Marketing Information Systems Applications & Theory

ABSTRACT
This study provides an overview of the marketing information systems that exist in most of the organizations. It outlines what actually marketing systems are, what is the purpose behind having an information system in an organization, what type of marketing information system must exist in an organization, why organizations need marketing in formation systems, what type of general purpose softwares can be used to enhance the effectiveness of marketing information system and what types of costs are associated with using the information systems in an organization. This study will be a valuable contribution to the future study contributions in this field.

CHAPTER 1 INTRODUCTION
The latest blend of internet resources and traditional business activities has a major impact on all industrial sectors in business and the basic theme of business evolution has changed dramatically. All the businesses are required to change their basic infrastructures and strategically change the way they work and respond to their customer needs. Information systems and technologies have become a vital component of successful businesses. Information technology has become a basic tool for using technology in a meaningful and effective way. Majority of organizations have been transformed into brick and click companies hence, serving their customers from all fronts. So, top management and executives must learn how to apply information systems and technologies to their business situations. There are three fundamental reasons for which businesses need information systems (Schultheis & Sumner, 1995): 1. To support their business processes and operations 2. To support decision making process 3. To support its strategies for competitive advantages A Marketing Information System (MIS) has traditionally been proposed to provide marketing managers a thorough process of intelligence gathering. Since this information remains continuous, the manager is able to analyze, evaluate, sort and distribute important, accurate and timely data required to make effective decisions for organization to get more profit. Due to the interactive nature of this information, the marketing manager is capable of better planning, control and implementation of marketing efforts (Kotler, 1988). The information provided by Marketing IS helps managers in planning and managing customer loyalty, acquisition and retention programs. Moreover Marketing IS provides information about customer profiles, suggesting which ones are more profitable for the organisation. Marketing IS particularly becomes of importance in the area of Internet marketing. Companies continue to improve their websites, as they rely more and more on electronic

the power of buyers. Overall. Problem Specifications Making the best out of the Marketing IS can make effective and efficient decision making for organisation. Nowadays available Marketing IS can intuitively understand the business requirements and can adapt to the changing trade scenarios and markets. Marketing IS has become especially important to better performance of companies. an effective Marketing IS largely contributes to sustained business growth and provides organizations opportunities to get greater profit margins. A good Marketing IS helps create a competitive advantage. This model looks at five key areas namely the threat of entry. sales and customer service activities. More than ever in the Internet age. the power of suppliers and competitive rivalry. Strategic managers can use this model to understand the industry context in which the firm operates. It also aims to come up with recommendations as to how companies should deal with factors affecting Marketing IS. The five forces model helps the marketer to contrast a competitive environment. Research Question The questions that the proposed research wishes to answer are: How do organizations make the best out of their Marketing IS? What are the factors that affect the implementation of Marketing IS? How should Marketing IS be implemented effectively? Aim The aim of the proposed research is to provide deeper understanding about the nature of Marketing IS. the threat of substitutes. One of the most widely used tools supporting Marketing IS Porter’s (1980) framework that models an industry as being influenced by five forces. tested and deployed more than the capabilities of the personnel at hand.interactions with their customers to facilitate their marketing. it can even substitute for expensive assets. How organizations handle their Marketing IS largely depends on the capabilities of the chosen Marketing IS that the company has bought. .

sell and supply satisfaction through . Enterprise collaboration system 7. anticipating and satisfying customer requirements profitably (marketing glossary. Work flow management system 6. TYPES OF INFORMATION SYSTEM Following are some of the types of information systems used for better performance in business operations. which provides businesses with the basic purpose of their existence in the market place. Transformation processing system 2. According to these needs and wants the process of satisfying these needs and wants starts. (2) To examine how Marketing IS is utilized in Internet marketing. Process control system (PCS) 4. they have to share information with each other. Human resource information system 8. In efforts to satisfy the customer needs businesses promote. (1) To examine the nature of Internet marketing or e-marketing. WHAT MARKETING IS? "The management process responsible for identifying. 1. 2007) The basic process of marketing starts in the market place when the needs and wants of the customers are identified by businesses in the market place. (3) To examine the difficulties faced by companies in implementing Marketing IS. Decision support system (DSS) 5. executive information system These information systems can not exist in isolation. Marketing information system 3. These systems must be differentiated from each other because the use and objective of these systems are different and they need to groom differently. Management information system 9.Objectives This research will work on the following objectives.

INFORMATION SYSTEM "A system. store. Its four major components are: 1. and/or methods organized to collect. 2007) An information system is a system of interconnected computers or some other related equipment which is used in "acquisition. present and future operations on an on-going basis in order to provide support for management's marketing decisions. management. MARKETING INFORMATION SYSTEM "An organizational section or entity whose purpose is to gather. disseminate. planning for product. transmission. manipulation. whether automated or manual. 2007) “An integrated system of man and machine for providing the information to support the operations. This information system includes hardware. promotion and sales of the products and finally the distribution of the products.their products and services. transmit. “A system which provides information support for decision making in the organization” (Jawadekar. and disseminate data that represent user information” (Telecom glossary 2k. organize. store and retrieve information for use in marketing decisions. 2007)" Marketing information system is ongoing. Internal marketing information repository . movement. that comprises people. Foremost functions of marketing are the collection of marketing information and research. software and firmware. the management and the decision making function in the organization” (Jawadekar. display. (Marketing glossary. interchange. 2001). analyze. machines. retrieve and analyze data relevant to a firm's past. organized procedures to generate. advertising. process. storage. control. or reception of voice and/or data". switching.

However. improving customer services. marketing is a key function in a business environment.quote text box collection analyses storage retrieval & Dissemination of data Figure 1: (Schultheis & Sumner. Organization which are concerned about developing and maintaining competitive advantage understand that information systems can be an important tool in achieving that advantage by decreasing costs. Despite the importance of this function in business marketing decision making is often considered beyond the help of any information system. Nowadays companies are spending huge amounts of money on use and deployment of different systems and tools through which gaps between companies and its customers can be reduced. requests from marketing managers are sent to the MKTIS for real time marketing department and MKTIS provides processed. External Marketing intelligence repository 3. Ad hoc research repository for non recurring problems An ideal marketing information system of a company includes. refined and customized data to provide information updates. 1.2. Integrates old and new data to provide information updates and identify trends Requests for information Marketing Manager Regular & customized reports MKTIS systems & procedure [. Statistical techniques and mathematical models 4. This can be done through use of efficient and smart systems. The business function of marketing is concerned with planning. So. improving sales personnel . Generates regular reports and recurring studies as needed 3. this attitude is changing nowadays. Includes real time data 2. 1995). Analyzes the data using statistical analysis and mathematical models that represent the real world 4. promotion and sales of existing products in existing markets and development of the new products for new markets to better server present and potential customers.

and Provision of after sale customer support. firms were able to collect.designed Marketing Intelligence – information flowing from external environment into the internal environment Internal Information – gathered within the firm Marketing Communication – Information flowing from firm to external environment An MKIS help in proper management and dissemination of all three kinds of .productivity. following types of information should be . Time-sharing systems allowed multiple jobs to run at once. which meant that only one program or "job" could be processed at one time on priority basis. Types of Marketing Information Every information system is designed to capture some sort of information. and manipulate larger amounts of data to aid marketing decision makers. The earlier data processing systems only operated in the sequential. Out of his capability developed the marketing information system. decreasing risk in product planning and forecasting more accurate sales forecasts. Information requirements need to be defined before the systems are made. Management information systems came into trend in the 1970s (McCann. store. Development of those products and services to meet customers’ needs Promotion of the products and services.information EVOLUTION OF MARKETING INFORMATION SYSTEM As computers became common in 1960’s. 2007). thus permitting many people to use the same computer at the same time enabling them to place marketing data in a file or . MKIS is a type of Information System that helps the firm to achieve following :objectives Identification of customers for firm‘s products and services. batch mode. While designing marketing information system.

They use their computing skills to convert data into information.database and to then allow different users to gain access to the data in the same time frame. Ease of use was dramatically improved from earlier systems. and/or presentations. Most brand groups could and would utilize these systems to produce standard reports as needed. 2007). Thus we can view the manager's job as both generating insights from information. These systems tended to allow the managers to produce and print a limited number of standard reports. A traditional Information system involving Human conceptual and cognitive skills These reports are communicated to others via memos. use their cognitive skills to convert . reports. It is common for firms to identify more than 100 report types that they can generate as needed (McCann. and provide a large degree of freedom in the types of reports that can be generated. 2007). 2007. Figure2: John M. By the early 1990s. Such information systems opened a new door for marketing managers because it allowed them to get the information when they needed it in the form that they needed. A brand manager could work at a computer terminal and request a brand report. almost all consumer packaged goods firms have acquired and made use of these systems. at the same time that a sales planning analyst was using another terminal to produce an account review report (McCann. and to do periodic ad hoc analyses. The latter part of the 1980s saw an evolution in the power and ease of use of management information systems. The evolution of marketing systems. McCann. 2007). Such systems were the dominant ones in use by marketing managers in the mid-1980s (McCann. These systems allow marketing managers to start using the system after a short training period. letters. and then sharing these insights via communications.

analyzes the rows and columns of numbers.the information into insights. and in some instances the data were actually scarce. and then use their diplomatic skills to persuade others. advanced stages lead to analysis paralysis. and they have found that this approach runs into a major barrier: the size of the databases and the inherent limitations of managers using information systems to generate insights from rows and columns of information. . "cancer of the information system. and sends the results to the manager (McCann. However. The human motor skills and information processing mechanisms cannot keep up with any where near the 10 million new numbers that can arrive every Monday morning. "more information than the organization can process is a form of pollution. As the of scare data are over but this situation has caused one manager of marketing data and systems to coin the phrase “information ecology”.” These organizations were using the traditional IS model to marketing and sales data. A knowledge-based system is used to capture the manager's and analyst's expertise and then let the knowledge-based system interact with the information system. A knowledge-based system replaces the human in the use of the information system to generate insights. This worked because the data were not voluminous. 2007). use their composition and persuasion skills to produce an effective communication. The IS approach worked because it reduced the stacks of printouts and provided managers with a tool they could use to extract the information to accomplish their tasks. the days of scarce data are over for many sales and marketing organizations. It runs the reports. Individuals simply cannot devote the necessary time to generating all of the insights that are buried in the data. To solve this problem knowledge based systems were being invented." Upon this characterization of the situation another marketing information term was being invented yet another descriptive phrase: “infocarcinoma”. it is possible to have too much information. along with simple graphs.

or sales presentations. 2007.Figure 3: John M. McCann. it absorbs rows and columns numbers from the MIS and uses them to produce documents such as memos. reports. The evolution of marketing systems. A knowledge based system eliminating human element The knowledge-based system substitutes for the marketing manager. . The goal of the knowledge-based system is the generation of insights from the information which is produced by the information system from the data stored in the database management system.

CHAPTER 2 COMPONENTS OF MARKETING INFORMATION SYSTEMS Managerial decision making and planning comprises three basic levels in continuum of complexity (Schultheis & Sumner. 1995). Strategic planning Tactical planning Operational planning Decisions become more and more complex as they move towards the top in the continuum i-e towards strategic planning at the top managerial levels. 3. Strategic Planning C M O Tactical Planning Operational Planning P L E X I T Y Figure 4: stages of planning and decision making . The information used at the operational level is used at the tactical level and tactical level information is used at strategic planning level to aid the decision making processes. 2. 1.

derived from internal sources. The information systems support these sales activities for sales person. OPERATIONAL MKTIS (Schultheis & Sumner. 1995) Marketing information systems at the operational levels resemble the financial operating systems which produce regular. . The information produced by this part of MKTIS is comprehensive. recurring. their products or service preferences.1. • Telemarketing systems It allows sales people to initiate contacts. precise. • Direct mail advertising system Through direct mailing services sales documents can be easily distributed to the customers. The major activities of the sales are identification of the potential customers. highly ordered. This operational MKTIS is further divided into different categories which are explained as under: 1. eloquent. These systems not only record the information about the mailings to the customers but also record the responses of the customers. The supporting information systems for sales information systems are: • Contact IS It provides information about the customer contacts. by product or by any other classification as per sales person. • Prospect IS This system can include the list of prospect / future probable customers by location. offer products and services or follow up on sales. This information is used to calculate the future sales probabilities. making contacts with the customers. anticipated and purposeful data which describe the past marketing activities.1 Sales information system Sales are the bread and butter of the business. history of the sales calls made and information of visits by the customer. closing sales and follow up on sales. by gross revenue.

The speed of delivery of products and services is important for a business. Kiosks are small. Regardless of the type of distribution channel the delivery of the products and services must be monitored properly by the business. date.3 Supporting operational accounting systems level financial The operational level financial information systems provide information about the financial aspects which support the operational activities of the business. It is evident that technology is making the lives of the people changed dramatically. salesperson. This is important to identify and correct any bottle necks in the system or service. •Sales order processing systems Sales order processing system or order entry system provides information about orders sorted by time period.2 Distribution information systems Any manufacturing business can have either public or private distribution channel for the distribution of its products and services. type of inquiry is stored to help marketing managers analyze customer requests to identify opportunities for new products for new products. 1. They contain a multimedia computer microcomputer system with a touch screen.• Inquiry information systems This information system provides details about the customer inquiries about existing or potential products. • Computer kiosks Computer kiosks are a form of electronic marketing systems. . Some businesses provide on-line catalogues from which customers can select different products using a touch screen and purchase them with accredit card. round or octagonal structures on sidewalk or other public places in Europe where news and advertisements can be placed. product and territory. Information about the time. 1. improvements in existing products. and new improved customer support services.

stock receipts. includes both external and internal information. 1995) Tactical marketing information systems are different from operational marketing information systems. expected as well as unexpected outputs. • Inventory information system This information system provides information about inventory levels. The information and data provided by these systems is also very useful in making strategic and tactical level decisions. This information is ordinarily integrated with the order entry system of the financial information system. Tactical marketing information systems produce detailed reports. 2. POS are found in fast food chain stores. and the location and distribution of stock within the organization. Information provided by POS can help build customer databases and shifting the focus from who is purchasing to what is being purchased. This type of information can help salespeople to locate the low supply of products to its customers and can offer a different or same product to the customer. provides summary reports instead of detailed information. • Credit information systems This information system provides the sales person with the information of how much credit can be granted to a customer. . which ultimately provide information to the marketing information system. This POS provide input to the financial information systems. and produce subjective as well as subjective data. department stores and grocery chain stores. stock-out conditions. stock issues. descriptive as well as comprehensive information. stock damage. TACTICAL MARKETING INFORMATION SYSTEM (Schultheis & Sumner.•Point of sale systems Point of sale systems are another form of sales order processing systems. Tactical decisions are made mostly by the managers when they prepare and plan marketing plans through which they hope to reach the top management's sales and profit goals. Data produced by operational marketing information system is used by tactical information system.

weekly or monthly basis. trends. customers. On the basis of this information tactical decisions are changed over a period of time. They can view the amount of money spent in the department on the salespeople versus support staff in the organization or to the industry as a whole. For these decisions information about sales territories. On the basis of these reports they can calculate the sales averages and can forecast the next quarter or yearly sales. Information about these campaigns can be received by the manager on daily. In addition sales managers need information to control current sales campaigns. Managers can compare and contrast sales.2. Marketing information systems do not make the decisions for marketing managers. These systems produce reports analyzing sales activities that help managers make decisions about sales people. products. products and the services offered in a particular area. products and customers. and probabilities but also considerable knowledge of the current environment. To achieve these business and marketing goals sales managers must make tactical decisions. pay and reward system of the sales people and which market segments to serve is needed. For tactical decision the information needed is provided by these sales management information systems. . They can estimate annual sales budgets given a set of goals from top management.1 Sales management information systems The major objective of the sales managers is to reach the targets that have been set by the top management. sales force allocation. territories. Similarly the rewards can be designated to the sales people according to the ratio of sales made and territories can be designed or re-designed on the basis of effectiveness of the sales campaigns. customers served. they provide information to support those managers in the decision making process. and territory information from one department against external benchmarks of success. The marketing manager must bring to the table not only historical data.

Usually a marketing manager suggests a price that can cover the production costs easily. a marketing manager must know the demand for the similar or alternative types of . The decisions about the use of marketing tactics need input of information like market segment history. and affects the sales volume and profitability of the organization. so that timely corrections can be made in case of any bottlenecks in the system.2 Advertising and promotion information systems Advertising and promotional tactics are also being developed by the marketing managers so as to implement strategic sales goals set by top management. 2. So. the results of the previous advertising and promotional efforts and sales history by market segment. They can close the gaps between actual and projected sales. Determination of the price of a product is a critical process. Advertising and promotion information systems provide help managers in these tasks.3 Product pricing information system Product pricing information systems provide information to managers that helps them set prices for their products and services provided. If marketing department receives these reports at the right time than they can timely identify which products need attention and which ones need to be pushed or pulled from the market for effectiveness. The reports based on the order entry system provide inputs for this information system.2. These reports can be used to decide which area of products and services needs help and requires more advertising and promotions. For the purpose to market the products and services they have to decide which advertising media and promotional devices to use. what type of market must be targeted and what mix of products & services would be suitable. These information systems are important because the price of a product and service is a crucial factor associated. The data input from order entry system provides managers with the information about effectiveness of any advertising and promotional campaigns. The external factors that act in this regard are the competitor's prices for similar products and services in the market.

The cost of products can be cost-plus pricing. the desired profit margin. . volume of the products produced. higher the prices that can be charged from the customers (Schultheis & Sumner. These systems then use arithmetic algorithms that help to represent the interrelationships of these factors. costs of labor. 1995). which includes adding a markup to the cost to provide desired profits. which includes pricing the products on the basis of customer's perceived value of the product. expected consumer pricing index. For the products which are innovative and have no direct or indirect competitors or alternatives in the market can be priced above their costs and above their usual markups. Such type of pricing strategy is known as penetration pricing (Schultheis & Sumner. Prices can also depend on the objectives of the other organizations. For pricing of the products and services some companies provide their managers which specific pricing models through which they can price their products and services by entering relevant statistics and data. These pricing decisions also include what type of discounts can be allowed to different types of customers. The type of data required can include expected competitive prices. cost of raw material and value of expected advertising expenditures. they can charge higher prices for the same products and services provided earlier. 1995). A company can decide to lower its prices as compared to its competitors for the same product and penetrate in the market more aggressively. and the costs of the production and prices of the competing products. The organization presenting the product may wish to earn maximum profit from the product before any other competitor presents same or any alternative product. This type of pricing strategy is called market-skimming pricing (Schultheis & Sumner. what promotional activities can be used such as financing options and rebates. Once the company has developed its customer base and has built up customer loyalty. Greater is the perceived value. expected consumer disposable income. It can be demand-pricing. 1995).products.

Forecast of the sales for the industry as a whole. . demographic trends. 3. reliability of various channels in distributing different products and services. for organization. STRATEGIC MARKETING INFORMATION SYSTEM (Schultheis & Sumner. and market segment saturation provided by the channels. Strategic decisions may include segmenting the market into target groups of potential customers based on common characteristics or needs and wants or selecting those market segments which organization wishes to reach. directly or indirectly to customers and what channel to adopt for the delivery and distribution of the products and services of the organization. They have to decide whether they wish to sell al or part of their products.4 Distribution channel decision support system Another important tactical decision is how to market the products and services of the organization. To support the marketing manager in these decisions marketing information system must provide a distribution channel decision support system. The results of these sales forecasts are further divided into different categories by sales territory and sales division. 3. planning products and services to meet those needs. governmental actions. and forecasting sales for the market segments and products. It should also track the demand and inventory at all levels of the distribution channels so the manager must anticipate the excess or shortfall of the inventory levels. They may be based on assumptions about the activities of the competition. This system must provide information about the cots of using different distribution channels. for each product and service and forecasts for the new products and services is produced by sales forecasting information system. Forecasting is not only just mere projection of past trends.1 Sales forecasting information systems Sales forecasting information systems usually include several varieties of forecasted reports. and a variety of other pertinent factors which can even include weather. 1995) To develop an overall marketing plan an organization may engage in variety of strategic and tactical decisions.2. shifting customer demand.

3. TACTICAL AND STRATEGIC INFORMATION SYSTEM (Schultheis & Sumner.2 Product planning and development information systems Product planning and development information system provide information about consumer preferences obtained from the marketing research system and the customer inquiry system available for the development of the products. It is even more difficult for the new products and services for which no previous data is present.Development of the sales forecasting reports is an important aspect for a business. Errors in the sales forecasting reports can affect nearly all facets of business functions. consumer product safety concerns.1 system Marketing research information In larger organizations conduct market research. In a manufacturing organization these specifications would be given to the engineering department which will design and produce a product to meet those specifications. Attempting to predict the future is a very difficult task. 1995) There are two important information systems that provide support both tactical and strategic information system and they are marketing research information system and competitive tracking information system. The product development system must provide appropriate organizational personnel with sufficient information to ensure that they accurately and completely address patent and copyright concerns. The primary output of planning and development activities is a set of product specifications. Sales are projected on the basis of knowledge about the fate of similar kinds of products in the market. 4. market research is completed by consultants hired from outside the company. and a host of legal issues pertaining to the new product. When new product specifications are developed it is necessary to carry out all the legal concerns. The results of . Those forecasting reports provide an important input for the tactical decisions. 4. In smaller companies.

including testing products and services. economic data. advertising and promotional information. personal and telephone interviews. This data can be obtained by direct mail customer surveys. potential customers. This information gathering task is performed by competitive tracking information system. census and demographic data. • Analyzing and identifying consumer preferences. sales. searches of external databases and reports filed by sales personnel. social trend data. products. • Conducting trend analysis of industry sales of products and services and comparison with the company data to identify products and services that are on ascent or descent. The competitor information includes information about competitor prices. The typical activities performed by a marketing research information system are. library searches of governmental and industry reports. environmental data and scientific and technological data. • Determining and analyzing consumer satisfaction with the organization’s existing products or services • Estimating market share for all or each product or service offered.this market research provide input to the tactical and strategic decision making. This results in an organization which is far ahead of others in fulfilling the needs and wants of their customers in particular market segments. 4. Inputs to the market research are based on the information about customers.2 Competitive tracking information system To be competitive in the market with the right marketing mix the organization must keep itself abreast of the information of major competitors and their marketing activities. . This information must be gathered if the organization wants to be ahead of its competitors and wants to avoid lagging behind in the eyes of its competitors. • Analyzing population and target group characteristics. especially for trends in data that could affect the organization. industry or trade data.

efficient and accurate. This information helps to make changes in the marketing strategy according to the market trends. have simply made the process more manageable. Typically these data are organized. Information about competitor may also be gathered by paying visits on the competitor outlets and meeting with their sales people or by conducting online searches over the internet. The above mentioned two information systems provide useful information for tactical and strategic marketing information system which later on helps in the decision making process by having an insight into the internal and external marketing activities of the organizations. the managers of a retail supermarket chain might want to know which items are purchased most frequently in each of its stores. DATABASES. stored and updated in a computer. Research probe databases with specific questions to uncover useful relationships and developments. Databases are not new.Information about competitors is easily available in journals. newspapers and in other published materials. new competitor schemes about the products and services or about any new activity in the competitor circle. competitors or industry trends. The resulting tallies can be used to customize each store’s layout and improve customer convenience. By having the computer sort through the electronic records of all completed transactions. market segments. For example. MINING DATA WAREHOUSES. with their speed and capacity. for example __ is called a data base. These publications provide information about the new products which are under development. prices of the products. Computers. For years managers have been monitoring their customers and the environment. AND DATA A marketing information system uses data from variety of sources both within the organization and from outside suppliers. this information can be compiled quickly. The assembled data pertinent to particular topic __ customers. .

Acknowledging that they are more than simply a “base” of data. data can come from the sales force. searching for predetermined patterns in the data. . compiled by a firm that is conducting transactions with millions of customers. marketing. the bank can design individually tailored programs. Some believe that through the management of data. called transactional segmentation. address their customers’ needs more specifically. a bank can often anticipate needs. Data warehouses can be analyzed in the same way as databases. By comparing an individual customer’s transaction patterns to a database of all customers’ transactions. because of their size it would be a slow and cumbersome process.Analyzing databases has enabled marketers to better understand marketplace behavior and. marketers will eventually reach the ultimate level of personalized marketing __ targeting individuals. These techniques have a capability to identify patterns and meaningful relationships in masses of data that would be overlooked or unrecognizable to researchers. these collections are called data warehouses. information is available from hundreds of research suppliers. manufacturing and accounting. Some organizations move beyond databases to create large and complex repositories. is being used by some banks to retain customers. Internally. However. more advanced statistical and artificial intelligence techniques are now being applied to data warehouses. Externally. These techniques are called Data Mining. A move in that direction. With the information in hand. as a result. Some sources provide a continuous flow __ as when all transaction data for a retailer are fed into the system __ whereas others are occasional or periodic providers’ __ as when new demographic information on the population is released by the government. A data warehouse is an enormous collection of data. Fortunately. from a variety of internal and external sources. Major data sources The data used by researchers and managers in databases and data warehouses are gathered from many sources.

Participants in the stores’ frequent shopper programs are given special discounts if they permit the cashier to run their membership card through a reader when they check out. has created a database to provide this information. Many retailers have taken scanning to a next step by adding the customer’s identity to the record of their purchases in what are called frequent shopper programs. The store is then able to relate product choices to household characteristics and adjust the product assortment and store layout to make it more appealing. However. coupon usage. Linking household information to product purchases is even more valuable if you know what advertising the purchasers have been exposed to and the coupons they have used. Inc. a marketing research firm. the scanner eliminated the need for clerks to memorize prices and reduced mistakes from hitting the wrong cash register key. retailers quickly discovered scanners could also produce information on purchases that could be used to improve decisions about how much of a product to keep in inventory and the appropriate amount of shelf space to allocate to each product. and product purchases.Probably the most important data sources for databases are retail scanners. Information resource. The output is called single-source . (IRI). This allows the store to combine data stored on the card about house hold demographics and life-style with the shopper’s scanned purchases. The firm maintains a sample of cooperating households for which it: • • • • Maintains an extensive demographic profile Monitors television viewing electronically Tracks the use of coupons Records grocery purchases The result is that household demographics can be correlated to television advertising exposure. By matching an item’s unique code with price information stored in a computer. the electronic devices at retail checkouts that tread the bar code on each item purchased. Scanners were originally intended to speed up check out and reduce errors in supermarkets.

.data because all the information can be traced to individual households. providing a single source for the data.

activities such as market research. penetrating into new markets. Retaining market share. product designing and launching are some of the key responsibilities of marketing management. 2007): . The function has a very strong interface with the production and finance department. and marketing has a responsibility to obtain the orders from customers and fulfill them. advertising. consumer survey. Forecasting of sales. The major responsibility of the function then remains to evolve competitive strategies in all the branches of marketing management. In a competitive environment. developing dealer distributor network from the major tasks. sales promotion campaign. evolving product concept. the function assumes key role in the organization. assessing consumer responses to a new market. The major source of finance in the organization is sales. designing the product. launch are the challenging tasks of the marketing management. positioning the product in the marketing and selling at appropriate price. The control of sales from the point of view of sales income is a major task of marketing management. It relies heavily on production for uninterrupted supply of goods. pricing. appropriate stock replenishments and inventory at various locations. In the process of performing the marketing function.CHAPTER 3 APPLICATION OF MANAGEMENT IN FORMATION SYSYTEM IN MARKETING MANAGEMENT The marketing management function deals with satisfying customers. evolving marketing strategies. stocking of products. The scope of the function starts from identifying the need for customers. Input transaction documents The most important transaction documents used in the marketing management function include (Jawadekar.

Product sale Product family Sales value Sales tax Dealer Distributor Customer Excise duty Zone Area Inventory . The number and nature of transactions would vary depending upon the product. etc. 2. 6. for industry data. APPLICATIONS ACCOUNTING There are several highly process-oriented accounting applications of marketing management. 9. 5. marketing function needs a host of other information which is not transaction based. and infrastructure of production and warehouses. industry association publications. 3. marketing organization. product literature. 7. 11. 10. The detailed entities are as follows(Jawadekar.• • • • Customer order Order acceptance Delivery note Invoice. credit note. 2007): 1. debit note As a support to these transactions data is borrowed from company literature such as price lists. These transactions may take place at various locations but their assimilations has to take place to conclude the marketing result. It draws heavily from sources such as product journals. The main accounting entity is sales in terms of quantity and value. 8. 4.

then whether manufacturing order is issued and if so. Query The queries in marketing management are on customers. customer groups. quality. In marketing function. The query could be on the performance of overall sales in relations to the budget. Receivables Market segment Exports market Returns Complaints Accounting applications build a lot of basic data for the organization. price and discounts. Decision analysis In day to day functioning. which meets the needs of statutory compliance and operations update.12. The queries are raised on its satisfactory disposal. price. discounts and commission. acceptance of order. zones and areas. The query may be on order pending position followed by whether stock exists for allocation to the order. 14. 15. stock. and address of customer. . If the customer order is to be fulfilled by manufacturing. 13. dealers. the decisions required to be taken are on pricing. decisions are rule based and can be supported by decision support system. what is its status? The query could be on assessment of sales performance on single dimension or multidimensions by comparison between two product groups. sale. Many times. deciding sales terms and so on. 16. queries are on basic data such as product specifications. allocation of stocks to orders. In most of these decision areas. and certain cumulative statistics pertaining to sales. product. names. and distributors. a lot of importance is given to the handling of customer complaints.

These factors are sales vs. packaging. risk analysis model. marketing cost vs. behavior. actual sales vs. there are a number of factors. The database then is used for various top management and middle management decisions in planning and execution. Applications are developed to support these decision building models such as break even model. budgeted cost. They fall in the category of strategic and tactical decisions. this data is collected on a routine basis to build up independent database on consumer profiles. budget. Some organizations collect this data from the point of sale. response to advertising campaigns etc. prospects and growth. deciding on a new product. distribution channels. dealers and distributors. Control In marketing management. Some applications help to reset the direction or trend in the development towards desired . dealer. product rating and buying decision. product sale vs. branch and marketing persons. However. competitor’s sales. network model.The complex decisions are price increase or decrease. planned sales programme vs. Some control applications help to correct ongoing operational performance. target fixed for market segments _ distributor. distribution mode. a selection routine is added in each application to bring out abnormal variations between actual versus expected. The organization in consumer industry have applications which are designed to collect consumer information on preference. they form the basis for analyzing the decision alternatives and their impact on marketing performance. product positioning. The applications are developed to report on these comparisons. This helps to take specific decisions and action in the area of shortcoming or failure. which need to be controlled for achieving business goals. product launch model etc. These decisions have far reaching effects on the marketing performance.

pricing. The control applications in marketing are designed with a very narrow focus for pinpointed attention. Marketing decisions take long time to respond and their implications are difficult to judge in short durations. current and future projections. 5.goals or objectives. 4. 3. value. They are produced regularly at equal intervals with classification on various accounts and are distributed to the concerned agencies. policy and strategy. Many times corrective action is required in the areas other than marketing. statutory compliance is mainly related to taxes and duties and filing the returns to appropriate government authorities. Product sales ledger Sales summaries Accounts receivables Orders received and accepted Sales analysis . gold etc. industry specific and are linked to business philosophy. 2. market. In some industries like alcohol. Reports Statutory compliance In marketing management. The control applications required by the top and the middle management in marketing are non-standard. stocks. Some application help to take decisions on strategic subjects such as product positioning. tobacco. sales. These documents are to be kept up-to-date and are subject to surprise checks by government auditors and inspectors. budgets with reference to the past. the organization is required to keep the information in a format prescribed by the government and file the returns in that format. Information update These reports are based on summaries of various entities such as orders. choice of market segment. product and competition. 2007): 1. The main reports are sales tax register and returns and excise duty returns. decision and action. design and so on.. It requires considerable understanding of behavior of the consumer. The information update reports are as under (Jawadekar.

Order book Dispatch report Inventory Invoice Customer complaints Complaints disposed . branch area and zone. product. executed. dispatched. Such factorial analysis gives valuable information and builds marketing knowledge helping to evolve the strategies in marketing. 2. 3. Aging of receivables Contribution analysis Market analysis Competition analysis Most of these reports are generated as functional information and they are not related to an individual’s needs. Some more typical reports are as follows (Jawadekar. 5. They are not analysis reports but reports informing facts on day to day operations. dealer and distributor. Zone and Area. the reports will be made by branch. These are made for junior management personnel in marketing and related functional areas such as store and accounts.. 6. A typical report will indicate daily order received and orders invoiced. processed. 4. 2007): 1. customer. accepted. 9. which are used for classification and summaries in these reports. product family. market segment. i-e. sales representatives. 7. class of customer. These reports have a fixed general format and they are produced in a summarized fashion in line with organization structure. There are eleven factors. 8. billed and money recovered. These reports are processed by way of daily transaction processing and making statistical summaries for quick update. viz. Operations update These reports inform the details of the marketing operations ranging from orders received. It is expected that these reports will be used by all concerned by picking up relevant information suited to them.6..

2007): . to confirm whether the choice of alternative is correct or not. In marketing function. changing the product position. for example risk analysis model throws light on market share. A report analysis pre. For example. inventory and personnel resources.These reports are produced with reference to a date and cumulative since beginning of the year. a number of such decision situations are present. New product introduction. allocating more budgets for expenses. packaging. where analysis or sales is necessary. design. These reports are unstructured and are decision specific. Action update The action update reports will lead to such decisions as price reduction. such as daily sales. There is another class of reports. The analysis may be with reference to price. No external information is connected and processed along with this statistical data. market. given the probable conditions of the company and its competitor in price. marketing expense and marketing mix are the examples of decision analysis models helping the marketing management to take a correct decision. dispatches. product market mix. a decision is taken to launch an advertising campaign in two segments to test the efficiency of the campaign. and so on. No high order data processing is involved. choice of market. Market research analysis reports fall in this category. Some of the action update reports are(Jawadekar. break even analysis. These reports provide guidance to the operating personnel as to how they are performing. which are generated using models. These reports tie up the specific decision to its results. withdrawal of product from the market. Decision analysis Decision analysis reports convey whether the desired / expected results are realized or not. inventory and invoice. Transactions during a day are processed in document sequence and grand summaries are taken on a daily basis. design and so on.and post-sales of the campaign will indicate a good advertisement.

• • • • • • Sale versus budget Expense versus sales Sales growth versus sale objectives Sales versus market segment versus budget Stock versus budgeted stock levels Complaints versus number of complaints serviced .

It enables integration of information. Virtual store Amazon.com . rediff. professionals.com. commodities and services.com Transaction process Icici.com. The basic capabilities of internet have given rise to number of business models.com. ebay. business organizations have undergone structural. cultural and qualitative changes.com. Software solutions make them faster and self reliant as they can analyze data information. It enables top reach new markets across the world anywhere due to communication capabilities. interpret and use rules and guidelines for decision making. and a new organization has emerged known as Ebusiness enterprise.BUSINESS With the emergence of internet. and provide access to everybody from anywhere.com Online marketing Education. Internet is creating a universal bench or platform for buying and selling of goods. facilitate communication. teams. Internet has given E-business enterprise a cutting edge capability advantage to increase the business value.com.com. seekandsource.com. groups. msn. E-business enterprise enables employees. wherever necessary.com Information store Yahoo. seekandsource. It has empowered customers and vendors / suppliers through secured access to information to act.CHAPTER 5 APPLICATION OF INFORMATION SYSTEMS IN E. It has opened new channels for businesses as buying and selling can be done on internet. customers to perform business operations through electronic exchange of data and information anywhere at anytime. vendors. rediff. billjunction.

customer behavior. enables more precise target marketing towards intended audience.com. it then helps to segment market by customer for advertising. In marketing system. IT helps to reach customer directly. Organizations use websites and portals to store and share information. customer’s demographic / psychographic profile.co. restaurants. Aberdeen. airlines booking. online maintenance service. and is in the position to understand customer behavior. 2007):. use networks to communicate. coordinate. . • • • • • • • • • • • • Enquiry processing Order preparation Order placement Order confirmation Order planning Order scheduling Order manufacturing Order status monitoring Order dispatching Order billing Order receivable accounting Order payment processing IT. and collaborate amongst structured teams and virtual teams. products or services is made of following components(Jawadekar. promotion and contact. gartner. online examination Virtual communities Linux group E-learning sifyelearning.com The business process of serving the customers to offer goods. the backbone of E-enterprise.Content selling Timesofindia.com Online services Railway.

be it cost. B2C: Business organization to customer B2B: Business organization to business C2B: Customer to business organization . Negotiations. E-commerce today covers an entire commercial scope online including design and developing. An integrated E-business system is capable of forecasting resources requirement. manufacturing. profit or productivity. Customer acceptance Figure: (Jawadekar.The architecture of these processes enables to receive inputs from other functional systems like marketing. delivering. Merchant server role in E-commerce ensure secure payment to seller by authorization and authentication of commercial transaction. selling. Customer Customer Marketing. Ordering and processing Delivery processing. With the advent of internet and web technology. Problem solving. Support Customer interactions. and manpower and measuring financial performance. E-commerce process model can be viewed in four ways and categories. Payment. and HR and process the same to account and analyze the impact on the business performance. Configuration guidelines Servicing. Advertising. namely buyer and seller. And unique and typical to E-commerce is one more participant known as ‘Merchant Server’. budgeting capital. E-commerce process has two participants. Product information. like in traditional business model. sales. Some e-commerce applications add order tracking as a feature for customer to know the delivery status of the order. managing resources. Dispatching. marketing. servicing. 2007):E-commerce process model The entire model successfully works on web platform and uses internet technology. and paying for goods. E-commerce E-business essentially deals with buying and selling of goods.

catalogs. business organization uses websites or portals to offer information about products. product configuration guidelines. More advanced B2B model uses Extranet and conducts business transactions based on the information status displayed on the buyers’ application server. E-newspaper website is an example of advertising and selling of goods to the consumer. In C2C model. On the server of the selling organization. payment. secured payment systems comes into operations to authorize and authenticate payment to seller. The delivery system then takes over to execute the delivery to customer In B2B model. In all models there are two channels: one channel deals with information delivery and sharing and other channel deals with the commercial aspects of buying and selling. which collect data and process it to create information databases. E-commerce applications are present for the use of customer. through multimedia clippings.C2C: customer to customer In B2C model. Then model works on similar line like B2C. The entire banking process works on C2B model where account holder of the bank transacts number of requirements such as seeking account balance. The participants have an authorized . customer participates in the process of selling and buying through the auction website. customer initiates actions after logging on to seller’s website or tpo server. On placement of order. A new customer interacts with the site and uses interactive order processing system for order placement. The users of these databases could be organizations or individuals in the capacity of buyer or seller. money transfer and so on. In this model. These two channels are built on back-end systems. They exchange technical and commercial information through websites and portals. buyer and seller are business organizations. Auto component industry uses this model for supplying parts and components to auto manufacturer based on the inventory levels and production programme. customer histories and so on. website is used for personal advertising of products or services. In C2B model.

clients. write or use it in any of the application. and Lycos) People involved in E-Business model other than users of the models are (Jawadekar. internet explorer) companies) Web directory providers (Yahoo. the intermediaries are: Hardware suppliers: servers. C2B and C2C. Alta vista. 2007): • • • • • Network access providers (ISP) Information access providers (internet browsers such as Netscape.access to information and have rights to read. Visa) Website design providers (Consultants and web developing adobe. B2C. Payment processors (Master card. 2007):: • • • • • • Webmasters Web designers Web developers / programmer Content provider Content designer Web administrator . routers and network card providers (Jawadekar. But to perform these activities certain intermediaries are required to handle the communication traffic between the two parties in B2b.

MD CHIEF INFORMA-TION OFFICER ORGANIZA-TION FOR BACKENED SYSTEM INFORMATI-ON TECHNOLO GY PROVIDERS ORGANZI-ATION FOR WEB /ERP SCM/ CRM DATA ACQUISITIO N& PROCESSING SYSTEMS DBA SYSTEM ADMINIS TRATOR WEB DESIGNER S. PROGRAM ERS WEB MASTER SYSTEM DESIGNE RS NETWOR K ENGINEE RS WEB AUTHOR PROGR AMERS CONTENT PROVIDERS AND DESIGNERS Figure: E-business organization structure .

This should not be taken as espionage on competitors. MKIS helps in achieving this as well. MKIS.in marketing field. MKIS helps in maintaining these profiles. This is important because some modern businesses have literally millions of customers. Field sales can also be monitored where sales agents are used to market Customers can be quickly updated based on their information kept in spending patterns. Following can be . NEW DIMENSIONS IN MKIS Through extensive use of computers in marketing field. 2. which are revolutionising the way customers were dealt with Customer Relationship management (CRM) Sales Force Automation (SFA) Call Centres Customer Relationship Management Businesses increasingly talk about fostering relationships with their customers. marketing information. 5. Dealers involved in sale of product can also be monitored to help enhance revenues Customer profiles need to be maintained focusing on their habits and Information on what competitors have been up to is also critical Forecasts of demand are also a critical part of marketing analysis.identified as some of the benefits of MKIS 1. products. newer concepts are emerging . Hence keeping personal touch with every individual customer is getting difficult . 4.CHAPTER 6 BENEFITS OF MARKETING INFORMATION SYSTEM MKIS helps organizations in efficient channel management. 3. 6.

Companies are clearly eager to nurture relationships with their customers. For some businesses there is Either a strong natural need – banks An emotional attachment – Fashion retailer. To achieve CRM. the less they need to plug the gap with new customers. Businesses need to understand the extent to which consumers want to engage with their brands.to achieve. Also the establishment of customer services centers has also removed the inconvenience to access vendor’s physical locations. Tastes and preferences Interests in Co’s brand extension initiatives CRM is a business strategy that goes beyond increasing transaction volume. CRM help in establishing communication to encourage customers to share information about their Habits. car manufacturer Benefits of CRM Maintains and enhances customer base Encourages customer loyalty Gaining more customers’ wallet-share The more effective a company's customer retention and defection management strategy. companies are curious to keep a soft touch in an efficient manner. Due to absence of physical contact. and procedures promote the relationship with the customer to increase sales. Reasons for adopting CRM Customers now prefer to execute transaction in an electronic environment through online-trading. CRM is primarily a strategic business and process issue rather than a technical issue. This requires keeping a customer-wise online track of past . Thus. revenue. a company wide set of tools. who are expensive to recruit. and customer satisfaction. technologies. Its objectives are to increase profitability.

Through“ .Identifying customer through Marketing channels. Their lifestyles Attitudes Perception about Co. Customization / Personalization Treat each customer uniquely” is the motto of the entire CRM process. the company can increase customer loyalty . with respect to.the personalization process.correspondence and transactions. CRM reduces cost of sales and distribution by Targeting advertising to customers to increase the probability that an offer is accepted Using web applications to decrease the number of direct sales people and distribution channels needed Managing customer relationships rather than manage products (a change in marketing) CRM minimize customer support costs by Making information available to customer service representatives so they can answer any query Automating the call centre so that representatives have direct access to customer history and preferences and therefore can cross-sell Key CRM Tasks Customer Identification -. Transactions.’s products Customer Interaction – Efforts made to retain customers for long-term profitability and relationship. and Interactions overtime Customer Differentiation – Segregating customers.

SFA empowers the sales force to close deals at the customer’s office and to configure marketing strategies at home.functions. Keeping track of customer preferences.integrated environment for high productivity. CRM deals with large amounts of customer data through various touch points and communication channels. which is rarely available Sales Force Automation It automates some of the company's critical sales and sales force management . Sales administration. CRM software requires highly . organizations that are basically marketing machines CALL CENTER .information as possible but still respecting limits for personal privacy Software Issues There are little standardized technologies and protocols for CRM implementation in the market.organizations. Sales staff performance. SFA is providing tools for very highly evolved sales . for example Customer account management. Forecasting sales. The individual firm is thus caught in an ethical dilemma – collecting as much .CRM Issues Customer Privacy Customer privacy is an important issue in CRM. Vendors publish new versions of CRM software as frequently as they can thus adding to client’s expenses.

and display it every time the customer calls so as . collective handling of letters.to help attendant review entire record Call Center-Challenges Call centre agents are challenged daily to navigate disparate. non-integrated applications as they attempt to resolve customer service requests.and dissatisfaction with the company . faxes. call center is widely gaining popularity.Due to its direct contact with customers. It refers to a department within a company or a third-party organization that handles telephone sales and/or service. record the telephonic conversation with the customers. Call centers should have direct access to every customer’s track record so as to help them handle queries in an efficient manner. As computers gain more and more involvement in marketing field. In addition to a call centre. Call centers use automatic call distributors (ACD’s) to route calls to the appropriate agent. Call centre should help cut long processing times which add to customer frustration . Modern day call centers. extract a summary of it. and e-mails at one location is known as a contact centre. presence of a highly efficient and integrated call center has become inevitable. The call centre should offer an integrative solution so that customers can be responded efficiently.

airlines have information about travel behavior that a travel magazine publisher would find useful. Here an important question arises that at what point does data collection became an invasion of privacy? Several cases have been observed where online surveys were conducted claiming that the responses will be kept anonymous when in fact the company was retaining the names and addresses of the respondents. marketers are faced with an increasing variety of ethical issues related too the collection and use of research information. and track internet activity with cookies. Typical ethical issues concerned with the marketing research are: Privacy in data collection It is possible to observe people with hidden cameras. Telephone surveys conducted . This information if linked to an individual’s name and address could be highly valuable to other businesses. Although the company claimed that respondents’ identities were not used in any way. identify an individual’s purchase behavior by combining scanner data and credit card or check-cashing records. it’s clear that responses were not anonymous.CHAPTER 7 FOR BETTER OR FOR WORSE? ETHICAL ISSUES IN MARKETING RESEARCH As the desire for better data collection increases and the techniques and technology for gathering data improves. For example. The problem is that gathering that information can be annoying and inconvenient for the respondent. firms often gather a considerable amount of information about their customers. Privacy in data usage In the routine process of business. The question is does the airline has any right to sell that information to a magazine? Intrusiveness All marketers want information.

SECURITY OF INFORMATION SYSTEM The information systems are vulnerable to modification. phoning a business and fallaciously representing oneself as a potential customer in order to collect data. researchers use trickery to gather data. at what point is extracting information from a person under false or misleading sham badly chosen? False representation Practices called “sugging” (selling under the guise of research) and “frugging” (fund raising under the guise of research) are unfortunately so common that they are negatively affecting the ability of legitimate researchers to gain respondents’ cooperation. and questionnaires sent to people t work can all be intrusive.around dinner time. Practitioners of these techniques use the ruse that they are researchers conducting a survey. After securing the cooperation of unsuspecting consumer and posing few questions. Hence they need to be secured from all these threats be devising a sound security system. extraneous data collected at the time of purchase. or intentionally misleading respondents about the sponsor or objective of research are deceptions. The issue here is at what point does requesting information become excessively intrusive? Deceptive implementation On occasion. However. Others contend that the issue is whether the consumer is misled. not what is presented. these deceptions are harmless and are actually viewed by researchers as essential to gathering candid responses. In most cases. For example. they attempt a sale or ask for a donation. Some researchers intentionally don’t disclose to respondents that they are research subjects participating in a study. intrusion or malfunctioning. . Some argue that research and selling or fund raising should never be combined in the same presentation. a researcher in a grocery store pretending to be a shopper and asking fellow shoppers their opinions of products or brands is nondisclosure. For example.

which can be either Physical. security is universally recognized as a pervasive. etc) Examples of intrusion The security might be required to stop unauthorized access to the financial system of a bank from executing fraudulent transactions. virus.g. So eliminating all possible losses is either impossible or too costly. Thus. Theft. The definition mentions threats.” Some losses will inevitably occur in all environments. Importance of Security Sound security is fundamental to achieving this assurance.“Information assets are secure when the expected losses that will occur from threats eventuating over sometime are at an acceptable level. . there is a need for organizations to protect themselves against the risks inherent with the use of information systems while simultaneously recognizing the benefits that can accrue from having secure information systems. quality. This would make employees/users of IS.g intrusion. rain. disasters. The purpose of intrusion may not only be to damage the database of the company but may be limited to stealing customer list for personal use transferring money illegally. though he is having authorized access to the system. earthquake. Management’s responsibility Executive management has a responsibility to ensure that the organization provides all users with a secure information systems environment. feel the importance of secure environment in which the IS works and operates un-tampered. (e. Furthermore. critically needed. Importance for security should be sponsored by the senior management. The level of losses decided should be linked with a time period in which the occurrence would be tolerated. as dependence on information systems increases. Level of losses should be specified. fire) or Logical (e. An employee before leaving the company may have to be stopped from data manipulation.

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stored. transmitted. or damage. and integrity. disclosure. (OECD) in 1992 issued “Guidelines for the Security of Information Systems”. and the information systems and communications that delivers the information. or retrieved from an electronic medium. and Integrity – data and information are protected against unauthorized modification (integrity). from harm resulting from failures of availability. inaccessibility.” The security objective uses three terms Availability – information systems are available and usable when required. processed. alteration or wrongful disclosure. Types of Information Assets The question is what needs to be protected in an Information systems environment? In a manual environment. usually the records kept in hard form are the main information assets to be safeguarded against various threats. Scope of Security The concept of security applies to all information. The relative priority and significance of availability. shared.Security Objective Organization for Economic Cooperation & Development. Security relates to the protection of valuable assets against loss. These guidelines stated the security objective as “The protection of the interests of those relying on information. confidentiality. and integrity vary according to the data within the information system and the business context in which it is used. In a computerized environments the sensitivity of the record being kept is enhanced. Confidentiality – data and information are disclosed only to those who have a right to know it. Security Policy The organization that is concerned with protecting its information assets and information system should devise a security policy to be communicated formally . confidentiality. The data or information must be protected against harm from threats that will lead to its loss. Valuable assets are the data or information recorded.

to all concerned in an organization. The security policy should support and complement existing organizational policies. The thrust of the policy statement must be to recognize the underlying value of, and dependence on, the information within an organization. Contents of Security Policy Security policy is a critical document which should be designed to include almost all aspects of security issues. The importance of information security to the organization; A statement from the chief executive officer in support of the goals and principles of effective information security; Specific statements indicating minimum standards and compliance requirements for specific areas: Assets classification; Data security; Personnel security; Physical, logical, and environmental security; Communications security; Legal, regulatory, and contractual requirements; System development and maintenance life cycle requirements; Business continuity planning; Security awareness, training, and education; Security breach detection and reporting requirements; and Violation enforcement provisions Definitions of responsibilities and accountabilities for information security, with appropriate separation of duties Particular information system or issue specific areas; and Reporting responsibilities and procedures Now the question that arises is how a security policy is to be devised. The organizations interested in raising the security levels of their information system undergo what is commonly termed as “Security Program” or “Security Review”. This can be seen as a first attempt to devise a formal security policy for the organization. Security Program

A security program is a series of ongoing regular periodic reviews conducted to ensure that assets associated with the information systems function are safeguarded adequately.” The first security review conducted is often a major exercise Conducting Security Program There are certain steps which need to be undertaken for conducting a security program. Preparation of Project Plan In this phase the review objectives of the security program are specified. The scope of the work to be done needs to be defined at the outset. Since there are possibilities of getting bogged down into the unnecessary details? This would help avoid too much of unnecessary work which may be undertaken with little benefit ahead. Major components of the project plan Objectives of the review: There has to be a definite set of objectives for a security review e.g. to improve physical security over computer hardware in a particular division, to examine the adequacy of controls in the light of new threat to logical security that has emerged, etc. Scope of the review: if the information system is an organization wide activity, what needs to be covered has to be defined, e.g. scope will determine the location and name of computers to be covered in the security review, etc. Tasks to be accomplished – In this component, specific tasks under the overall tasks are defined e.g. compiling the inventory of hardware and software may be one of many specific tasks to be undertaken for security review. Organization of the project team – A team is organized based on the needs of the security review. Resources budget – What resources are required for conducting security review. Schedule for task completion – Dates by which the tasks should be completed along with the objectives to be achieved.

Identification of Assets Identifying assets is the primary step in determining what needs to be protected. The classification of information assets is already stated above. Unless the assets are defined, the related risks cannot be determined that easily. Ranking of Assets The assets identified earlier should be given a rank according to the importance they have. Following are the critical issues Who values the asset? – Various interested groups (end user, programmer, etc) may be asked to rank the assets in accordance with the criticality of usage and importance to them and to the organization e.g a scale between 0 to 10 can be used for this purpose. Degrees of importance may be defined as very critical, critical, less critical, etc. How the asset is lost? – a customer master file might be accidentally damaged but the impact of being stolen would be higher. Period of obsolescence – within what time the asset becomes of no use without being used. As time passes by, assets keep losing value which also affects the security review. Threat Identification “A threat is some action or event that can lead to a loss.”During this phase, various types of threats that can eventuate and result in information assets being exposed, removed either temporarily or permanently lost damaged destroyed or used for un-authorized purposes are identified.

improved profitability of the company to larger extents. The club card also laid a foundation for a profitable Tesco-branded bank. used its Club card loyalty card to become the largest supermarket chain in the UK. That approach is instantly understandable to anyone who has a wallet full of cards just needing a stamp or two to qualify for a “free” sandwich or cup of coffee. Clubcard is a mechanism which fulfils the promise of the Tesco brand . but a the brains behind one of the world's most successful loyalty programs believe that that assertion is the first step toward failure. According to Clive Humby and Terry Hunt what companies really need to do is to establish loyalty programs that thank customers for previous purchases rather than encourage them to buy more. This program was started in 1995 and since then the club card has brought in to accounts of the company more than £1 billion in the form of profits. Tesco required the program to pay for itself within years of its initiation and tested rigorously to make quite sure that it did. Clubcard swiftly evolved from being a way to boost short term sales to becoming a fundamental tool for determining ranging and pricing. assisted by Tim Phillips. wrote a book named Scoring Points: How Tesco Is Winning Customer Loyalty. home delivery and latterly telecommunications. most importantly. the Clubcard Plus payment card and a number of incipient clubs along the lines of the Wine Club and the Baby Club fell by the wayside because they didn't meet the financial performance criteria of an ever hardheaded retailer. and the largest grocery e-tailer in the world. of whom club card is brain child. Above all. Recently the people. This book has a detailed insight into how Tesco how club card idea was perceived. Humby and Hunt. It led the way for Tesco to enter whole new sectors including financial services. A student card.CHAPTER 6 CASE STUDIES TESCO WINNING THE CUSTOMER LOYALTY AT BEST Companies start loyalty programs to encourage additional purchases. It has also fueled substantial overseas expansion and.

Tesco could calculate precisely the return on investment. Tesco was sending out 145. Tesco has an advantage of performing a thorough analysis which enables it to generate more than £100 million in incremental sales each year. 3. “By monitoring short-term coupon redemption rates and then tracking the ongoing transactional activity of the members across all store departments. Contribution to profitability Commitment of the customers Championing the brand . It analyzes this tsunami of data to send a magazine with segment-specific content and six highly targeted coupons to each member four times a year.000 combinations of magazines and coupons. As of 1999. 2. can of peas. The scope and capabilities of Club card are astounding. The three dimensions defined for the customers are. and two are for products that the customer has never bought before but there is some potential for the buyer to buy. Tesco provides four coupons for products the customer already buys in routine manner. The range of the programme has become colossal. Right at the start the data planner recognized that the current computing power wouldn't allow them to analyze more than a small proportion of customers and to capture a small proportion of the data available. 1. The planners had to derive lifestyle segmentations based purely on the analysis of shopping baskets. Numbers of companies do excessive promotions which genuinely just rob future sales instead of giving them a boost. Tesco collects data on each head of lettuce. These figures are much higher today.every little helps. bottle of wine or other item purchased by more than 10 million Club card members. Another benefit of this analysis is that they can accurately calculate the return on investment.” Three Dimensional Cubes Tesco has categorized its customers in a three dimensional cube. Each transaction captured 20 numbers and they analysis only 10% of the base. What is fascinating is the accounts of the problem solving at each stage.

and the second is “headroom. So it reframed questions. It also showed a refreshing ability to experiment for a large company. the more benefit you will accrue. • Establish a loyalty contract: “Open a Club card account with Tesco.” This benefit consists of money back based on purchases and precisely targeted coupons that are both useful and desired. including the unprofitable customers.Some imminent results from “placing” customers inside a three-dimensional cube are: 1. No customer wants to jump through hoops for a benefit after having given a company his business. This contains two elements. . even throwing out a decades-old program to start Club card. at a higher level. • Be creative: In the beginning. made astute extrapolations and did frequent tests. Key Principles of Club Card Program These are key principles of the Club card program: • Be self-funding: The program must pay for itself.” like those mothers who sign pregnant daughters up for Tesco's Baby Club. Championing is the potential to become a brand ambassador or. 3. technology and budget constraints prevented Tesco from analyzing more than a small portion of the data flooding in. It measures future customer profitability. That is the promise of many loyalty programs. The first axis is called “contribution”. Club card focuses on improving loyalty from all customers. not what customers require as value. 2.” Headroom is essentially share-of-wallet. a “brand mentor. The second axis is “commitment”. Tesco limits its marketing budget to 1% of gross sales and drops any activity that does not produce a sustainable sales uplift. The third axis is “championing”. The contract also includes simplicity. and the more you shop with us. Interestingly. or the potential to increase value in the future. The first is a measure of how likely the customer will remain a customer. It examines current customer profitability. but most companies just use these programs to sell what the companies have on hand.

many retailers are effectively wasting their money on price cuts that could be targeted to people who want them because they need them. could then identify customers who were more interested in “fresh” than “adventurous. “If Clubcard data could identify the products that were brought by the price-conscious customers. I still think there was an element of luck. at the lowest possible cost for Tesco….” The targeted price cuts enabled Tesco to attract more shoppers from competitors and capture the volume that supported the lower prices—all without hurting overall corporate profitability. A similar process. In the marketplace. Profitably. Products.” “Adventurous” customers bought products like extra virgin olive oil or Malaysian curries. a competitive supermarket. there were 1. make theirs lower and crown themselves the price leader. combined with sophisticated mathematics. Asda. Directly or indirectly Tesco has benefited from these market . that everyone bought were discarded to find the products that indicated an “adventurous” customer.like mass personalization. Clubcard's glory years have been those when UK customers have been looking for value. That is how destructive price wars started. most companies just look at competitor prices. Few companies do segmentation well. To compete on price.Company’s segmentation strategy is also very good. The baskets of these shoppers were examined to see what products they bought. then lowering those prices would have a huge benefit for them.2 million potential segments for Tesco customers based on the attitudes and beliefs driving behavior. was seen as the price leader because it did not have the expense of loyalty costs. The programme has been successful because it gave value to customers and created value for Tesco. Tesco's first step was to use the data to look at price-sensitive customers. but not by the rest of us. like bananas. The question is how do you put each customer into the right segment? The solution was the “Rolling Ball.” It is also interesting to discuss that how loyalty program could guide intelligent pricing. This would have been extremely expensive. By not knowing their customers. Technically. And it didn't attempt to do anything else .

adaptable and present a solution which can be run on the Tesco system. to use site intelligence for effective online business intelligence.com. This will also enable them to have customer loyalty and have longer term loyalty contracts with the customers. Most of the promotional cost of the programme is borne by suppliers who may regard it as a devil's contract but at least one which with measurable returns. in order to drive profit generation. usable and actionable information. The action taken by company is a move towards Tesco’s multi-channel retail strategy and will enable the company to analyze all aspects of its online customer acquisition.shifts as it has given its customers money back while nudging them spend more on premium products and constantly expanding the range of services available. Tesco. This proves a point that Tesco has enough capability to collect and analyze large pools of information from all of its online business streams and can prepare or receive informative and valuable reports that give much greater customer understanding and the ability to improve upon their services as well as the website design and marketing. Stuart Gregory. to convert online business data into precise. Use of Online Business Intelligence Tesco decided in 2006. Tesco uses Site Intelligence’s “Visitor Behavior Information System” (VBISTM). Nor do they need to keep the stock in store. evaluated and consistently improved". Today you don't need to go to the store to purchase a significant proportion of Tesco’s products. Tesco chose the site intelligence system to provide its customers with a solution which is fast. retention and conversion behavior. This shows how hard it is to succeed at establishing and supporting loyalty schemes and how easy it is to fail with a loyalty scheme that is focused more on sales than on retention and profitability.com said: “We wanted a robust web analytics system that we could manage in-house and were flexible enough to meet the growing demands of all our business managers. This will lead to better conversion rates and improved customer retention for the business. This site intelligence is used for Tesco. VBIS from Site Intelligence will provide us with online marketing intelligence ensuring all our marketing campaigns are measured. .

Tesco uses this VBIS across Tesco. . Tesco personal finance and Tesco.net. It is simple to add in new data sources and undertake cross analysis of all data. This helps them to understand how the online business channel is used and also guide the continued development of channel to better serve its existing and potential customers. In addition VBIS has a robust database that has been proven to work effectively in large organizations with high levels of data.com. This system also helps the marketing decision support system because it enables the managers to get there reports prepared quicker and further interrogation can be exercised instantaneously and efficiently. VBIS enables businesses to gain the insight they require quickly and cost-effectively in order to profitably drive future customer led activity.

hundreds of .airports. Acquisition cost for traditional media was estimated to be above $60 per . "Couponing" is the traditional method to get people to try the service.user The Challenge Create a broad reaching Wi-Fi couponing campaign that produces the lowest cost per .and adjusted to ensure effort was focused on the highest return areas The Results Within a few weeks of launch.AT&T WI-FI COUPON ONLINE CAMPAIGN When Telecomm giants SBC and AT&T merged in 2006. All marketing was proactively monitored . Caribou Coffee shops. conversion rates for getting non Wi-Fi users to bring a laptop or other mobile device to a venue and login is low using traditional advertising such as direct mail & POP advertising. the campaign started producing significant . AT&T’s new Wi-Fi service had been available in Barnes & Noble book stores. and many other venues. A Wi-Fi locator site was built to enable people to find local venues and to act as the coupon awareness focal point. they wanted and needed more The key to expanding a Wi-Fi user base is to get people to actually try the service. it meant AT&T was acquiring one of the largest Wi-Fi networks in the nation. however.visitor The Solution Online buzz marketing was determined to have the most potential to reach the target audience. A wide variety of online marketing techniques was used. from banner ads and pay per click to content networking and guerilla marketing on Wi-Fi related sites. However.

the campaign was tuned using live metrics to increase usage by more than four times per same dollar spend.00 per user. During the next four weeks.675 unique coupons were used. representing an acquisition cost of less than $15. .traction. generating 183 coupon usages a week. 1. Online buzz marketing had achieved returns four times less than the estimate for traditional marketing. By the end of the three month exploratory campaign.

html 6. the manager’s view. 2001.org/tg2k/_information_system. P. February 28. information systems.marketing. 21 November 2006. .REFERENCES 1.atis. third edition... E-consultancy.. 2004. marketing information systems. http://www. Kotler. Wreden N. 3rd edition 5. marketing. http://www. http://www. management information system.e-consultancy. Jawadekar W. Schultheis R.marketingprofs.htm 4. Marketing glossary. 2007. Tata McGrawHill. text and cases. E-business enterprise. Prentice-Hall 3. July 13. Tesco chooses site intelligence for web analytics.asp?sp=1#split 7. Tesco winning customer loyalty..org. Management Information Systems.com/news-blog/362196/tesco-choosessite-intelligence-for-web-analytics. 1995. 2007. Telecom glossary 2k.au/glossary/DICM. & Sumner M. http://www.html? keywords=site+intelligence 2.com/4/wreden8. (1988) Marketing Management: Analysis Planning and Control.

applications in manufacturing sector.8. . management information system.. Tata McGraw-Hill. third edition. Jawadekar W. text and cases. 2007.

to list customers who requested a follow-up visit by date and to relate sales calls to other factors. the ability to keep customer lists. which is known as contact management software. such as total revenues generated by customers total previous sales. . scheduling. and the ability to merge letter with customer lists for large mailings. and contact files can be used to schedule or analyze sales calls and for selective or mass mailings. 3. 1. and other support for sales people. prospect. file. Document support features may include a package of form letters that salespeople can use or adapt. Prospect or current customer files can be searched to identify which customers were visited during a period to display how often they were visited. Customer. Sales people have adopted sales contact software. 5. Help salespeople sell the organization’s products and services Helps sales managers manage sales personnel Help manage the telemarketing program Help manage customer support Provide integrated services for many sales and marketing activities Sales personnel support software Sales personnel support software provides document. or type of product purchased. to find which customers have not been visited during the last month. 2.OPTIONAL APPLICATIONS OF SPECIFIC SOFTWARES TO THE MARKETING FUNCTION In last few years many specialized softwares have been developed for the variety of marketing activities. File support features may include the ability to record and store information about potential and current customers. 4. Specialized marketing can be classified into five categories.

fax capabilities. generate follow-up letters to the customer. to identify trends in customer purchases. The packages may allow them to make notes about the telephone calls they make. to analyze sales person calls within territories or by customer types. The software allows the manager to identify weak territories or weak products in a territory. Sales management software keeps track of sales person call activities. even if they are working in another software package at the time. and auto dialers with their products so that the sales person can automatically dial customers for voice or fax sessions. e-mails. Sales management software may access data from the financial information system or from the database created by sales person using sales support software. to compare sales person performance against sales person goals. and the success of products by sales person. Telemarketing software Telemarketing software provides computer support for identifying customers and calling them from disk-based telephone directories or from customer files maintains on a database. and organizing tasks with ease and speed. to identify potential shortages or excess stock in inventory. and customer type. to compare sales person performance by product and customer type. .Sales person support software often includes a calendar module to help salespeople manage their meetings and customer appointments and a tickler file module to ensure that they follow through on their promises to customers at the appointed time. territory. sales orders and customer activity. and to perform other planning. the fertileness of sales territories. Many vendors provide to-do lists. The software company might provide sales people with regularly updated telephone directories of major corporations or specialized lists of selected customer types. The tickler file may provide an alarm to prompt sales people to make preplanned calls. controlling. and view a customer file while a call to that customer is in progress. Sales management software Sales management software gives the sales manager the ability to assess the product activity of the sales force.

including competitor products. it is helpful to a large number of marketing personnel. but also improved customer service. to analyze customer purchasing trends. Telemarketing has moved from mainframe systems to microcomputer systems. In addition it supports many marketing professional throughout the organization by drawing on data not only from sales people through out the organization’s financial database. payments. and order entry files to enhance decision support. including marketing researchers and those who develop strategic marketing plans. This software has allowed many firms to substantially increase sales while decreasing the costs per sale. Thus. Customer support software Customer support software provides information to salesperson about the previous experiences of customers with the organization such as detailed information on purchases. dial and connect sales people automatically top people or companies listed in disk-based telephone directories. These firms have increased market shares over their competitors by using the technology. or permit the sales person to answer the call. Because of the wide variety of data available through such software. or customer support. . to identify customers who have purchased products that require follow-up calls. sales management. to identify customers who should be called.Other software is designed to find. This software may then provide a digitized message about a product to those who answer the phone. Customer support software allows sales people to view customer data prior to sales call. integrated software can bring together the islands of un-integrated data contained in contact files. prospect files. and to perform many other sales activities pertaining to customer maintenance. Integrated marketing software Integrated marketing software combines programs that also may be sold as standalone packages for sales person support. Thus the use of customer support software results not only in improved sales force productivity. and specific products purchased by each customer.

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