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Marketing Information Systems in
Tourism and Hospitality Small- and
Medium-sized Enterprises: a Study of
Internet use for Market Intelligence
Emma Wood*
Centre for the Study of Small Tourism and Hospitality Firms, School of Tourism and Hospitality
Management, Leeds Metropolitan University, Calverley Street, Leeds LS1 3HE, UK
ABSTRACT
This study investigates the nature of
marketing information systems (MkIS)
within small- and medium-sized enterprises
(SMEs) and focuses on the importance of
external information and market intelligence.
The sources of market intelligence are
investigated with particular emphasis on
understanding the usefulness of the Internet
for external information gathering. The
empirical research to support the study uses
survey methods to investigate marketing
information systems, market intelligence and
Internet use within hospitality and tourism
SMEs in the Yorkshire and Humber region.
The ®ndings indicate that SMEs in this
sector make use of informal marketing
information systems which mainly
concentrate on internal and immediate
operating environment data. Important wider
market intelligence is underutilised owing
mainly to the resource constraints of these
smaller businesses. The Internet has not yet
been recognised as an important source for
market intelligence despite having the
bene®ts of providing much of the necessary
data more quickly and at a lower cost than
many other sources. Copyright # 2001 John
Wiley & Sons, Ltd.
Received 22 November 1999; Accepted 14 July 2000
* Correspondence to: Emma Wood, Centre for the Study
of Small Tourism & Hospitality Firms, School of Tourism
& Hospitality Management, Leeds Metropolitan University, Leeds LS1 3HE.
Keywords: tourism; hospitality; Internet;
market intelligence; information systems.
INTRODUCTION
A
ccording to a number of studies summarised by Brown et al. (1994) the
service sector tends to be less marketing orientated with less use of external
information than the manufacturing sector.
Sisodia (1992, p. 51) drew the same conclusion,
`While many packaged goods companies have
realised the bene®ts of formal marketing
information systems, most service organisations have not initiated systematic efforts in
this direction’. A later empirical study by Li in
1997 also showed that service organisations are
less likely to possess a marketing information
system.
The majority of marketing information
systems utilise mainly internal data because
this is easy to obtain, but research has shown
that managers require mainly external information on which to base long-term decisions.
Internal data usually is only of operational
importance, whereas strategic decisions require information on market trends, competitor strategies and economic and political
¯uctuations (Xu and Kaye, 1995).
The Internet potentially is a cheap and fast
way to access useful external environmental
data to improve marketing decision-making,
but for this data to be used to its best
advantage it needs to be incorporated into a
marketing information system (MkIS). The
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INTERNATIONAL JOURNAL OF TOURISM RESEARCH
Int. J. Tourism Res. 3, 283±299 (2001)
DOI: 10.1002/jtr.315
Internet, as a source, should then complement
existing sources of internal and external data,
providing a fuller picture on which to base
decisions.
There are increasingly fewer companies who
do not have Internet access and over the past
®ve years there has been exponential growth in
Internet usage for marketing communications
(Hoffman and Novak, 1998). This area of
Internet use has been well documented and
has provided clear and measurable bene®ts to
those companies using this new medium for
promotion and distribution. The usefulness of
the Internet as a source of marketing intelligence has not received as much attention,
however, particularly in the context of SMEs in
the tourism and hospitality sectors (Friel,
1999). Brabston and McNamara (1998) considered the Internet as a `competitive knowledge
tool’ but, other than this research, has been
limited mainly to the areas of library and
information management, such as Swash’s
(1998) article `UK Business Information on
the Internet’.
This paper examines marketing information
systems and the use of the Internet for
obtaining marketing intelligence by SMEs in
the tourism sector. The focus on SMEs is
considered appropriate because, as others
have argued (e.g. Thomas, (1998), their behaviour and engagement with the business
environment is likely to be signi®cantly different to larger organisations in the same sector.
He highlights the importance of the small ®rm
in the hospitality and tourism sector and states
that `there are suf®cient grounds for examining such organisations as a separate analytical
category from both small ®rms in general and
other, larger, tourism and hospitality ®rms.’
Thomas (1998, p. 5).
Consideration was given to the various
de®nitions of smaller businesses within this
sector before concluding that a combination of
characteristics was needed. The Department of
Trade and Industry (DTI) classes businesses
with less than 50 employees as small and those
with more than 50 but less than 250 as
medium-sized. This maximum number of
full-time equivalent employees (less than 250)
was used for the research combined with the
size of business based on room number for the
accommodation sector. Fewer than 100 rooms
Copyright # 2001 John Wiley & Sons, Ltd.
E. Wood
was selected in order to screen out larger hotel
chains. Only independently run businesses
were surveyed, e.g. excluding National Trust
owned tourist attractions. The objective was to
screen out those who may have access to the
marketing information system of a larger
organisation.
This paper begins by reviewing existing
research on three related issues: marketing
information systems, market intelligence and
business use of the Internet. The purpose of
this review is to ascertain the importance of
market intelligence and its use within the MkIS
and to identify how the Internet is being used
and how it could be used to support the MkIS
of small tourism organisations.
The ®ndings of a postal survey of small
tourism ®rms in the Yorkshire Tourist Board
region are then reported.
The aims of the study were to:
(1) identify the current form of MkIS used
within small- to medium-sized service
®rms and to measure the awareness within
this sector of the information available via
the Internet;
(2) determine if and how these ®rms use the
Internet for obtaining marketing intelligence;
(3) gather the opinions of information users
within the target group on the usefulness of
the Internet for market intelligence gathering and to discover what problems have
been encountered or are anticipated with
Internet use for market intelligence.
The paper concludes by developing a `best
practice’ model for incorporating Internet
usage into the MkIS of tourism SMEs.
Marketing information systems
The MkIS of an organisation is a system used
for storing, analysing and collating information in order to support marketing decisionmaking. In the last decade, most MkIS have
made use of information technology (IT) and
this use of IT has allowed the sharing of
information throughout the organisation.
More recently with the increasing availability
of on-line information the IT aspect of the
system has been extended so that data can be
sourced and accessed via an Internet link.
Int. J. Tourism Res. 3, 283±299 (2001)
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285
Figure 1. Information gathering matrix (Source: adapted from Wright and Ashill (1998, p. 132); reproduced
by permission of MCBUP Ltd)
The use of IT within MkIS has become a key
factor in an organisation’s achievement of
competitive advantage. As Talvinen, (1994, p.
8) has argued, `Managing marketing information by means of IT has become one of the most
vital elements of effective marketing’.
The literature on marketing information
systems (Sisodia, 1992; Seth et al., 1993;
Talvinen and Saarinen, 1995; Li, 1997; Weiber
and Kollmann, 1998; Wright and Ashill, 1998)
provides evidence that the existence of such
systems, whether at a simple operational/
transactional level or as a complex decisionsupport system, leads to improvements in
marketing decision-making.
There is some debate as to whether the
system should be formal (systematically
searching for predetermined sources/types of
information on a regular basis) or informal
(where data collection is ad hoc and more
responsive to the needs of the moment). The
`contingency model’ suggested by Wright and
Ashill (1998) favours more informal systems
and is useful for smaller organisations as `it is
accessible to managers who lack the resources
of large organisations, sophisticated computer
systems or formal market research.’ (Wright
and Ashill, 1998 p. 140).
It therefore can be based successfully upon
`informal investigations’ and `routine encounters’ as shown in Figure 1.
A survey of 153 small companies in the
USA by Li (1997) con®rms that `They [small
companies] are not fully exploiting the latest
information technologies to create competitive
Copyright # 2001 John Wiley & Sons, Ltd.
advantages.’ The study concludes that `¼ it is
vital to small ®rms to improve their MkIS
usage in the near future.’ (Li, 1997, p. 34). The
survey covered a wide range of industries in
the service and manufacturing sectors and
there did appear to be a difference based on
industry sector, with service ®rms making less
use of MkIS than manufacturing ®rms. The
®ndings show that small ®rms are not collecting environmental data and are not fully
utilising computerised systems. Here the
emphasis is on generating internal data,
customer data and some competitor information mainly from sales call reports. Although
the study does not investigate directly the
reasons for this underuse of information
systems, it is mentioned that smaller ®rms
are comparatively resource poor and computerised systems are not seen as an essential
business tool.
It would seem, therefore, that SMEs need a
MkIS that is not resource intensive but will still
provide the internal and external information
needed to make good marketing decisions.
Market intelligence
Generally, the terms `business intelligence’,
`market intelligence’ and `competitor intelligence’ are used interchangeably. For the
purposes of this study market intelligence is
de®ned as information obtained from external
sources that can be used for `identifying
problems, changes and opportunities in the
external marketing environment’ (Talvinen,
Int. J. Tourism Res. 3, 283±299 (2001)
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Internet use for Market Intelligence
1994, p. 18).
It has been demonstrated that those companies which take into account the performance
of competitors and changes in the external
environment are considerably more likely to
succeed. However, this is only the case if the
information gained is accurate and used in an
appropriate manner. These factors depend
largely on the source of the information and
the format of the MkIS (Hewitt-Dundas et al.,
1997).
The importance of market intelligence (external data) as a vital component of any
successful MkIS has been emphasised in
previous research. In particular Xu and Kaye
(1995) recommend a shift away from `internal
data management, historical focus to external,
future information scanning and reporting’.
They suggest that an 80:20 ratio for external:internal intelligence is more useful to top
managers. Internal data tends to overload any
formal or informal system and this may be
particularly true in operations-focused service
industries such as tourism. This parallels the
®ndings and recommendations from Li’s
(1997) research into small businesses.
Folsom (1991) interviewed a sample of small
businesses in the service and retail sectors of
the USA in order to assess their market
intelligence practices. The results suggested
that the most common forms of market
intelligence undertaken were monitoring competitor advertisements, asking customers
about competitors and talking with competitors and their employees. They concluded that
small businesses do not aggressively seek
market intelligence information. These ®ndings were mirrored by the research done in
Northern Ireland by Hewitt-Dundas et al.
(1997). Their pilot study of small ®rms identi®ed a weakness in the amount and accuracy of
competitor knowledge held. A survey conducted into various aspects of the tourism and
hospitality sector by Thomas et al. (1997)
covered a number of important marketing
issues, one of which was the amount and type
of marketing research undertaken. The ®ndings showed that the least researched area was
the external business environment and the
most researched area was customer needs.
This result is emphasised by Friel (1998, p.
130), where he discusses the danger of small
Copyright # 2001 John Wiley & Sons, Ltd.
E. Wood
tourism and hospitality ®rms not monitoring
the business environment. He argues that in
such a competitive and dynamic environment
market intelligence is necessary to allow ®rms
to respond to and manage change and to
exploit opportunities. Friel goes on to suggest
that this lack of external monitoring indicates a
form of marketing myopia where a concentration on research into customer needs leads to a
neglect of important environmental changes.
This again ties in with the ®ndings of Xu and
Kaye (1995) and suggests that a switch in
emphasis is needed.
The majority of literature reviewed in the
area of market intelligence (e.g. Folsom, 1991;
Sisodia, 1992; Seth et al., 1993) was published
prior to the world-wide adoption of the
Internet. These studies do not, therefore, refer
to the Internet as a particular source of market
intelligence and it may be that the use of
market intelligence in smaller companies has
grown or will grow as a result of this new
method of access.
Business use of the Internet
Several studies have highlighted the amount of
valuable business information available on the
Internet. For example, McGinty (1998) states
that the Internet is a useful aid for the marketing efforts of small businesses owing to the
wealth of marketing-related information available at no charge. Brabston and McNamara
(1998) list the amount of useful market
intelligence data available and make particular
reference to how this information can aid in
analysing the industry environment and the
macroenvironment. Swash (1998) categories
the amount and value of UK business information available on the Internet, concluding that
it is a major rather than peripheral information
source.
However, the majority of recent research
articles and discussion papers relating to
marketing and the Internet concentrate on the
Internet as a tool for promoting, selling and
distributing products and services rather than
the value of the Internet as a marketing
information source. See, for example, Heinen
(1996), Poon and Jevons (1997), Poon and
Swatman (1997), O’Connor and Galvin (1997)
and O’Connor (1999).
Int. J. Tourism Res. 3, 283±299 (2001)
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Table 1. Business use of the World Wide Web
(source: IMRG (1996), as cited in O’Connor and
Galvin (1997, p. 139)
Business use
Information gathering
Collaborating with other organisations
Marketing
Customer service
Information publishing
Selling products and services
Purchasing products and services
Per cent
71
54
46
38
33
33
23
Use of the Internet is surveyed in Thomas et
al. (1997). The results show that Internet usage
is increasing signi®cantly within small ®rms in
the tourism and hospitality sector and that up
to one-quarter of these ®rms are currently
using the Internet as a promotional medium. It
may be that Internet use for information
gathering is also on the increase in this sector.
If so this will go some way to addressing the
current dearth of business environment monitoring undertaken by these ®rms, as identi®ed
by Main (1999) and Friel (1999).
Poon and Swatman (1997) researched small
service sector companies (less than 50 employees) in Australia to determine business use of
the Internet. They found that small business
use of the Internet is mainly as a communication tool (alongside telephone and fax) and as a
promotional tool, although there were also a
number who were using it for information
gathering purposes. They state that Internet
use gives small businesses access to an
information infrastructure greater than that
owned by any individual large organisation.
However, their research does not show that
these small companies are taking advantage of
that access.
A European survey of 5000 retailers, banks
and commercial organisations found that
information gathering is by far the most
common use of the Internet (Table 1). This
suggests that a large number of the businesses
surveyed use the Internet as an information
source than use it as a marketing tool. This
contradicts some of the ®ndings of other
research. However, the extent of this use and
whether this information is used as market
intelligence is not clear.
Copyright # 2001 John Wiley & Sons, Ltd.
Research by Katz and Aspden (1997) and
Brabston and McNamara (1998) considers the
factors that limit Internet usage. Katz and
Aspden (1997) investigated `motivations for
and barriers to Internet usage’. They found
that the Internet was used by wealthier and
more highly educated people and that social
and work networks were important in stimulating interest and providing support. The
barriers to use were cost and a lack of understanding of how to use the Internet. Their
research showed that even experienced IT
users had dif®culty getting started.
Although this research was carried out
amongst the general public rather than organisations, smaller businesses could well be
subject to these same factors. In these smaller
®rms individual personalities and experiences
are likely to have a substantial in¯uence on
organisational decisions.
Barriers to Internet use are discussed by
Brabston and McNamara (1998). Indeed, they
provide a valuable summary of factors that are
likely to limit business use of the Internet.
These factors include older managers not
being used to working with a computer at
their desk and viewing PCs as support tools to
be used by clerical staff. They also identify
problems with the Internet itself in that this
ungoverned network provides a vast amount
of information of variable quality. Accessing
useful, reliable data therefore can be frustrating and time consuming.
Despite their discussion of the obstacles to
use, Brabston and McNamara (1998, p. 164)
conclude that the Internet `¼ is easy to learn
and use, user-friendly, relatively ef®cient and
effective.’
Swash (1998) suggests that in order to
overcome some of the problems identi®ed
with Internet use perseverance and practice
are necessary from the business manager. The
main obstacle therefore might be in convincing
them that this effort will eventually pay
dividends.
From the literature discussed above it can be
concluded that a MkIS is desirable and
perhaps necessary in order to compete successfully. However, it may not need to be
formally structured or resource intensive. A
more important factor than the structure
appears to be the extent of external informaInt. J. Tourism Res. 3, 283±299 (2001)
15221970, 2001, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/jtr.315 by Florida International University, Wiley Online Library on [07/11/2022]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
Internet use for Market Intelligence
tion gathered compared with internal data.
The Internet is undoubtedly a rich source of
external information. In order for smaller
companies to take advantage of it they need
to overcome any initial problems, persevere
and to integrate the information found with
internal data within a formal or informal MkIS.
METHODOLOGICAL APPROACH AND
RESEARCH DESIGN
The primary research method used to meet the
objectives of the study was a largely quantitative postal survey. This method was chosen
after consideration of general methodological
issues (positivist versus phenomenological
approaches) and previous research undertaken in similar areas and sectors.
A survey was chosen as the main method of
data collection as it is necessary to quantify
MkIS, market intelligence and Internet usage
within the diverse service sector in order to
meet the objectives of the research. It is
recognised that in several studies of the service
sector survey research has been found to be
inappropriate as `the characteristics of services
are predominantly intangible and the aspect of
accessibility and timing will be signi®cant in
the actual delivery of the service’ (Gilmore and
Carson, 1996). This suggests that qualitative
research would be more appropriate but as
this research does not seek to gather data on
the service encounter itself but on the use of a
marketing tool these ®ndings do not necessarily apply.
The survey population
The type of company selected was to cover two
main subgroups of tourist attractions and
accommodation. These companies were classi®ed as small or medium sized using the DTI
classi®cation of less than 250 employees and
were independently run. The accommodation
sector was also categorised by number of
rooms or sites (fewer than 100).
The Yorkshire and Humber region was
chosen owing to the number and variety of
suitable SMEs in the sector of interest situated
within this region and its accessibility.
Copyright # 2001 John Wiley & Sons, Ltd.
E. Wood
Survey sample size and method
Three hundred companies were selected so
that with an expected response rate of 20% the
survey would result in at least 60 completed
questionnaires. This response rate is typical of
similar postal surveys within this ®eld, such as
Thomas et al (1997) and Seth et al (1993). This
would allow for a variety of statistical techniques to be used for analysis of the data and
for some separate analysis of the two subgroups if major differences became apparent.
As the research was interested in both the
total population and possible comparisons
between the two strata a compromise was
required between an even split (suitable for
comparison) and a proportional split (suitable
for population total) (Barnett, 1991). This
resulted in the ®nal sample size of 100 companies from the attractions subsector and 200
from the accommodation subsector. Strati®ed
random sampling was used to select the
required number of each type of company
from the sampling frame.
Data collection strategies
The survey was administered in the form of a
postal questionnaire. Personal and telephone
interview methods were rejected owing to the
geographic range of the sample, cost, the
proposed sample size and the limited details
provided by the sampling frame.
In order to improve the response rate prenoti®cation was considered but recent research
suggests that this does little more than increase
costs (Wright, 1995). The same research does
suggest that reminder letters can signi®cantly
improve response rates, especially if they
include a duplicate questionnaire. These therefore were sent out 15±20 days after the initial
questionnaire.
A pilot survey of ®ve companies was
undertaken in order to test the appropriateness
of the questions, comprehension, relevance,
response rates, etc. The respondents in the
pilot survey were then contacted by telephone
to discuss the questionnaire’s shortcomings in
more detail and the results used to reformulate
and clarify some of the survey questions.
Ambiguous wording was made more explicit
and clearer instructions including examples
Int. J. Tourism Res. 3, 283±299 (2001)
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Table 2. Analysis of response/non-response
Attractions
Accommodation
Total sample
Percentage
responding
Percentage of
usable
responses
35/100 = 35
39/200 = 20
74/300 = 25
29/100 = 29
23/200 = 12
52/300 = 17
added in two sections of the questionnaire.
The pilot study also identi®ed that the main
survey should be targeted at the owner/
director of the organisation. It was deemed
unlikely in organisations of this size and type
that functional managers in information systems or marketing would exist.
market intelligence purposes. These were used
to determine if and how these ®rms use the
Internet, to gather opinions on the usefulness
of the Internet for market intelligence gathering, and to discover what problems have been
encountered or are anticipated with Internet
use for market intelligence.
A supplementary section ensured that the
opinions of non-Internet users were also
obtained. These respondents’ opinions were
as important in meeting the research objectives
as those of Internet users and they were
predicted to be a sizeable proportion of the
responding organisations.
SURVEY FINDINGS
Response rate
The survey instrument
The ®rst sections of the questionnaire gathered
classi®cation data, which included factors such
as company age, respondent’s position and
time with the company and the perceived
dynamics of the business environment. These
were some of the factors identi®ed in previous
research into information systems and Internet
usage by studies such as those undertaken by
Seth et al. (1993) and Whyte and Bytheway
(1996).
The next section was designed to identify
the current marketing information system
used within the organisation through a mixture of closed and open questions. The ®nal
two sections concentrated on Internet use for
The ®nal number of usable responses received
prior to the cut off date was 52 out of 300 (17%).
Twenty-one further replies were received but
these could not be used for a number of
reasons, including the size of the business, the
nature of the organisation and non-completion
of the main areas of the survey (Table 2).
Due to the topic of the survey it is felt that a
larger number of non-respondents were without Internet access. These organisations may
view the Internet as less relevant to their own
operations, leading to a lower number of
responses. The larger amount of non-response
within the accommodation sector is partly
explained by the larger number of very small
owner-managed businesses. Three responding
Table 3. Sample characteristics
Characteristic
Category
Number
Percentage
Company size
Less than 50 employees
51 to 250 employees
Less than 2 years
3 to 10 years
More than 10 years
Attraction
Accommodation
Yes
No
Owner, Managing Director
General Manager
Marketing
Other
38
14
6
24
22
29
23
24
27
18
22
5
7
73
27
12
46
22
56
44
47
53
35
42
10
13
Business age
Industry subsector
Internet access
Respondent’s position
Copyright # 2001 John Wiley & Sons, Ltd.
Int. J. Tourism Res. 3, 283±299 (2001)
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Internet use for Market Intelligence
E. Wood
Table 4. Chi-squared results of difference between industry sectors
Calculated
chi-squared
Critical value
Chi-squared = 1.481
Chi-squared = 0.040
Chi-squared = 16.974
Chi-squared = 4.682
Chi-squared = 1.092

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