Marketing Information Systems PDF

Marketing information systems HAYEL ABABNEH – Al al-Bayt University Dr. Hayel Ababneh Dept. of Business Management Al al-Bayt University Dr. Hayel Ababneh MkIS: Subsystems and Components HAYEL ABABNEH – Al al-Bayt University Dept. of Business Management Al al-Bayt University Subsystems of M...

Marketing information systems HAYEL ABABNEH – Al al-Bayt University Dr. Hayel Ababneh Dept. of Business Management Al al-Bayt University Dr. Hayel Ababneh MkIS: Subsystems and Components HAYEL ABABNEH – Al al-Bayt University Dept. of Business Management Al al-Bayt University Subsystems of MkIS • The processing of information is performed by the four subsystems of the marketing information system, which are described below. • 1. Internal reporting subsystem: This subsystem includes all the information that lie within orders, sales, products' cost, products' quality, inventory, cashing, payments, and any other type of reports that circulate within the enterprise. These information are scattered in the various departments of the enterprise. • 2. Marketing information search subsystem: The decision-makers are able to catch on the actions of the competitors or the needs of their consumers and make on time decisions. HAYEL ABABNEH – Al al-Bayt University • 3. Market survey subsystem: They are primarily conducted for analysing the market shares, analysis of sales, study of the market trends, analysis of the characteristics of the market, study of the pricing policy, etc. • 4. Marketing decision analysis and support: This subsystem consists of a statistical models database (descriptive statistics procedures, data analysis models) and of a decision models database (pricing models, consumer behaviour models, product design models, etc). HAYEL ABABNEH – Al al-Bayt University • All the marketing information systems consist of: • 1. The information collection module. The information is acquired from: • External sources (secondary sources, competitors, distribution channels, interesting markets, etc). • Internal sources (existing information, sales time series, cost of products, financial dimensions of the enterprise, etc). • Primary information collected through the conduction of market surveys. HAYEL ABABNEH – Al al-Bayt University • 2. The information processing module: It consists of: • The database management subsystem in which the data is saved. Prior to the storage, data should be codified in order to allow the effective elaboration of the information by the system. • The statistical processing subsystem (descriptive statistics, data analysis methods. • 3. The user-marketing information system interface subsystem, which is used for the presentation to the decision maker of: • General reports on the existing data. • Answers to the questions posted by the decision-maker (what-if). HAYEL ABABNEH – Al al-Bayt University Components of marketing information system • A marketing information system should include the following components: • A system for recording internally generated data and reports • A system for collecting market intelligence on an ongoing basis • Marketing analytics software to help managers with their decision making • A system for recording marketing research information HAYEL ABABNEH – Al al-Bayt University 1. Internally Generated Data and Reports • An organization generates and records a lot of information as part of its daily business operations, including sales and accounting data, and data on inventory levels, back orders, customer returns, and complaints. • Firms are also constantly gathering information related to their Web sites, such as clickstream data. • Clickstream data is data generated about the number of people who visit a Web site and its various pages, how long they dwell there, and what they buy or don’t buy. Companies use clickstream data in all kinds of ways. They use it to monitor the overall traffic of visitors that a site gets, to see which areas of the site people aren’t visiting and explore why, and to automatically offer visitors products and promotions of their browsing patterns. Software can be used to automatically tally the vast amounts of clickstream data gathered from Web sites and generate reports for managers based on that information. • Netflix recently awarded a $1 million prize to a group of scientists to plow through Web data generated by millions of Netflix users so as to improve Netflix’s predictions of what users would like to rent. HAYEL ABABNEH – Al al-Bayt University • Internal reports or records include the data from within the company. Referencing this data can provide you with valuable insights, particularly regarding a company's capabilities, successes and opportunities for improvement. Some examples of data internal reports may include are: • Cash flows • Inventories • Marketing personnel costs • Payables • Product costs • Receivables • Sales records • Stocks HAYEL ABABNEH – Al al-Bayt University • Big companies with multiple products, business units, and databases purchased and installed in different places and at different times often have such vast amounts of information that they can’t post it all on an intranet. Consequently, getting hold of the right information can be hard. • Data mining: A process of extracting the right information from the right places. • Data Warehousing: Combining data into one location that makes analysis easier. • Then the information is captured and displayed t in dashboards: screens on the computer that make the data easily understood so that managers can detect marketing trends. While a dashboard may display a piece of information, such as the number of carloads sold in West Virginia, the manager can click on the number and get more detail. HAYEL ABABNEH – Al al-Bayt University 2. Analytics Software • Increasingly, companies are purchasing analytics software to help them pull and make sense of internally generated information. • Analytics software allows managers who are not computer experts to gather all kinds of different information from a company’s. • The software incorporates regression models, linear programming, and other statistical methods to help managers answer “what if” types of questions. • For example, “If we spend 10 percent more of our advertising on TV ads instead of magazine ads, what effect will it have on sales?” HAYEL ABABNEH – Al al-Bayt University • The company uses the analytics software to help analyze sales transactions, market research, and demographic data associated with its large database of customers. • It combines the information with Web browsing data to gain a better understanding of the individual customers marketing channel preferences as well as other marketing decisions. • It helps employees understand these relationships and make high-impact datadriven marketing decisions. HAYEL ABABNEH – Al al-Bayt University 3. Marketing intelligence  Marketing intelligence refers to the data or information from external sources, such as industry associations or trade journals.  It includes data related to the general marketing environment outside of the organization and the specific data within the market. Leveraging this information helps the company better understand their specific marketing and competitors within the market.  Some examples of what marketing intelligence may include are: Changes in customer preferences and tastes Competitors' pricing strategies Competitors' promotion strategies Marketing trends New products in the market HAYEL ABABNEH – Al al-Bayt University • A good internal reporting system can tell a manager what happened inside his firm. But what about what’s going on outside the firm? • What is the business environment like? • Are credit-lending terms loose or tight, and how will they affect what you and your customers are able to buy or not buy? • How will rising fuel prices and alternate energy sources affect your firm and your products? • Do changes such as these present business obstacles or opportunities? Moreover, what are your competitors up to? HAYEL ABABNEH – Al al-Bayt University 3. Market Intelligence • Not gathering market intelligence leaves a company vulnerable. • when fuel prices hit an all-time high in 2008, unlike other passenger airline companies, Southwest Airlines was prepared. Southwest had anticipated the problem, and early on locked in contracts to buy fuel for its planes at much lower prices. Other airlines weren’t as prepared and lost money because their fuel expenses skyrocketed. • Collecting market intelligence can also help a company generate ideas or product concepts that can then be tested by conducting market research. • Gathering market intelligence involves a number of activities, including scanning newspapers, trade magazines, and economic data produced by the government to find out about trends and what the competition is doing. • Some companies subscribe to news service companies that regularly provide them with this information. LexisNexis is one such company. It provides companies with news about business and legal developments that could affect their operations. HAYEL ABABNEH – Al al-Bayt University 4. Marketing Research • Marketing research includes project-based research aiming to answer specific marketing questions. It may include internal and external data and often uses a variety of statistical tools. Processing marketing research includes collecting, organizing, analyzing and interpreting the data. Some examples of what marketing research may pertain to include: • • • • Changes in the marketing environment Competitor strategies Customer preference or taste changes New product launches HAYEL ABABNEH – Al al-Bayt University Search Engines and Corporate Web Sites • An obvious way to gain market intelligence is by examining your competitors’ Web sites as well as doing basic searches with search engines like Google. • If you want to find out what the press is writing about your company, your competitors, or any other topic you’re interested in, you can sign up to receive free alerts via e-mail by going to Google Alerts. • Suppose you want to monitor what people are saying about you or your company on blogs, the comment areas of Web sites, and social networks such as Facebook and Twitter. You can do so by going to a site like WhosTalkin.com, typing a topic or company name into the search bar. • All the good (and bad) things people have remarked about the company or topic turn up. What a great way to seek out the shortcomings of your competitors. It’s also a good way to spot talent. • Radian6 (a similar company) also provide companies with sentiment analysis. • Sentiment analysis is a method of examining content in blogs, tweets, and other online media (other than news media) such as Facebook posts to determine what people are thinking at any given time. • Some companies use sentiment analysis to determine how the market is reacting to a new product. HAYEL ABABNEH – Al al-Bayt University Thank you HAYEL ABABNEH – Al al-Bayt University Dr. Hayel Ababneh Marketing information systems HAYEL ABABNEH – Al al-Bayt University Dr. Hayel Ababneh Dept. of Business Management Al al-Bayt University Marketing intelligence Dr. Hayel Ababneh Dept. of Business Management Al al-Bayt University HAYEL ABABNEH – Al al-Bayt University Introduction • Marketing intelligence element of the MkIS is concerned with data relating to the firm's market environment and competitors. • The distinction is that intelligence is concerned with the environment. • Intelligence relies on a constant scanning or monitoring rather than the intensive, one-off survey or market test. HAYEL ABABNEH – Al al-Bayt University Definitions • Marketing intelligence system: the way in which company executives are kept current and informed about changing conditions in the macro-environment and task environment‘. • It is the evaluation of information and piecing it together to form an over-all picture of enemy potentialities and probable intentions. HAYEL ABABNEH – Al al-Bayt University Environmental Scanning • Environmental Scanning: Searching for and receiving information from an environment with economic, political, societal and international dimensions, as the foundation for marketing strategy and organisation. • The prime importance of such environmental information has been identified as: • (a) providing the basis for a company to adapt to other systems in the environment; • (b) maintaining viability by exchanging information and materials through the organisation's boundaries; • (c) providing an activator of innovation which leads to strategic effort and sustains growth and survival. • A prime role of management is to extract information about opportunities and threats from the environment, to improve the firm's competitive position, through a variety of media and a variety of organisational arrangements. HAYEL ABABNEH – Al al-Bayt University Environmental Scanning • Environmental scanning: is the process that seeks information about events and relationships in the company's outside environment, the knowledge of which assists top management in its charting of the outside forces, events and relationships as they affect or potentially affect the future of an organization. • For example, Table below illustrates the scanning methods and areas adopted by Levi Strauss, the clothing firm, in the US. HAYEL ABABNEH – Al al-Bayt University Environmental Factors Scanning Interpretation Social, e.g. population changes, leisure time and recreation, fashion trends, preferences for natural fabrics E.g. changing age distribution in US market – monitoring trends in birthrate and population discovers that teenager market segment in the US is Shrinking Shrinking market potential in largest market Segment Economic, e.g. economic growth and inflation, imports to the US, clothing spending, retail changes E.g. imports of jeans to the US – monitoring growth in Far East production and quota agreements suggests import growth in US Imports will probably gain a higher share of US market for Levi Strauss products Governmental, e.g. import barriers, retail price maintenance, metrication, flameproofing standards in clothes E.g. monitoring US government consumer protection bodies finds reduced budgets and less attention to flammability research, suggesting less chance of new standards for general clothing Slowed rate of this environmental force HAYEL ABABNEH – Al al-Bayt University Environmental Scanning • A number of dimensions to the marketing environment: economic, political, societal and international. On the other hand, Cravens et al (1980) point to technological monitoring, social monitoring, and economic monitoring. This segmented view of the marketing environment is organised by Kotler (1976) into the - the economy, technology, legal and cultural factors - and the micro- or task environment - buyers, channels of distribution, competition and supplies. • Gillette in the US, where the intensive monitoring and scanning of population growth rates and changing age distributions suggested declining growth rates for Gillette products and the need to enter other markets - the service sector and cosmetics, for example - through product development and company acquisition. HAYEL ABABNEH – Al al-Bayt University HAYEL ABABNEH – Al al-Bayt University Scanning Modes • Scanning modes include: • (a) undirected viewing, defined as general exposure to information with no specific purpose in mind, except possibly exploration; • (b) conditioned viewing, defined as directed exposure to an area of type of information, though not involving active search; • (c) informal search, defined as a relatively limited and unstructured effort to obtain specific information or information for a specific purpose; • (d) formal search involving a deliberate effort to secure specific information or information relating to a specific issue; and possibly • (e) scanning for feedback, that is looking at the effects of some company policy, or activity to judge performance and progress, although this is perhaps a type of formal search. HAYEL ABABNEH – Al al-Bayt University Types of Scanning • Another view of scanning distinguishes between: Irregular scanning, involving ad hoc studies of specific short-run events, often in a crisis; Regular scanning, with periodic studies of selected issues, for managerial consideration, in the medium-term, which are proactive rather than reactive to crises; and Continuous scanning, with a structured system to collect data on a broad range of environmental factors, for long-term planning. HAYEL ABABNEH – Al al-Bayt University Intelligence Sources • There will be many sources of intelligence: salesmen, distributors, dealers, advertising agencies, marketing research agency reports and publications, trade and mass press clippings, competitors' literature and price lists, conferences and seminars, advertising by competitors, and so on. • They vary in importance between different situations, then there may be immediate gains simply by employing a marketing intelligence analyst. HAYEL ABABNEH – Al al-Bayt University Limitations of Intelligence Systems • Much intelligence was not transmitted and much was distorted. The problem seemed to be traceable to two factors: interaction patterns between potential information receivers and transmitters, and the organization structure. • Interaction patterns affected information flows in three ways: 1. decision makers did not know what information was available because they lacked search skills and were not informed by others (and often did not know what information they needed); 2. individuals with information did not pass it on for personal reasons, or because they did not know who needed the information; and 3. distortion occurred as information was transmitted. HAYEL ABABNEH – Al al-Bayt University Thank you HAYEL ABABNEH – Al al-Bayt University Dr. Hayel Ababneh