs of the
the context of specific managerial information enterprise are substantially compounded. It is highly
requirements. likely that the most crucial constraint currently im-
Such an approach will help assure that any data posed on the growth of international marketing,
gathered are pertinent, another important aspect of for example, is the dearth of pertinent decision-
the definition of a marketing information system. information.
It is perhaps a more grievous sin to collect unneces- But perhaps the most compelling argument for
sary or redundant information than it is to fail to marketing information systems is the "Information
collect any data at all about a particular matter. Explosion" itself. The world's store of knowledge
Superfluous information costs money to develop and has allegedly doubled during the past decade and
wastes decision-makers' time; it represents a serious is expected at least to double again in the next
misallocation of managerial resources. It must be decade.
remembered, the definition asserts, that the data gen- Information, including management information,
erated are to be used as the bases for decision- is growing by the microsecond and even nanosec-
making in specified responsibility areas of marketing ond. We cannot turn off the flow. We had there-
management. fore better learn to control it-and we are already
Thus, the questions of the types of data the infor- running late.15
mation system is to generate and the sources from
which it is to elicit the data really can be answered
13John T. Dorsey, Jr., "A Communication Model for
only in the framework of a careful designation of Administration," Administrative Science Quarterly,
the organizational decision-structure and the speci- Vol. 2 (December, 1957), p. 309.
fication of the information requirements for the 14 "Why Industrial Marketers Aren't
Using Computers,"
decision process. In fact, according to many or- Industrial Marketing, Vol. 51 (November, 1966), pp.
ganizational theorists, information processing and 88-89.
15 Howell M. Estes, "Will Managers Be Overwhelmed
12 by the Information Explosion?," Armed Forces Man-
Same reference as footnote 11, pp. 13-14.
agement, Vol. 13 (December, 1966), p. 84.

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