BENEFITS OF THE MARKETING INFORMATION SYSTEM IN THE CLOTHING RETAIL BUSINESS

Abstract

This paper has the purpose of being familiarized with the benefits of the marketing information system in companies that operate in the retail business. A field research was done in a major clothing retailer, by means of a case study that consisted of interviews with two employees of the company, one from the top management and one from the marketing area, based on a semi-structured script , in addition to a documental analysis. The results indicate that information and its systematization possess great importance for the development of competitiveness, contributing to the development of the operations and to the promotion of new business opportunities, as provided by the pertinent literature.

Headnote

ABSTRACT

This paper has the purpose of being familiarized with the benefits of the marketing information system in companies that operate in the retail business. A field research was done in a major clothing retailer, by means of a case study that consisted of interviews with two employees of the company, one from the top management and one from the marketing area, based on a semi-structured script , in addition to a documental analysis. The results indicate that information and its systematization possess great importance for the development of competitiveness, contributing to the development of the operations and to the promotion of new business opportunities, as provided by the pertinent literature.

Keywords: Marketing information system; Environmental analysis; Marketing decision-making; Clothing retail business; Competitiveness.

1. INTRODUCTION

Due to high competitiveness, many companies have sought resources and management tools which enable them to quickly and flexibly respond to market demands.

This is how information technology tools have gained a prominent role within competitive companies, as they aim to promote reliability and fast information, contributing to the mitigation of risks in decision-making processes (Kubiak & Kowalik, 2010).

Hooley, Saunders and Piercy (2005, p. 133) highlight the importance of information in the decision-making processes, as its importance is related to the spotting of opportunities and to the best business management.

Particularly to the extent that the marketing process is concerned, its strategic dimension is in charge of providing guidance to companies as to market opportunities, aiming at the development and maintenance of competitive advantages and profits in the long run, based on the systematic and continuous analysis of the needs and wishes of current and potential clients as well as the needs and wishes of competitors (Lambin, 2000). Therefore, strategic marketing is the one that monitors the market and indentifies market opportunities and segments based on the expectations of the target audience (Minciotti, 1992).

Notwithstanding, Hooper, Huff and Thirkell (2010) argue that organizational functions around business strategies are increasingly fed by marketing strategies, interpreted by marketing orientation and by its elements (consumer orientation, competitor orientation or interfunctional coordination).

Likewise, Cravens and Piercy (2006) state that information is an input which can be used as a base to solve problems, assess potential actions, improve operational performance and mitigate risks in decision-making processes, which, according to Gupta (2012), enable new opportunities to take place as well as changes in the industry.

As such, it is necessary to develop a formal and stable structure to collect information, which freely flows within the organization so that it contributes to proper decision-making processes by managers (Jaworski, Macinnis & Kohli, 2002). Such authors as Kotler and Keller (2006) and Lambin (2000) state the need for structuring and systematizing information so that marketing decisions are continuously supported.

According to Berhan, Paul and Jan (2012), it is impossible to consider marketing without an information system. In this context, Pinto et al. (2006) argue that many companies combine marketing policies and techniques with information technologies, enabling managers to offer distinctive services and products, create value for the client s and generate profits for the organization.

Thus, the company's structure must be learning-process oriented, capable of obtaining relevant information from the data related to the decisions to be made; such decisions pertain to the strategies and actions which enable the defined goals to be met.

In addition, Levy and Weitz (2000) argue that information has a particular value in the retail business, as it offers new possibilities to identify opportunities for competitive advantages through the familiarity with the target audience, with the products and services offered and with the competition.

By considering all the information stated above, this paper has the purpose of being familiarized with the benefits of the marketing information system (MIS) for marketing decisions in the clothing retail business.

In order to meet the defined goal, in addition to approaching related subject matters, a field research was done by means of a case study method, in a major company in the clothing retail business, which is an expressive segment in the Brazilian economy.

This paper is divided into five parts, including this introduction. The second part addresses the MIS concept and models; the third part shows the field research methodology; the fourth part shows the results of the field research, from the company's characterization to the presentation and analysis of obtained data; the fifth part present s this paper's conclusion.

2. MIS CONCEPT AND MODELS

In general, an information system can be defined as a set of interconnected components which work in concert in order to collect, process, store and recover data and distribute information for the purpose of making it easy to plan, control, coordinate and analyze the decision-making process within organizations (Laudon & Laudon, 2001; Swartz & Iacobucci, 1999; Deshpande, 2013).

Levy and Weitz (2000) also state that the use of an information system must associate and store data from the whole organization in order to identify and understand current and potential clients, which makes it crucial in marketing management and planning. For Karamarko (2010), measuring and assessing business results are possible thanks to the reports and forecasts provided by the MIS.

New information management technologies available offer possibilities for improving the competitive advantage of the companies, such as information management systems, database systems, decision-making support systems, customer relationship and value chain management systems, and smart competitiveness systems (Cravens & Piercy, 2006).

Regarding marketing decision making in particular, Kotler and Keller (2006) explain that the information system allows classifying, analyzing, assessing and distributing relevant information in a precise and timely fashion for the decision makers. In agreement with this view, Mattar et al. (2009) state that the MIS allows monitoring the company's results and the external environment, disseminating the data obtained by the company and contributing to reducing uncertainties in the decision-making process.

Therefore, the use of the marketing information system for decision making saves time and prevents rework, as it provides information to all marketing activities regarding planning, promotion, sales of goods and services for both customer satisfaction and organizational goals (Ismail, 2011). Thus, the MIS "supports the marketing plan and decisions, helping the management of information" (Campomar & Ikeda, 2006, p. 37).

In addition, Chatzipanagiotou and Coritos (2010) state that the MIS is vital for decision-making processes and for the development of marketing planning.

However, Gounaris, Panigyrakis and Chatzipanagiotou (2007) believe that, based on their studies, despite the recognition and importance of information in many academic papers, this subject matter is complex and always associated with business success.

Nevertheless, there is no agreement among many scholars regarding the definition, efficiency and operationalization of the system, as this subject matter becomes even more complicated when the marketing information system is only limited to such aspects as sales, profitability, and market share for strategic decision-making processes. However, many MIS definitions refer to it as an important element in the preparation and in the organizational strategic development, as per Figure 1.

It is a structured and interacting complex of people, machines and procedures whose purpose is to generate an orderly and continuous data flow, collected from internal and external sources of the company, to be used as a base for decision making in areas specifically in charge of marketing.

With no intention of exhausting this subject matter or presenting a broad review of the MIS models, some of them are presented with the purpose of enabling the discussion of this subject matter and obtaining more support for the field research. As for the operational model, Kotlere and Keller (2006) believe that the MIS must feature the following elements: a) the subsystem of internal records, which allows monitoring and analysis of the organization's performance; b) the subsystem of marketing intelligence, which monitors the many environmental variables and marketing events that influence the business, in which the competitors are included; c) the subsystem of marketing research, which is aimed at the development, collection, analysis and edition of systematic data reports and relevant findings for the resolution of specific marketing problems; d) a subsystem of analysis and support to market decisions - a coordinated set of tools and techniques, software and hardware to assist in the analysis and interpretation of the information. The suggested model is represented by Figure 2 (Kotler, 1998, p. 12)1:

Mattar et al. (2009) highlight that fact that a generic MIS model must be applied and adapted to the reality of any company as long as it comprehends such activities as joining, processing, disseminating and storing relevant data and information, internal and external to the organization, for marketing decision-making processes.

Thus, the proposed model, as seen in Figure 4, is made up of four subsystems: (1) environmental monitoring system; (2) competitive information systems; (3) internal information systems; (4) marketing research system.

Nevertheless, Mattar et al. (2009) add that there is not a standardized MIS model; each company has a particular need for information which corresponds to its expectations, also respecting the management style and/or the culture of the group which manages it.

3. FIELD RESEARCH METHODOLOGY

Allowing for the relevance presented by the literature reviewed regarding the relationship of the MIS with the marketing decision making, the purpose of the field research was defined as the verification of the benefits obtained with the use of the MIS.

For this purpose, the descriptive research was chosen, which was performed by means of a case study, as it refers to a contemporary phenomenon, within a real context, (Vergara, 2004; Yin, 2005). The chosen company for the empirical contribution operates in the clothing retail business, which is viewed as an expressive sector in the Brazilian economy.

Data collection took place by means of personal, individual interviews, with two of the company's executives, based on a semi-structured script, which consisted of questions related to the variables: "use of the MIS" and "benefits provided by the MIS". Such questions were written based on the literature review performed, for the purpose of enabling a confronting and a corresponding analysis. The information obtained was verified and crossed with the information available in the management documents provided by those being researched.

The research was done in February 2009, with two decision makers, in accordance with their roles: one of them from the top management and the other one from the marketing department. Two employees were interviewed for the purpose of reducing biased opinions and personal interests, as it was possible to triangulate the data obtained as well as with the documents provided by the company (Yin, 2005).

Such documents contained specific data on the research variables and data related to the results and their projections, which served as an important indicator for the purposes of the research problem in question, especially regarding the existence of a MIS and the scope and flow of the information generated.

The script was based on the theoretical background described in this paper. The first part of the script attempted to become more familiarized with the company whereas the second part addressed the purpose of the research itself.

The analysis, from the transcription of the answers, which were recorded with the consent of the interviewees, and from the documents provided by them, was descriptive and interpretative, and it attempted to find a correspondence with the theory presented so that the information obtained in the literature review could be reinforced or questioned. (Vergara, 2004; Yin, 2005).

4. PRESENTATION OF THE RESULTS OF THE FIELD RESEARCH

4.1 Characterization of the business sector of the researched company

According to the Ministry of Development, Industry and Foreign Trade (MDIFT) (2008), by comparing January 2008 with February 2007, the sectors which grew the most in terms of productivity were the ones in transportation equipment (8.1%), machines and equipment (8.3%), leather and shoes (10.7%) and clothing (11.6%).

According to Renner (2009), the fashion retail sector is quite fragmented which allowed the successful development of major department store chains, which increasingly receive investments from foreign groups.

The fragmented market and the search for positioning have made it clear that when it comes to brand consumption, according to Luz (2008), the clothing market is mainly composed of classes A and B, with class A spending 19 times more than the other classes; classes A and B account for the consumption of 57% of the fashion products in Brazil, whereas class C accounts for 31%. Regarding brand consumption, considering the economic expressiveness, Luz (2008) also reveals that the São Paulo Fashion Week [SPFW] event sets in motion around 1.5 billion Brazilian reals.

However, according to a report released by Renner (2009), the increase in the purchasing power of the families in classes C and D have drawn the attention of the retail sector interested in attracting the low-income population. Also, the behavior of the population has been the target of analysis, with the search of a single point of sales, leading to the expansion of the shopping centers and, consequently the presence of department stores.

For the production of items offered for consumption in the fashion market, according to the Ministry of Labor and Employment (MLE), most of the employees who compose the sector are women and the States that hire the most employees in the sector are São Paulo, Santa Catarina and Minas Gerais.

4.2 Characterization of the company

The researched company was founded in the late 40's and its main activity was the sale of textiles. Acquired by a domestic group at the end of the 70's, after restructuring, it started to offer ready-to-wear clothes. Currently, it is among the major fashion retail chains in the country. The quest for better positioning made it, in the 90's, turn its attention to fashion, in international and national trends (the SPFW, for instance). In the same period of time, they introduced quality improvements to its products and the launching of its own brands.

Currently, the company is the second largest chain of department stores in Brazil and it competes with companies that receive foreign investment. Among the domestic ones, it occupies the first position. The group to which it belongs is regarded as the largest group in the making of clothes in Latin America.

The company keeps employees in fashion centers in Europe and in the United States, which enables its collections to be based on the main fashion trends. On average, 120,000 pieces a day are made in their factories, delivered at their own stores by the carrier company that belongs to the group. Advertising campaigns are aimed at the main target audiences of the stores: women aged 25 to 40 years, through television advertisements and specific in-store marketing activities, using information from its customer database.

With the purpose of strengthening the relationship with the active customer, the company offers the store's own card to make financial services available, such as cash withdrawals, personal loans, insurance, home and vehicle assistance, theft and robbery protection, unemployment and home insurance. In Figure 4, it is possible to see other information on the researched company.

4.2 Description and Analysis of the Researched Variables

4.2.1 Use of the MIS

The company has an Information System (IS) based on the software called SAP (Systems Applications and Products in Data Processing), developed by the German company with the same name. It enables to obtain information and disseminate them throughout the company so that it can be used in its activit ies. Regarded as slightly complex by the interviewees, it sometimes requires that some information, after being extracted and analyzed, be transferred to the Intranet, which tends to make its use easy by the users. The company's SAP system is made up of two bases called BW (Business Warehouse); one of them serves the company's commercial area and the other one serves the remaining areas.

The model can be divided into two blocks: (1) one defined from the user's profile, who has access only to their department's information, in order to perform their tasks, as seen in Figure 6, and (2) the other one in which the information presents itself in a disaggregated manner, more complex, and which is worked on with statistical modeling tools. Due to the merging of the Business Intelligence and Information Technology, the Intranet, based on the user's profile, at the moment, shows some "screens" or accesses under construction, as seen in Figure 5, by the ellipse in white.

As for the flow and distribution of information, the access is restricted to each department within the company. Each store has only access to its information. The purpose of the restrictions, mentioned by both interviewees, is to keep the information from being passed on to the competition. Due to strategic reasons, the Internal audit alone has full access to all the information and it grants access authorization. However, according to the interviewees, these measures are seen by many users as something unsuitable and complex, which causes delays in the decision-making process, especially in the Marketing area, which needs data that matches the customer's behavior, regional cultures, sales and other aspects. As for the MIS model, both interviewees stated that the company developed its own model, which meets their needs and features a system of decision-making support and of relationship management with customers and the value chain. In detail, the marketing professional explained that the MIS is an SAP module, accessible to the marketing department, and it has the subsystems of records, marketing research and decision-making support, which enables the use of the statistical modeling.

Therefore, the model developed by the company is the closest to what is proposed by Kotler (1998). Also, as seen in the pertinent literature, the company has an information system structure interconnected with the use of software and the Intranet, which operates in an integrated manner with the MIS for the development of strategies and action plans (Laudon & Laudon, 2004; Cravens & Piercy, 2006; Swartz & Iacobucci, 1999; Hooper, Huff & Thirkell, 2010; Deshpande, 2013).

Nevertheless, by taking into account the fact that the pertinent literature highlights that information must be accessible to all decision makers, the above- mentioned restriction results in certain dissatisfaction from the users, which might hamper the achievement of the benefits suggested by the pertinent literature (Laudon & Laudon, 2004; Hooley, Saunders, & Piercy, 2005; Cravens & Piercy, 2006; Minciotti, 1992; Campomar & Ikeda, 2006; Mattar et al., 2009; Swartz & Iacobucci, 1999; Deshpande, 2013).

4.2.2 Benefits provided by the MIS

The two interviewed managers, when questioned about the benefits the company is provided by the MIS, recognized that there are many of them, but in fact the company only allows to achieve them if they are used with other IS modules, which is not always feasible, due to the above-mentioned access restrictions. The statement is made clear when the interviewees classify in terms of importance the benefits which are solely provided the MIS (Figure 6), whose items were listed based on the literature review.

Both believe that the MIS allows the establishment of the foundation of retail strategies. They also speak highly of the possibility of reducing operational costs, making more accurate reports, improving productivity, controlling marketing costs, improving internal services, improving decision making, developing plans, promoting price and communication strategies, optimizing the services offered to customers, indentifying target markets and new segments and managing inventories.

However, such benefits as improving distribution control, reducing the risks perceived by customers and indentifying the nature of the services and products offered to the market are analyzed in the IS by other sectors and involve Logistics (factory/carrier), Purchasing and Business Intelligence. Even the contribution from the MIS to marketing results needs the monitoring of the responses from campaigns and promotions by the Business Intelligence, particularly due to information access restrictions.

Regarding the development of the main retail strategies, the information obtained contributes to strategic planning and decisions on the lines of products, price setting and store expansion and location.

As to the marketing planning, there is the concern for monitoring needs, satisfaction and customer purchase processes, performed by the Business Intelligence department, which handles the strategic function of supply and provision of information to the managers for decision-making purposes.

With a focus on the customers and maintaining its positioning within the segment in which it operates, the company invests in the integration with the factory in order to gain market and offer fashion with quality and fair prices. This integration is seen as a distinctive element over the competition, a sort of an innovative service added to the customer service. Nevertheless, for the interviewees, the integration store/factory is seen as a distinctive element which tends to enable cost reduction and improvement in price strategies over the competitors.

According to the top management interviewee, based on the analysis of market share: "Currently, we are the second largest company in this sector, but we have been working to reach the first position soon, and in order to do so the company has worked on the integration between the stores and the group, opening of new stores and refurbishing of the existing ones, consolidation of market share in the Northern and Northeastern regions, increase in the market share in São Paulo and Rio de Janeiro, creation of a financial services company, strengthening of the relationship with customers by means of store cards and focus on innovation, launching of trends and products by means of market research and marketing intelligence, modernization of the manufacturing complex and implementation of information technology for operational and financial management."

Regarding the interaction of the company with competitors, there is some difficulty obtaining information and, often times, the storés managers are the ones who visit their competitors and pass information on the Business Intelligence, Commercial, Marketing, and to other operational areas.

With the purpose of meeting market needs and maintaining its positioning, the company believes that observing and analyzing the main events and the demographic trends demand efforts, but which tend to offer more opportunities than difficulties if they are properly explored. Considering the fact that the company has many stores in other States of the country, constant studies are performed in relation to the cultures and customs of each region served, as well as in relation to the main fashion events in each region. This type of analysis is seen as an opportunity to increase sales when associated with meeting seasonal sales demand.

5. FINAL CONSIDERATIONS

As seen in the statements from the interviewees, the acquisition of new technologies, the acquisition and use of other software and the merging of the IT and BI areas under the same management show the concern of the researched company to significantly invest in IS and in its use in an integrated manner with the MIS and with other company's databases, which allow analyzing customers, the market and, though poorly, the competition as well.

The close-knit relationship between Marketing, Business Intelligence and Information Technology shows the need for adaptation of the reality and the culture of the company to the use of information. By analyzing the benefits provided by the MIS, it is possible to see the dedication of the company to obtain information about its customers, in order to strengthen their relationship, as well as the search for meeting their customers' needs.

The company uses information more as a support to the risk reduction management in decision making than to the competitive advantage creation, although it is moving in the direction of the use of information as a strategic resource, for the purpose of providing a better performance of the operations and new business opportunities, as it has recently integrated Business Intelligence and Information Technology under the same management.

The search for and creation of a competitive advantage can be maximized if the company uses the MIS effectively, increasing the possibility of profiting from the implemented innovations and from identifying other demands that are not met by its competitors, demands which the company would have conditions to explore (Kotler & Keller, 2006; Gounaris, Panigyrakis & Chatzipanagiotou, 2007; Mattar et al., 2009; Gupta, 2012). The information obtained about customers and the market trends prompted the group to opt for the production of their own products, and, consequently, their distribution by their own stores.

In the company's business sector, the products have a short life cycle, which challenges it to make speedy and flexible market plannings, where the use of information is essential, in accordance with what the pertinent literature presents (Swartz & Iacobucci, 1999; Sisodia, 1992; Lovelock & Whright, 2005; Levy & Weitz, 2000; Pinto et al., 2006; Minciotti, 1992; Cravens & Piercy, 2006; Kotler & Keller, 2006; Mattar et al., 2009).

Although the information access restrictions, based on the creation of profiles, cause delays in the development of projects and in the definition of plannings, the research permitted to see that the MIS provides the benefits presented in the pertinent literature; however, in order to further enjoy such benefits, there is still the need of its integrated use with the company's IS.

Within the limitations of this work, the adopted method to perform the field research can be mentioned, as it does not allow for generalizations. However, it is important to highlight that, despite this limitation, the objective established, which is the verification of the benefits obtained with the use of the MIS, was achieved. Another evident limitation is in regards to performing a single case study; it is believed that the possible comparison with other case studies could further clarify the treatment of the flow and distribution of information, which, in this research, was limited to the access based on the creation of user profiles.

As a manner for contributing to further research, the exploration of other variables is recommended, such as the necessary information for decision-making processes and environmental analysis, regarding this research's problem. Also, it is recommended that similar research be done, and also of a quantitative nature in the business sector in question and in other relevant ones, for better assessment of the management of information that the marketing information system provides for creating and maintaining competitiveness, whether due to the scarcity of empirical studies or due to economic representativeness.

Footnote

1 The operational theoretical model used in the field research, by graphic representation, as in the illustrated one, was not found in the most recent editions of the work done by the author.

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