Inputs to the MkIS - Marketing Management

The internal accounting system

Internal company data can be a fruitful source of information, but it is often not fully utilized. Administrative and documentary procedures vary between companies, but most start with the customer’s enquiry and end with the customer’s invoice. In B2B environments it is possible to build a picture of the overall system from individual employees to the total departmental system and ultimately to the firm as a whole.

Data from marketing/sales departments

These are the main points of commercial interaction between an organization and its customers.

Consequently, a great deal of information should be available, including:

  • Total sales: every company keeps a record of its total sales over specific periods e.g. daily, weekly, monthly.
  • Sales by products: few companies sell only one product; most sell a range and keep records of each kind of product or product group.
  • Territorial sales: statistics are kept partly to measure the progress and competence of the salesperson sometimes to influence earnings because commission may be paid on sales) and to measure the degree of market penetration.
  • Sales by trade classification e.g. textiles, engineering or chemicals. This will give an indication of market penetration for each class when compared to the official census of distribution which analyses sales by trade classifications.
  • Sales volume by market segment may be geographical or by type of industry. This gives an indication of segment trends in terms of whether they are static, declining or expanding.
  • Sales volume by type of channel of distribution: where a company has a multi-channel distribution policy it is possible to calculate the effectiveness and profitability of each type of channel. This allows for trends to be identified in patterns of distribution that can then be taken into account in planning future channel requirements. Such information allows marketing to identify and develop promising channel opportunities resulting in more effective channel management.
  • Sales volume over time covers actual sales and units sold. Such information enables seasonal variations to be identified, and inflation cost adjustments can be taken into consideration.
  • Pricing information: historical information relating to price adjustments by product allows the organization to establish the effect on demand of price increases or decreases and to judge the likely effects of any future price changes.
  • Communication mix information includes past data on the effects of advertising campaigns, sponsorship, direct mail programmes or exhibitions, levels of expenditure on marketing communications and the effect on sales of increases or decreases in such expenditure. Such information can act as a guide to the likely effectiveness of future communication expenditure plans.
  • Sales representatives’ records and reports A visit card or file on every ‘live’ customer should be maintained. Sales representatives frequently send reports to the sales office on such matters as orders lost to competitors and possible reasons why, as well as on firms that are holding future purchasing decisions in abeyance. Such information could help in determining future levels of demand or point to possible necessary improvements in marketing strategy.
  • Inquiries received and quotations sent: buyers send inquiries to potential suppliers who then end quotations. Such information is useful in terms of establishing a pattern of inquiries that mature into purchase orders. Such a pattern will expose levels of economic activity in the marketplace.

Other records

As well as sales records other departments also have records that may be of direct value:

  • Material purchased comprises raw material and components used in the manufacturing process. Profitability measures can be established from such analyses.
  • Wages records: knowing the proportion of direct labour that goes into prime cost (prime cost being made up of direct labour, direct materials and direct expenses) can give a guide to manufacturing productivity.
  • Despatch records are kept that include details of goods despatched and methods of transport
  • which then allows the company to build up a picture of logistical effectiveness.
  • Accounts department provides cost data, as well as documents like past management reports. In addition, past budgets, with variance analyses, show budgeted figures against actual figures.
  • Departmental plans: not only should past and current internal information be available to marketing, but so should short, medium and long-term plans of individual departments. Future planned activity and changes in company policy or methods of operation can be evaluated and taken into account.

Sources of information available from the internal accounting system are multifarious and represent the most obvious data that can be of use within an MkIS. Other departments can input valuable data and such information can be collected from Research and Development, Human Resource and Production in particular where measures of output and productivity can be used. A fully co-ordinated corporate MIS, of which the MkIS is a component part, is an invaluable aid to strategic corporate planners and marketing planners.

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