Understanding the Concept and Definition of Market Information System

Every time a farmer loads their produce onto a truck without knowing today’s market price, they are gambling. They might sell at a loss. They might reach a market already flooded with the same commodity. This information gap – between what is happening in the market and what producers and sellers actually know – is precisely the problem that a Market Information System (MIS) is designed to solve. In post-harvest management, where decisions about storage, transportation, pricing, and sale must be made quickly, having a well-functioning MIS is not a luxury. It is a necessity.

What is a market information system? 🔗

A Market Information System is a structured, ongoing process for collecting, organizing, analyzing, and distributing information that supports marketing decisions. At its most formal, Kotler’s widely cited definition describes it as “a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control.”

Notice what this definition emphasizes: it is not just a database or a piece of software. An MIS is a system – meaning it involves people, equipment, and procedures working together in a coordinated way. The goal is to get the right information to the right decision-maker at the right time. According to William J. Stanton, an MIS is “an ongoing, organized procedure to generate, analyze, disseminate, store and retrieve information for use in making marketing decisions.” Both definitions agree on one thing: the system must be continuous, not occasional.

In agriculture specifically, market information systems are used to gather, analyze, and disseminate information about prices and other relevant data for farmers, traders, processors, and others involved in handling agricultural products.

Why the definition matters in post-harvest contexts 🔗

Post-harvest management is not just about storage technology or cold chains. A significant part of reducing post-harvest losses involves marketing decisions – knowing when to sell, where to sell, and at what price. According to the FAO, access to timely information on prices and quantities plays a crucial role in reducing the risk of financial loss in a market transaction. A farmer armed with reliable price data can decide whether or not to harvest at a given time, avoiding sending produce to an already glutted market where the price received would not cover harvest, packaging, and transport costs.

This is the practical power of a properly defined MIS. It converts raw, scattered data about the marketing environment – prices at different wholesale markets, competitor activity, legal standards for export, available distribution channels – into structured, usable intelligence that informs decisions.

Core elements embedded in the definition 🔗

Breaking down the definition reveals several key operational elements that together define what an MIS is and how it functions.

People, equipment, and procedures 🔗

An MIS is not just a technological tool. The human element – field agents collecting price data, analysts interpreting trends, managers acting on findings – is central. Equipment includes the tools used to collect, store, and transmit data: from paper-based forms to mobile phones to electronic databases. Procedures are the rules and methods governing how data is collected, validated, and distributed. Kotler recognizes that an MIS is a compound network composed of interrelated connections between people, machines, and procedures providing a flow of structured information from both internal and external institutional sources.

Collection, sorting, analysis, and evaluation 🔗

Raw data alone has little value. An MIS collects data from multiple sources – market arrivals, competitor prices, legal standards, distribution channel performance – and then sorts and analyses it to extract meaningful patterns. Evaluation involves assessing the accuracy and relevance of that data before it reaches the decision-maker. These definitions imply that an MIS is carefully designed to process and make available pertinent and timely information to marketing decision-makers, not just raw figures.

Timely and accurate distribution 🔗

The value of market information decays rapidly. A price quoted yesterday may be irrelevant today. This is why timeliness is built into the very definition of an MIS. Market news quickly becomes outdated, requiring frequent updates. Distribution channels – radio, SMS, online portals, extension agents – must be efficient enough to close the gap between when data is collected and when it reaches the farmer or trader who needs it.

What kind of information does an MIS cover? 🔗

An MIS covers a broad range of data relevant to the marketing environment. In agricultural and post-harvest contexts, this typically includes the following categories.

Price and quantity data 🔗

This is the most fundamental type of information. It includes current prices at rural assembly markets, wholesale markets, and retail markets, as well as data on quantities available and traded. The FAO defines a Market Information Service as involving the regular collection of information on prices and, in some cases, quantities of widely traded agricultural products from relevant markets, disseminated in a timely and regular manner through various media to farmers, traders, government officials, policymakers, and consumers.

Channel and competitor information 🔗

Beyond prices, an MIS must capture information about available marketing channels – which routes, intermediaries, or platforms connect producers to consumers. Competitor monitoring is also critical. Longer-term market intelligence covers competing suppliers, buyers’ needs, product specifications, and market trends – all necessary for strategic decisions such as which crops to grow or which markets to target.

Legal and regulatory standards 🔗

Marketing decisions cannot be made in isolation from the legal environment. Quality standards, grading requirements, packaging regulations, import-export rules, and administered pricing policies all affect how and where produce can be marketed. A complete MIS captures and communicates this regulatory information so that producers and traders remain compliant and competitive.

Environmental and macro-level factors 🔗

Prices are shaped not only by supply and demand at local markets but also by broader economic conditions, government policies, and even weather patterns. Kotler notes the importance of monitoring the marketing environment for changes in buyer behavior, competition, technology, economic conditions, and government policies. This wider environmental scanning enables an MIS to support not just immediate operational decisions but also medium- and long-term planning.

The four components of an MIS 🔗

The definition of an MIS is best understood through its four standard components, each serving a distinct role in the information flow.

Internal records system 🔗

This component draws on data already available within an organization – sales records, inventory levels, order histories, pricing logs, and financial data. It is the most accessible part of an MIS because the data already exists; it simply needs to be organized and interpreted. All enterprises that have been in operation for any period of time have a wealth of internal information, though it often goes underutilized because it remains fragmented across departments or individuals.

Marketing intelligence system 🔗

This component focuses on systematically gathering information about the external environment – competitor behavior, market trends, regulatory changes, and consumer sentiment. It is less formal than research, often relying on sales representatives, distributor feedback, trade publications, and direct market observation. According to Kotler, a marketing intelligence system is a set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment.

Marketing research system 🔗

Unlike ongoing intelligence gathering, marketing research is formal, systematic, and problem-specific. It is used when a specific question needs a structured answer – for instance, which packaging format consumers prefer, or what price point makes a new product viable. According to Kotler, marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing the company.

Marketing decision support system (MDSS) 🔗

This component provides the analytical tools – models, statistical methods, databases – that help managers interpret information and make decisions. It transforms processed data into actionable recommendations. The MDSS ensures that information gathered through the other three components is not just stored but actively used to guide marketing strategy, pricing, product development, and distribution planning.

MIS and food market transparency at a global scale 🔗

The importance of market information systems extends well beyond individual farms or agribusinesses. At the international level, the lack of reliable, up-to-date information about crop supply, demand, and export availability was identified as a key driver of the food price crises of 2007-08 and 2010. In response, the G20 established the Agricultural Market Information System (AMIS) in 2011 – an inter-agency platform hosted by the FAO to enhance food market transparency and encourage coordinated international policy responses. AMIS covers major food crops including wheat, maize, rice, and soybeans, and brings together eleven international organizations to improve the quality and availability of market data globally.

This global example reinforces why the concept and definition of an MIS matter. When information systems fail – when data is inaccurate, late, or inaccessible – the consequences cascade from individual farmer decisions all the way up to international food security. It is commonly understood that long transaction chains, lack of transparency, lack of standards, and insufficient access to markets have perpetuated low incomes in predominantly agrarian economies. A well-defined and properly functioning MIS directly addresses each of these structural problems.

MIS vs. raw data collection: a critical distinction 🔗

One of the most important aspects of the definition of an MIS is what it is not. It is not simply a data collection exercise. Many agricultural market information initiatives in developing countries have failed precisely because they gathered data without building the systems necessary to analyze, validate, and deliver that data in a useful form. A large percentage of MIS initiatives have functioned primarily as data-gathering exercises – and even that was often done inadequately, frequently resulting in inaccurate figures that reached farmers too late to be of practical use.

A true MIS, as the definition makes clear, is a structured system. It closes the loop between data collection and decision-making. It is not enough to know that tomato prices at a distant wholesale market are high today; the farmer needs that information early enough to act on it, in a format they can interpret, through a channel they can access. This is the design challenge at the heart of building an effective MIS.

What do you think? Given that timely price information can directly influence whether a farmer profits or loses on a harvest, what barriers do you think prevent smallholder farmers in developing regions from accessing functional Market Information Systems? And as digital tools like SMS and mobile internet become more widespread, do you think private or public institutions are better placed to build and sustain these systems?

References

1. https://www.fao.org/4/w3241e/w3241e0a.htm
2. https://en.wikipedia.org/wiki/Marketing_information_system
3. https://en.wikipedia.org/wiki/Market_information_systems
4. https://www.fao.org/4/AB795E/ab795e02.htm
5. https://www.ijrti.org/papers/IJRTI2208129.pdf
6. https://www.studocu.com/row/document/kca-university/principles-of-marketing/marketing-information-system/17906939
7. https://agribusinessedu.com/why-is-market-information-important/
8. https://www.fao.org/e-agriculture/forumtopics/reference-market-information
9. https://www.scribd.com/document/492720688/chapter-5-Marketing-information-system
10. https://en.wikipedia.org/wiki/Agricultural_Market_Information_System