Marketing information forms the foundation of knowledge. Information becomes knowledge when it is discriminated, classified, processed and assembled in an appropriate manner. In as much as knowledge rests on information, the latter assumes an added significance in the era of knowledge.
In fact, we need to grapple with a third entity here besides information and knowledge. It is data. We have to remember that what is first generated is data and it is data that leads to information, which, in turn leads to knowledge. Just as information becomes knowledge when processed properly data becomes information when processed properly. The role of processing in converting data into marketing information can easily be grasped from the oft-quoted statement of exasperated marketing executives; I am drowned in data, but starved of information. Marketing decisions for that matter, decisions in any management function need information and not just data.
Knowledge is the final entity in the sequence. And business decisions need knowledge and not just data or information. A firm may have in its possession unlimited data/information, internal and external. But extracting knowledge from them will need a special effort and systems support. The Internet, for example, is a source of unlimited data/information, but translating the information into useful cutting edge knowledge will need a special effort. And, the ability of the firm to create relevant knowledge from data/information is what matters ultimately.
It is the above context that renders information doubly significant for business firms in modern times. Now, a business firm actually needs several components of knowledge. It needs knowledge of its business operations. It needs knowledge of its value chain and those of its customers, suppliers and competitors.
Developments that Compel Firms to Manage Knowledge Systematically,
* The huge and non-stop explosion in knowledge.
* The increase in the need for knowledge in managing a business.
* The rapid pace at which knowledge is being replaced and regenerated. Existing id becoming obsolete and is being replaced by new knowledge rapidly.
* The resultant need to be ultra fast in acquisition of knowledge as well as in its application in tapping business opportunities.
* The new appreciation by firms that knowledge remains under leveraged and for leveraging it properly, it needs to be managed systematically.
It needs knowledge of the technology trends. It also needs knowledge of management techniques. Again, while what a firm knows is of importance, how it uses what it knows and how fast it can acquire relevant new relevant new knowledge are of greater importance. Interestingly the firm needs knowledge for using its knowledge and for gaining new knowledge. And all the knowledge accumulated by the firm in its areas of operations and activities constitutes its intellectual capital.
Being the strategic function of business, marketing needs knowledge the utmost. Marketing also holds the burden of aligning the firm properly with the environment. And, responding correctly to environment is a knowledge-intensive task, especially in today’s intensely competitive, rapidly changing, knowledge oriented world. Accordingly, knowledge management gains an added significance in the case of marketing.