Chapter 18Chapter 18Marketing Information Systems

MANAGEMENT INFORMATION SYSTEMS 7/ERaymond McLeod, Jr.

Copyright 1998 Prentice-Hall, Inc.

IntroductionIntroduction

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

The marketing information system has three subsystems; the accounting information system, marketing research, and marketing intelligence

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

Functional information systemsFunctional information systems

Marketinginformation

system

Manufacturinginformation

system

Financeinformation

system

Human resourceinformation

system

Marketingfunction

Manufacturingfunction

Financefunction

Humanresourcesfunction

Physical system of the firmPhysical system of the firm

Functional Information Systems Functional Information Systems RepresentRepresent

Functional Physical SystemsFunctional Physical SystemsInformation

resourceinformation

system

Information Servicesfunction

Marketing PrinciplesMarketing Principles

Marketing mix– Product– Promotion– Place– Price

The Marketing Information The Marketing Information System (MKIS)System (MKIS)

Kotler's marketing nerve center 3 information flows

– Internal– Intelligence (from environment)– Communications (to environment)

FirmEnviron-ment

Marketing intelligence

Marketing communications

Internalmarketinginformation

Kotler’s Information FlowsKotler’s Information Flows

Marketing Information Marketing Information System (MKIS) DefinitionSystem (MKIS) Definition

A computer-based system that works in conjunction with other functional information systems to support the firm's management in solving problems that relate to marketing the firm's products.

An MKIS ModelAn MKIS Model Output

– product

– place

– promotion

– price

– integrated mix

Database Input

– AIS

– marketing research

– marketing intelligence

Input subsystems

Output subsystems

DD

AA

TT

AA

BB

AA

SS

EE

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

DataData InformationInformationMarketing Information System ModelMarketing Information System Model

Accounting Information Accounting Information SystemSystem

Sales order data is input. AIS provides data for

– Periodic reports– Special reports– Mathematical models and knowledge-based

models

Marketing Research Marketing Research SubsystemSubsystem

Gathered from customers and prospects

Primary versus Secondary Primary versus Secondary DataData

Primary data are collected by the firm Examples of primary data

– Survey– In-depth interview– Observation– Controlled experiment

Primary versus Secondary Primary versus Secondary Data Data (continued)(continued)

Secondary data– Mailing lists– Retail sales statistics– Video retrieval systems

Some secondary must be bought and some is free

Marketing Research SoftwareMarketing Research Software

Graphics packages (print maps) CATI (computer-aided telephone

interviewing) where the computer displays the next question to ask

Statistical analysis

Marketing Intelligence Marketing Intelligence Subsystem Subsystem

Ethical activities aimed at gathering information about competitors

Each functional information system has an intelligence responsibility

Product SubsystemProduct Subsystem

Product life cycle; introduction, growth, maturity, and decline

Information answers 3 key questions:1.Introduce?

2.Change strategy?

3.Delete?

SalesSalesVolumeVolume

STAGESSTAGES

Introduction Growth Maturity Decline

Should theproduct beintroduced

Should the product strategy be changed

Should theproduct be

deleted

The Product Life Cycle and Related The Product Life Cycle and Related DecisionsDecisions

New Product Evaluation New Product Evaluation ModelModel

New product committee Explicitly considers production as well as

marketing Lists decision criteria and their weight

Place SubsystemPlace Subsystem

Channel of distribution may be short or long

Material, money, and information flow through the distribution channel– Resource flows– Feedforward information– EDI fits in here

Material, Money, and Material, Money, and Information FlowInformation Flow

Two-way information flow

SupplierSupplierManu-Manu-

facturerfacturerWhole-Whole-salersaler RetailerRetailer ConsumerConsumerMaterial MaterialMaterialMaterial

MoneyMoney MoneyMoneyMoneyMoneyMoneyMoney

Promotion Subsystem Promotion Subsystem Includes:Includes:

(1) advertising

(2) personal selling

(3) sales promotion

A Difficult Area to A Difficult Area to ComputerizeComputerize

Successful examples1. Sales promotion --OCR scanning of barcodes

on coupons

2. Personal selling --laptopsA.Order entry

B.Customer call reports

Pricing Subsystem Pricing Subsystem Two Basic ApproachesTwo Basic Approaches

1. Cost based (AIS provides the basis)

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

Integrated-Mix Subsystem Integrated-Mix Subsystem

BRANDAID Model– Solid arrows: influences– Dashed arrows: responses

Environmental and retailer influence on the consumer– Individual influences– Combined influences

Unexpected influences

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

SeasonalSeasonaltrendtrend

ManufacturerManufacturerManufacturerManufacturer

RetailerRetailerRetailerRetailer

CompetitorCompetitorCompetitorCompetitor EnvironmentEnvironmentEnvironmentEnvironment

ConsumerConsumerConsumerConsumer

BRANDAID BRANDAID

Sales Sales DistributionDistribution

PricePriceTrade promotionTrade promotion

SalespersonsSalespersonsPacakge assortmentPacakge assortment

PricePriceTrade promotionTrade promotion

SalespersonsSalespersonsPacakge assortmentPacakge assortment

Sales Sales DistributionDistribution

-20

-15

-10

-5

0

5

10

15

20

25

30

Actual Model

0 12 24

Months

Months

SSAALLEESS

Influence of Four Variables, Taken Influence of Four Variables, Taken TogetherTogether

The MKIS in Fortune 500 The MKIS in Fortune 500 FirmsFirms

Preprocessed information 71% of 1990 firms

Mathematical modeling– Generally down. Reason is unknown.

The MKIS in Fortune 500 The MKIS in Fortune 500 Firms Firms (continued)(continued)

Support for management levels– Models– Overall

Support for management functions Support for the marketing mix

How Managers Use the MKISHow Managers Use the MKIS

IntegratedProduct Place Promotion Price Mix

Vice-pres of marketing X X X X XOther executives X X X X XBrand managers X X X X XSales manager X XAdvertising manager X XManager mktg resrch X X X X XManager of product planning XManager of physical distribution XOther managers X X X X X

Subsystem

Subsystem

SalesSales

MonthsMonths

New PackageNew Package

Model

Actual

A Model Cannot Cope with Unexpected A Model Cannot Cope with Unexpected EventsEvents

75 75

6156

51

40

92

54

77

64

30

14

57

48

41

0

20

40

60

80

100

Retrieving data Storing data Processing data

Perc

en

t o

f co

mp

ute

r u

sers

1980

1990

N.A. N.A. N.A.

Purposes of Computer UsagePurposes of Computer Usage

19801980

19901990

Retrieving DataRetrieving Data Storing DataStoring Data Processing DataProcessing Data

1980 1990

Strategic planninglevel .17

Strategic planninglevel .30

Management control

level.70

Management control

level.54

Operational controllevel .13

Operational controllevel .16

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

Model Use Is Becoming More BalancedModel Use Is Becoming More Balanced

Overall Support from the Marketing Overall Support from the Marketing Information System Is Becoming More Information System Is Becoming More

BalancedBalanced

Strategic planninglevel.25

Management controllevel.57

Operational controllevel .17

Strategic planninglevel.28

Management controllevel.40

Operational Controllevel .31

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

1980 1990

The 1990 Managers Placed More Emphasis The 1990 Managers Placed More Emphasis on Planning and Less on Directing Than on Planning and Less on Directing Than

Did Did Their 1980 CounterpartsTheir 1980 Counterparts

19801980 19901990

Planning .37

Organizing .03

Directing .25

Controlling .34

Planning .51

Organizing .06

Directing .07

Controlling .36

Staffing .01

Note: The percentages are based on the number of respondents ranking the particular Note: The percentages are based on the number of respondents ranking the particular mix functions first.mix functions first.

Marketing Managers Are Using the Computer Marketing Managers Are Using the Computer MoreMore

for Making the Difficult Price and Promotion for Making the Difficult Price and Promotion DecisionsDecisions

19801980 19901990

Product .49

Price .27

Place .16

Promotion .08

Product .32

Price .39

Place .15

Promotion .13