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Information systems created new opportunities that resulted in marked changes in marketing, marketing activities and the manner, in which they are performed. In marketing, IT was more pronounced in the shift from advertising to IT-driven marketing and the progression of electronic communication (Schwartz, 1999). This is evident both within and between organizations. Telemarketing is becoming a priority means of distribution in many companies. Indeed, information systems are critical elements in sales and marketing, as well as other business processes.
The marketing function of a business consists on the promotion and sale of existing products in existing markets and the development of new markets and new products to suit the needs of the present and potential customers (Joshi, 2005). Marketing information systems are composed of the information flow necessary for marketing activities. These information systems enable an interactive marketing process, when customers can participate in developing, marketing, purchasing and improving goods and services. Internet technologies and mobile computing systems have enabled automated information systems to support and manage sales. Information systems also assist marketing personnel in product planning, pricing and other management activities, such as advertising and sales promotion plans. The management can also carry out market research and forecasting (Kotler & Kevin, 2009).
Advances in Internet technologies have had a significant impact on the marketing function. Interactive marketing is marketing based on the Internet, Intranet and Extranet to establish a business relationship between firms and customers or potential customers (Kotler & Kevin, 2009) This enables companies to use networks profitably to attract and keep customers, who partner with the business in the creation, purchase, and development of services and products. In this process, customers become active participants, since they are actively engaged in pro-active and interactive processes through the Internet. This in turn encourages them to become involved in the promotion, development, delivery and other services constituting the marketing function. Through various Internet services, such as e-mails, chats and blogs and other correspondence, businesses can get important information and ideas on new products, sales and strong customer bonds.
Targeted market is a central component in the development of advertising and promotion activities for company’s online commerce web-sites. Each component of this concept is required for the success of promotional strategies (Guiltinaan et. al., 1996). Accessing information on specific customers allows a company to create a community specific advertisement and customize promotion methods to serve people in specific communities. To reach the targeted audience, a company can place advertising messages on various websites and other electronic media, including electronic banners and billboards. A company also has an opportunity to place an advertisement on web-pages relevant to a product or service (Coleman, 1998). This ensures that information is available to the target market that is likely to be searching for information related to company’s products. Information systems also allow firms to classify their marketing efforts according to their customers’ ages. Advertising and promotion can also be adapted each time a customer visits a site by following their previous visits.
Companies have been increasingly automating their sales by utilizing computers and networks. Companies can connect to marketing web-sites and sale contact management software in the Internet, Intranet and Extranet through web-browsers. This helps to increase the productivity of sales persons and speed up the acquisition and processing of sales data from the field to the marketing personnel in company offices (Joshi, 2005). This in turn helps marketing and sales management improve the support and information they deliver to their sales persons. Automating marketing also provides many companies with a strategic advantage in the productivity of their sales and marketing responsiveness.
The company’s success is highly dependent on the effectiveness of managing customer relationships. Therefore, companies need to support the flow of goods and services to customers. To manage this process, extensive integrated software is required. Personalizing contacts with customers allows customers to purchase at their convenience. This is because customers remain adequately informed about company’s services and products. Proper information systems are also very helpful in the decision-making process of a company concerning specific needs of their customers (Kotler & Kevin, 2009).
Companies also explore marketing opportunities provided by the social media. This form of media is more appealing to many consumers because of the level of trust they attach to it, since they connect with it at a deeper level. In fact, the social media has even become a basis of marketing advantage for competitors (Michael, 2010). A vast number of people access social sites each day. This results in the development of new techniques that turn communication into an interactive marketing opportunity to connect companies with customers. IT offers a technique that turns communication into interactive conversations, making it easier to pass information to a large number of users. This avenue also reduces the cost of marketing increasing the probability of revenue generation. Through this system, companies can also share their knowledge and expertise and tap the wisdom of their customers (Michael, 2010). Customers also become a part of marketing, when they help other customers. Companies can identify various influences on different groups, who can become a brand evangelist and help in the growth of a brand.
The importance of information systems to retail stores cannot be overstated. Firms can improve their retail sales by using IT to change the process of decision-making and provide a favorable base for their customers. According to Laudon and Jane (1991), this is one way to retain customers’ appeal. Building brand awareness and generating leads through the electronic media has positive impacts on sales. Good examples of these are beverage companies and pastry shops.
Companies use information systems as a competitive tool to develop new services and products, and new methods of marketing them. They also change their internal control, which is important in forging new relationships with customers and edging out competitors. Using information systems can help a firm become a market innovator by providing a product that meets the needs of their customers (Laudon & Jnae, 1991). This will be achieved after partnering with customers in the development and improvement of those products. By processing customer data, a company can create a unique product with competitive features. This will raise the cost of entry to the market by competitors, thereby gaining competitive advantage.
Information systems are also important tools in pricing services and products. If the marketing personnel are well-informed of market trends they will take advantage of this and select a suitable price for their customers. This can be a basis of competition, especially in industries characterized by price wars. By forging an electronic linkage with customers, companies can increase switching costs.
Information systems help organizations focus on a specific market. If to compare them with the competitor’s market, they perform their functions in a better way. Information systems support this activity by providing and analyzing information for specifically directed sales and marketing procedures. They enable companies to understand their customers’ tastes, preferences and buying patterns so that they can plan their advertising and marketing techniques in regard to specific target markets (Laudon & Jnae, 1991). Information comes from different sources, such as scanning stores, credit card transactions, demographic data and web-data. Information from such sources plays an important role in decision-making. Analyzing such data drives marketing that is based on consumer preferences.
One of the main functions of information systems in organizations is the ability to provide their services over electronic networks, including the Internet, wireless networks or e-services. Economic value is closely linked with deriving the utility of information, especially in this era of technological advances. Information technology has enabled firms to undertake complex transactions and complete these transactions with ease even at greater distances from firm’s location (Schwartz, 1999). Information systems enable customers to access information or order goods and services at their convenient location. Firms can market their goods and services and conduct other business transactions through communication technology. The costs of coordination, communications and information processing have been greatly reduced by information systems.
The accelerated progress in information technology observed during the past few decades developed a wide range of technologies to generate, pass and transform information, such as the Internet, customer relationship management programs, agent technologies and data mining tools, smart cards, wireless networks and supply chain management networks (Schwartz, 1999). These technologies enable organizations to acquire more information about the market and its customers, which in turn leads to an increased understanding of customers’ needs and greater ability to develop relationships and offer their services to customers.
The development of smart card networks, such as online payments, smart cards and electronic payments has facilitated advanced selling services, when customers can make either online or offline payments to access goods or services. This increases firm’s profits by increasing the number of buyers or by allowing premium advance payments. This also reduces the risk of arbitrage because of the encryption of personal information on a ticket or card.
The cost of automated information is much lower than that of traditional forms of information processing. This has been a major hindrance to the coordination of customers and suppliers in the marketing chain. Internet-based marketing systems and other inter-organizational information systems have reduced the cost, time and other difficulties in dealing with customers (Laudon & Jane, 1991). For example, customers can place their orders and receive confirmation online, eliminating delays and paperwork. This also eliminates errors associated with manual processing of sales.
Organizations using information systems can gather and analyze data related to customer attitudes and behaviors, identifying sales opportunities and creating segmentation and specific targeting of sales messages. Extensively developing and assessing are important components of enriching strategic marketing (Kotler & Kevin, 2009). The availability of individual customer information is increasingly becoming possible, and this is especially necessary for firms that take on a wide range of customers. This creates a redundancy in space, territory, distance and property in the world of business. Canvassing a wide range of consumer attitudes to product designs is also possible by information systems and marketers are allowed to make changes according to customers’ demands.
Marketing has undergone a transformation, and it is clear that IT plays a great role in this change. Marketing is becoming more entrepreneurial, and new organizational control comes up in this age. External factors also influence the adoption of IT by organizations, since companies have to respond to a competitive pressure in order to remain relevant and profitable. Companies adopt information systems depending on their agenda, which is defined by competing claims and preferences. Information systems are becoming an effective communication tool in making companies accessible to consumers, who may be interested in their products and making them visible to those, who are not familiar with their products. It is used in creating personality behind brands that have not been observed before and create a customer relationship otherwise difficult to be built.