What Is a Marketing Information System?

A marketing information system is a business intelligence software application that analyzes internal and external market research data. It helps managers make decisions related to promotional campaigns, product development, target markets, competitor activity and consumer perceptions. The data that is stored and analyzed in a marketing information system can also help evaluate the performance of a company, individual product categories and business units.

Many companies use a marketing information system to gain insight into their customers' purchasing behaviors. Due to the wealth of data that these systems collect, software and server applications that analyze and organize the information are vital components. These systems gather information that the company might otherwise not be able to collect or observe. For example, grocery chains capture and analyze consumer purchasing behavior through a point of sale system and loyalty card with the assistance of an automated marketing information system.

Marketing involves discovering consumer needs and meeting those needs profitably. In order to uncover consumer needs, a company needs to conduct research. A marketing information system can help a company accomplish that through data mining techniques. Some consumers are not comfortable disclosing their true behaviors and perceptions in more expensive forms of primary research, such as focus groups and surveys. Computer systems can anonymously track actual behaviors and reveal patterns and parallels that surveys cannot.

Besides examining internal records related to customer behavior, a marketing information system may gather and track information related to competitor activity. New product introductions and sales results might be obtained from external sources and fed into the system. Its analytical tools may perform a comparison between the sales growth of the competitor's product and the company's. This can help managers determine if they need to be more aggressive in their marketing efforts, or modify a product's positioning and distribution strategy.

Intelligence systems can reveal how well products are performing in certain markets and distribution channels. For example, if a manufacturer distributes its products in several major grocery chains, an intelligence system may break down how its products are performing in each chain relative to last year's sales. This can indicate a need to increase shelf space, introduce more incentives for the retailer, sponsor more store level promotions and push certain product categories. Depending upon the chain's clientele and core demographics, a manufacturer may find that particular product lines perform better in certain retailers, which a marketing information system can determine.