chap17.ppt 217KB May 20 2010 09:29:48 PM

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Chapter 17

Marketing Information Systems

MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell

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Introduction

 Marketing was the first functional area to exhibit Marketing was the first functional area to exhibit an interest in MIS

an interest in MIS

 The marketing information system has three The marketing information system has three

subsystems; the accounting information system

(AIS), marketing research, and marketing

intelligence

 Functional information systems: the conceptual Functional information systems: the conceptual systems should be "mirror images" of the physical

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Functional information systems

Functional information systems

Marketing information system Manufacturing information system Finance information system Human resource information system Marketing function Manufacturing function Finance function Human resources function

Physical system of the firm

Functional Information Systems

Represent

Functional Physical Systems

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Marketing Principles

 Marketing mixMarketing mix – Product_Product

– Promotion_Promotion – Place_Place

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The Marketing Information

System (MKIS)

 Kotler's marketing nerve centerKotler's marketing nerve center  3 information flows3 information flows

– _Internal_Internal

» Gathered in firm_{Gathered in firm}

– _Intelligence_Intelligence

» _{From environment}_{From environment}

– _{Communications}_{Communications}

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Firm Environ-ment

Marketing intelligence

Marketing communications Internal

marketing information

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Marketing Information

System (MKIS) Definition

A computer-based system that works in conjunction with other functional

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An MKIS Model

 OutputOutput

– Product_Product – Place_Place

– Promotion_Promotion – Price_Price

– Integrated mix_{Integrated mix}

 DatabaseDatabase

 InputInput

– AISAIS

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Input

subsystems Output subsystems

D D A A T T A A B B A A S S E E Accounting information system Marketing research subsystem Marketing intelligence subsystem Internal sources Environmental sources Product subsystem Place subsystem Promotion subsystem Price subsystem Integrated-mix subsystem Users Data

Data InformationInformation

MKIS Model

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Accounting Information

System

 Sales order data is input.Sales order data is input.  AIS provides data for AIS provides data for

– _{Periodic reports}_{Periodic reports} – Special reports_{Special reports}

– Mathematical models and knowledge-based _{Mathematical models and knowledge-based}

models

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Marketing Research

Subsystem

 Managers use marketing research to gather Managers use marketing research to gather

information

– _{Gathered from customers and prospects}_{Gathered from customers and prospects}

– _{Purchased or procured from other organizations}_{Purchased or procured from other organizations}  Processed using marketing research Processed using marketing research

subsystem

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Primary and Secondary Data

 Used by marketing research subsystem Used by marketing research subsystem

 Primary data are collected by the firmPrimary data are collected by the firm

 Examples of primary dataExamples of primary data – _Survey_Survey

– _{In-depth interview}_{In-depth interview} – _Observation_Observation

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Primary and Secondary

Data

[cont.]

 Secondary dataSecondary data – Mailing lists_{Mailing lists}

– Retail sales statistics_{Retail sales statistics} – Video retrieval systems_{Video retrieval systems}

 Some secondary must be bought and some Some secondary must be bought and some

is free

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Marketing Research Software

 Graphics packages (print maps)Graphics packages (print maps)

 Makes market research a reality for all Makes market research a reality for all

firms

 Statistical analysisStatistical analysis

 Expertise to interpret software outputs is Expertise to interpret software outputs is

the key to successful use of these tools

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Marketing Intelligence

Subsystem

 Ethical activities aimed at gathering Ethical activities aimed at gathering

information about competitors

 Not to be confused with industrial Not to be confused with industrial

espionage

 Each functional information system has an Each functional information system has an

intelligence responsibility

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Product Subsystem

 Product life cycle supported through:Product life cycle supported through:

1) Introduction

2) Growth

3) Maturity

4) Decline

 Information answers 3 key questions:Information answers 3 key questions:

1) Introduce?

2) Change strategy?

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Sales

Sales

Volume

STAGES

Introduction Growth Maturity Decline

Should the product be introduced

Should the product strategy be changed

Should the product be

deleted

The Product Life Cycle and Related

Decisions

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New Product Evaluation

Model

 Another part of the product subsystemAnother part of the product subsystem  New product committeeNew product committee

 Explicitly considers production as well as Explicitly considers production as well as

marketing

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Place Subsystem

 Channel of distribution may be short or longChannel of distribution may be short or long

 Material, money, and information flow through Material, money, and information flow through

the distribution channel

the distribution channel – Resource flows_{Resource flows}

– Feedback_Feedback

» _{Flows in direction opposite to the material flow}_{Flows in direction opposite to the material flow}

– _{Feedforward information}_{Feedforward information}

» _{Flow of information to customer}_{Flow of information to customer}

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Material, Money, and

Information Flow

Supplier

Supplier Material _facturer_facturerManu-Manu- Material Whole-Whole-_saler_saler Material RetailerRetailer Material ConsumerConsumer

Money

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Promotion Subsystem

Includes:

(1) advertising

(2) personal selling

(3) sales promotion

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Difficult Area to

Computerize

Successful examples

1. Sales promotion --OCR scanning of barcodes

on coupons

2. Personal selling --laptops

A. Order entry A. Order entry

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Pricing Subsystem

Two Basic Approaches

1. Cost based (AIS provides the basis)

2. Demand-based (use what-if model)

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Integrated-Mix Subsystem

 BRANDAID ModelBRANDAID Model

– _{Solid arrows: influences}_{Solid arrows: influences} – Dashed arrows: responses_{Dashed arrows: responses}

 Environmental and retailer influence on the Environmental and retailer influence on the consumer

consumer

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ProductProduct PricePrice AdvertisingAdvertising PromotionPromotion

Price-off coupons Price-off coupons

PremiumsPremiums SamplingsSamplings Package:Package:

Graphics & Graphics & functionfunction AssortmentAssortment SalesSales AvailabilityAvailability

Price Price PromotionPromotion AdvertisingAdvertising ProductProduct PricePrice AdvertisingAdvertising PromotionPromotion

Price-off couponsPrice-off coupons

PremiumsPremiums SamplingSampling Package:Package:

Graphics &Graphics &

functionfunction

Assortment Assortment Seasonal Seasonal trend trend Manufacturer Manufacturer Retailer Retailer Competitor

Competitor EnvironmentEnvironment

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-10 -5 0 5 10 15 20 25 30

0 12 24

Months

S

A

L

E

S

Influence of Four Variables, Taken

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Sales

Sales

Months

New Package

Model Actual

A Model Cannot Cope with Unexpected

Events

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The MKIS in Fortune 500

Firms

 Preprocessed information 71% of 1990 Preprocessed information 71% of 1990

firms

 Mathematical modelingMathematical modeling

– _{Generally down}_{Generally down}

– _{Reason is unknown}_{Reason is unknown}

– _{Except for production deletion and advertising}_{Except for production deletion and advertising}

media selection

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The MKIS in Fortune

500 Firms

[cont.]

 Support for management levelsSupport for management levels – Models_Models

– Overall_Overall

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75 75 61 56 51 40 92 54 77 64 30 14 57 48 41 0 20 40 60 80 100

Retrieving data Storing data Processing data

P er ce n t o f co m p u te r u se rs 1980 1990 N.A. N.A. N.A.

1980

1990

Retrieving Data

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1980 1990

Strategic planning level .17

Strategic planning

level .30

Management control

level .70

Management control

level .54

Operational control level .13

Operational control level .16

Note: The percentages are based on the number of respondents ranking the particular management levels first.

Model Use Is Becoming More Balanced

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Overall Support from the Marketing

Information System Is Becoming More

Balanced

Strategic planning level

.25

Management control level

.57

Operational control

Strategic planning level

.28

Management control level

.40

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The 1990 Managers Placed More Emphasis

on Planning and Less on Directing Than

Did

Their 1980 Counterparts

1980

1980 19901990

Planning .37

Organizing .03

Directing .25

Controlling .34

Planning .51

Organizing .06

Directing .07

Controlling .36

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Marketing Managers Are Using the Computer

More

for Making the Difficult Price and Promotion

Decisions

Product .49

Price .27

Place .16

Promotion .08

Product .32

Price .39

Place .15

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How Managers Use the MKIS

Integrated

Product Place Promotion Price Mix

VP of marketing X X X X X Other executives X X X X X Brand managers X X X X X

Sales manager X X

Advertising manager X X

Manager mktg resrch X X X X X Manager of product planning X

Manager of physical distribution X

Other managers X X X X X

Subsystem

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MKIS Use by Managers

 Industry giants are using the computer as a Industry giants are using the computer as a

marketing tool

– _{To learn about consumer needs and wants}_{To learn about consumer needs and wants} – _{To formulate the marketing mix}_{To formulate the marketing mix}

– To follow-up on how well mix is received by _{To follow-up on how well mix is received by}

the consumers

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Summary

 MKIS MKIS

– Input subsystems_{Input subsystems}

» AIS, Marketing Research, Marketing Intelligence_{AIS, Marketing Research, Marketing Intelligence}

– _{Output subsystems}_{Output subsystems}

» _{Product, Place, Promotion, Price, Integrated Mix}_{Product, Place, Promotion, Price, Integrated Mix}

 Operational MKISs consider management Operational MKISs consider management

and marketing concepts