MANAGEMENT INFORMATION SYSTEMS 8/E

Raymond McLeod, Jr. and George Schell

Chapter 17
Marketing Information Systems

17-1
Copyright 2001 Prentice-Hall, Inc.
 Introduction
Marketing was the first functional area to exhibit
an interest in MIS
The marketing information system has three
subsystems; the accounting information system
(AIS), marketing research, and marketing
intelligence
Functional information systems: the conceptual
systems should be "mirror images" of the physical
systems

17-2
 Functional Information Systems Represent
Functional Physical Systems
Functional information systems
Information
Marketing Manufacturing Finance Human resource resource
information information information information information
system system system system system

Marketing Manufacturing Finance Human Information

function function function resources Services
function function

Physical system of the firm

17-3
 Marketing Principles
Marketing mix
Product
Promotion
Place
Price

17-4
The Marketing Information
System (MKIS)
Kotler's marketing nerve center
3 information flows
Internal
Gathered in firm
Intelligence
From environment
Communications
To environment

17-5
 Kotlers Information Flows

Marketing intelligence

Internal Environ-
Firm
marketing ment
information
Marketing communications

17-6
Marketing Information System
(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.

17-7
 An MKIS Model
Output
Product
Place
Promotion
Price
Integrated mix
Database
Input
AIS
Marketing research
Marketing intelligence

17-8
MKIS Model Data Information

Input Output subsystems

subsystems
Product
Accounting D subsystem
information
system A Place
subsystem
Internal sources T

Marketing A Promotion
research subsystem Users
subsystem B

Environmental sources
A Price
subsystem
Marketing S
intelligence
subsystem E Integrated-
mix
subsystem
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Accounting Information System

Sales order data is input.

AIS provides data for
Periodic reports
Special reports
Mathematical models and knowledge-based
models

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Marketing Research Subsystem
Managers use marketing research to gather
information
Gathered from customers and prospects
Purchased or procured from other organizations
Processed using marketing research
subsystem

17-11
 Primary and Secondary Data
Used by marketing research subsystem
Primary data are collected by the firm
Examples of primary data
Survey
In-depth interview
Observation
Controlled experiment

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 Primary and Secondary
Data [cont.]
Secondary data
Mailing lists
Retail sales statistics
Video retrieval systems
Some secondary must be bought and some
is free

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 Marketing Research Software

Graphics packages (print maps)

Makes market research a reality for all
firms
Statistical analysis
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

information about competitors
Not to be confused with industrial
espionage
Each functional information system has an
intelligence responsibility

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 Product Subsystem
Product life cycle supported through:
1) Introduction
2) Growth
3) Maturity
4) Decline
Information answers 3 key questions:
1) Introduce?
2) Change strategy?
3) Delete?

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 The Product Life Cycle and Related Decisions

STAGES
Introduction Growth Maturity Decline

Sales
Volume

Should the Should the

product be Should the product strategy product be
introduced be changed deleted
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 New Product Evaluation Model
Another part of the product subsystem
New product committee
Explicitly considers production as well as
marketing
Lists decision criteria and their weight

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 Place Subsystem
Channel of distribution may be short or long
Material, money, and information flow through
the distribution channel
Resource flows
Feedback
Flows in direction opposite to the material flow
Feedforward information
Flow of information to customer
EDI

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Material, Money, and Information Flow

Money Money Money Money

Manu- Whole-
Supplier Material facturer Material saler Material Retailer Material Consumer

Two-way information flow

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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
B. Customer call reports

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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 Model
Solid arrows: influences
Dashed arrows: responses
Environmental and retailer influence on the
consumer
Individual influences
Combined influences
Unexpected influences

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BRANDAID
Product
Price
Advertising
Promotion
Manufacturer
Manufacturer
Price-off coupons

Premiums
Samplings
Price Package:
Graphics &
Trade promotion Sales function
Salespersons Distribution Assortment
Package assortment
Sales

Availability

Retailer Price Consumer

Retailer Consumer
Promotion
Advertising
Seasonal
Price Product trend
Trade promotion Sales Price
Salespersons Distribution Advertising
Promotion
Package assortment Price-off coupons

Premiums
Sampling
Competitor Package: Environment
Environment
Competitor Graphics &
function
Assortment
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Influence of Four Variables, Taken Together
30

25

S
20

A
15

L
10

E
5

Months
S
0

-5

-10
0 12 24
-15
Months
-20 Actual Model

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A Model Cannot Cope with Unexpected Events
Sales

New Package

Model
Actual

Months 17-27
 The MKIS in Fortune 500 Firms
Preprocessed information 71% of 1990
firms
Mathematical modeling
Generally down
Reason is unknown
Except for production deletion and advertising
media selection
Model use is becoming more balanced

Studies conducted by Li, McLeod, and Rogers

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 The MKIS in Fortune
500 Firms [cont.]
Support for management levels
Models
Overall
Support for management functions
Support for the marketing mix

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P e r c e n t o f c o m p u t e r u s e rs 100
92

80 77
75 75

64
61
60 56 57
54
51
48

40 41
40
30

20 14

.
N.A .
N.A .
N.A
0
Retrieving
Retrieving Data
Retrieving data Storing
Storing Data
data
Storing Data Processingdata
Processing Data
Processing Data 1980
1980
1990

1990

Purposes of Computer Usage

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Model Use Is Becoming More Balanced

Strategic planning Strategic

level .17 planning
level .30

Management Management
control control
level level
.70 .54

Operational control Operational control

level .13 level .16

1980 1990

Note: The percentages are based on the number of respondents

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ranking the particular management levels first.
Overall Support from the Marketing Information
System Is Becoming More Balanced

Strategic planning Strategic planning

level level
.25 .28

Management control Management control

level level
.57 .40

Operational Control
Operational control level .31
level .17

1980 1990
Note: The percentages are based on the number of respondents
ranking the particular management levels first.
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The 1990 Managers Placed More Emphasis on
Planning and Less on Directing Than Did
Their 1980 Counterparts

Planning .37 Planning .51

Organizing .03

Organizing .06
Directing .25 Staffing .01
Directing .07

Controlling .34 Controlling .36

1980 1990
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 Marketing Managers Are Using the Computer More
for Making the Difficult Price and Promotion Decisions

Product .32
Product .49

Price .27 Price .39

Place .16 Place .15

Promotion .08 Promotion .13

1980 1990
Note: The percentages are based on the number of
respondents ranking the particular mix functions first. 17-34
 How Managers Use the MKIS

Subsystem

Integrated
Subsystem
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
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 MKIS Use by Managers

Industry giants are using the computer as a

marketing tool
To learn about consumer needs and wants
To formulate the marketing mix
To follow-up on how well mix is received by
the consumers
MKIS information output used across the
firm

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 Summary

MKIS
Input subsystems
AIS, Marketing Research, Marketing Intelligence
Output subsystems
Product, Place, Promotion, Price, Integrated Mix
Operational MKISs consider management
and marketing concepts
Planning is the key

17-37