Chapter 5

Information Systems have evolved with technology & influx of Big Data DECISION SUPPORT SYSTEM (DSS

• A system that combines data and models for guiding decisions • Key is user interface that allows users to interact with the data • Both standardized & customized reports capabilities

Information Systems have evolved with technology & influx of Big Data MARKETING INFORMATION SYSTEM (MIS)

• Procedures and methods for the regular, planned collection of data • Streamlines analysis, and presentation of information • Aimed for use in making marketing decisions

Best practice is to begin research with a search for existing data

General rule is primary/new data should only be collected only if secondary/existing data doesn't fit the bill "Mounds" of secondary data exist, likely internal and certainly external Avoid the high and unnecessary cost "reinventing the wheel

Concerns with DATA SYSTEMS? "

1) to what degree is an individual's right to privacy being violated in the generation and sharing of these databases? When people register on online merchant sites or apply for store shopping cards, they usually agree to allow the company to collect certain data about them (even if they don't read the fine print). 2)The second concern for us with companies maintaining data about their customers is the ability to safeguard the data from those who would use the information for illegal purposes"

Central use of DSS is also CRM! What is CRM? Customer Relationship Management(CRM)

A systems approach to manage interactions with current and potential customers • Compiles data from the various sources including; website, email, customer contacts, live chat and social media • Analyzes customer data to improve relationships with a focus on customer retention to drivegrowth

Essential to assess the accuracy of secondary data Why is this so important?

Aim to use a primary (originating) source of secondary data Check the sponsor of the Research ‒ Beware of bias in Advocacy Research Quality check ‒ Good sign if details on how research was carried out (design, method, sample, data collection etc.)

Define what is meant by a marketing information system (MIS)? " "

An MIS data system produces regular, standardized reports based on data held in an organization's database(s). The key word in this definition is regular, because the emphasis in an MIS is to produce information on a steady basis. Once an MIS is designed and implemented, managers receive regular reports as they are issued and distributed. The trick, of course, is to identify, in advance, the data that managers will need and to ensure that those data get in the system. An MIS is only as good as its design." "

What is a Model System? "

DSS includes all the computerized routines that allow the user to do the analyses that he or she wants. Whenever managers look at data, they have a preconceived idea of how something works and, therefore, what is interesting and worthwhile in the data. Most managers also want to manipulate data to gain a better understanding of a marketing issue. Routines for manipulating the data can range from summing a set of numbers to conducting a complex statistical analysis to finding an optimization strategy using some kind of nonlinear programming routine. Still, the most common procedures are the simple ones: counting the cases that fall into different groups; summing, averaging, computing ratios; building tables; and so on. Researchers are creating more sophisticated models for manipulating data, often for relatively specific purposes. "

What is a data system? "

DSS includes the processes used to capture and store data coming from marketing, finance, and manufacturing, as well as information coming from any number of external or internal sources. The typical data system has modules containing customer information, general economic and demographic information, competitor information, and industry information, including market trends. The growth in computing power and the emergence of increasingly sophisticated data processing capabilities have led to the development of huge databases within companies. In the past, a business's databases were limited to relatively current information; many new ones contain historical information as well. At this point, companies are capturing any and all data possible, even when they don't know how they may eventually use the data. "

Define the difference between secondary data and primary data. " "

Data that have already been collected, often for some other purpose or by some other organization - Secondary DATA Information collected specifically for the investigation at hand - Primary DATA "

What are the limitations of the Systems Approach? "

Effective MIS or DSS systems are often difficult to implement, for several reasons. -People tend to resist change, and adding an information system can lead to lots of changes. -Also, many decision makers don't want to tell others what factors they use and how they combine them to make decisions; Different managers often pay attention to different things and, thus, have different data needs. -Either the developers have to design with "compromises" that are satisfactory for most users, -but not really best for anyone, or they have to customize the system to meet each manager's needs, one at a time. The costs and time required to build information systems are often underestimated, because managers fail to grasp the size of the task and the changes in organizational structure, key personnel, and electronic data-processing systems that are required. -These information systems are sometimes out of date soon after implementation. -In some cases, the whole process has to start all over again. There is one final problem with the systems approach, and it's a big one: -the system will be ineffective for guiding a current marketing decision. -Managers are constantly learning new things and applying them to their businesses. "

Example to illustrate the difference? "

Maytag conducted an online survey on the demographic characteristics of washing machine purchasers to determine who buys the various sizes and styles of front- and top-loading washing machines, this would be primary data. If, instead, the company used its existing files and compiled the same data from warranty cards its customers had returned (i.e., internal data) or if it used already published industry statistics on appliance, specifically washing machine, buyers (i.e., external data), the information would be considered secondary data." "

List the advantages of working with secondary data. " "

Most significant advantages of secondary data are the time and money they can save. If the information being sought is available as secondary data, the researcher can simply retrieve the data from internal or external sources and proceed to data analysis and/or interpretation. Relative to collecting primary data on the topic, this should take much less time and involve little cost. With secondary data, the original compiler of the information has already paid the expenses incurred in collecting the data. Even if there is a charge for using the data (unlike statistics compiled by government or some trade associations, commercial data are not free), the cost is usually much less than if the firm collected the information itself." "

Various sources of internal data give rise to sophisticated integration

Other sources: Expense Receipts, Customer Records, Financials, Warranty & Registration Note: All of these "secondary" sources were once "new" or primary data

Yet DSS are not replacements for traditional marketing research projects

Output from many of these projects feed into the DSS e.g., marketing dashboard • DSS tend to guide broader strategic decisions but may not address specific issues Missing the HUMAN element/insights

What is a Dialog System? "

Provide managers who are not programmers themselves with the user interface to explore databases by using analytical tools to produce reports that satisfy their own particular information needs. The reports might include tables or figures; individual managers can specify the format. The dialog systems are sometimes menu driven, requiring only a few clicks of a mouse or a tap on a tablet screen. Regardless of how the manager interacts with the system, the point is that managers can do it themselves without relying on others to prepare the particular report that they need. This allows them to target the information they want and not be overwhelmed with irrelevant data. They can ask a question and then, on the basis of the answer, ask a subsequent question, and then another, As the availability of online databases and sophisticated model systems has increased, so too has the need for better dialog systems. Dialog systems put data at the decision maker's fingertips. While that sounds simple enough, it is actually a difficult task because of the large amount of data available, the speed with which they hit a company, and the variety of sources from which they come." "

---Illustrate CRM "

Refers to a system that attempts to gather all relevant information about a company's customers—everything from demographic data to sales data to service records and more. The goal is to better understand customers' needs and behaviors and to put this information in the hands of those who interact with customers. Numerous companies have developed sophisticated software packages for handling the technical side of CRM; in fact, the software has become the focus of CRM for many people. The better understanding, however, is that CRM is a process designed to aid marketers in identifying and solving customer needs." "

List the Disadvantages of working with secondary data. " "

Secondary data are not without potential problems, however. Two problems that commonly arise with secondary data are (1) they do not completely fit the problem and (2) they are not totally accurate. Because secondary data were collected for other purposes, they may not fit the problem as defined. In some cases, the fit will be so poor that the data are completely inappropriate. Usually, poor fit is due to one or more of the following problems: different units of measurement, different class definitions, or the age of the data. Other common problem with secondary data is that it is sometimes difficult (or impossible) to judge their accuracy. As you'll learn throughout this book, there are lots of sources of error possible in the collection, analysis, and presentation of marketing information. When a researcher is collecting primary data, firsthand knowledge helps in gauging the accuracy of the information being collected. But when using secondary data, the task of assessing accuracy is more difficult. It helps to consider the source of the data, the sponsor of the research, and the general quality of the data collection methods and presentation."

How does knowledge management expand the concept of an information system? ----Onto the CIO Perspective?" "

The CIO's major role is to run the company's information and computer systems like a business. The CIO serves as the liaison between the firm's top management and its information systems department. Responsible for planning, coordinating, and controlling the use of the firm's information resources and is much more concerned with the firm's outlook than with the daily activities of the department. CIOs typically know more about the business in general than the managers of the information system departments who are often stronger technically. In many cases, the managers of the information system department report directly to the CIO. "

How does knowledge management expand the concept of an information system? "

The level of sophistication in the design and uses of decision support systems opens up access to so much data that higher-level management of information becomes critical. An executive in charge of information can ensure that it is used in support of strategic thinking. A growing number of companies are extending the idea of information systems management to include management of the knowledge that resides inside its employees' heads. Often referred to as organizational knowledge, one of an organization's greatest assets can be what its people know about customers, its products and processes, and its marketplace. However, few companies yet have a way to make that information widely available to those who can use it. Knowledge management (KM) is an effort to systematically collect organizational knowledge and make it accessible to others. The usefulness of a knowledge management system depends on the willingness of company employees to share information. One means of promoting such sharing of information is to simply make the process as simple as possible. " "

--Do these apply equally to internal and external secondary data? "

The sales and cost data compiled in the normal accounting cycle represent promising internal secondary data for many research problems—such as evaluation of past marketing strategy or assessment of the firm's competitive position in the industry. Transaction data serve as the building blocks for overall company sales performance, often broken down by customer, product, geographic region, salesperson, channel, and so on. " "

What additional kinds of marketing intelligence can Knowledge Management provide? "

Thus, the value of the insights gained from these databases depends directly on the quality of the underlying data, and users need to be able to assess their quality. Provide valuable input for broad strategic decisions, allow managers to stay in tune with what is happening in their external environments, and serve as excellent early warning systems, -they sometimes do not provide enough information about what to do in specific instances, -----when the firm is faced with introducing a new product, -changing distribution channels, -evaluating a promotional campaign, and so on.

--Explain the marketing dashboard "

Which is one way of visually presenting relevant marketing information to a manager. Meant to approximate an automobile's dashboard, a marketing dashboard is designed to provide interactive visualization of a company's key summary measures. The standardization allows for a quick snapshot of current results. Just as important, the data can be rearranged, broken down by various variables, or otherwise "drilled down" in real time by a manager who needs more information. Again, this ability to interact with the system to create customized information is the true value of a decision-support system. System designers start with a detailed analysis of each decision maker who might use the system. They attempt to understand each manager's decision-making responsibilities, capabilities, and style. They identify the types of decisions each decision maker routinely makes, the types of information needed to make those decisions, the types of information the individual receives regularly, and the special studies that are needed periodically. "

Enables businesses to learn more about their consumers and how to best cater to their needs

Enables businesses to learn more about their consumers and how to best cater to their needs Easily accessible to employees that interact with the customers Goal is to strengthen customer retention and build loyalty

---Banking and the Model System? "

For example, DSSs have been developed to enable brand managers to make better marketing-mix decisions for their brands, to help bankers make stronger credit management decisions, to guide managers when they make new product development decisions, to assess alternative marketing plans for motion pictures before they are released, and to match donor livers to the most suitable transplant patients. New uses for modeling data to help make important decisions are being developed every day."

Identify the components of a decision support system. "

Good information systems thus have two key outputs: (a) the standardized, up-to-the-minute reports needed for day-to-day operations and (b) custom reports that can easily be produced by managers when needed. In addition, the information system should incorporate features that make it easy to use in an interactive mode by people who aren't tech savvy."

Decision Support System now the norm

House more than just data Processes used to capture and store data coming from a number of external and internal sources Includes all the algorithms that allow the user to conduct the individualized analyses "Language system," provides a user interface enabling users to interact with the data ("programming functions")

Define what is meant by a decision support system (DSS). " "

includes software that allows managers to more fully employ the available information to assist in making decisions. A DSS system combines data, models for guiding decisions, and a user interface that allows users to interact with the system to produce customized information. Thus, besides storing information and producing standardized reports, the DSS allows managers to access the database and to produce the information they need, when they need it. The DSS includes models for analyzing the data in the system— for example, creating tables or graphs of key data and seeing how a forecast changes when assumptions change"