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There has been considerable interest in recent years in marketing decision support systems (MDSSs). This is particularly so in the UK and the USA. In both cases, the published research suggests that MDSSs have been gaining in popularity particularly over the last decade. Both the USA and UK are characterized by vast domestic markets (in the case of the UK, this includes the whole of the EU) and a dominance of manufacturing industry. These countries are of course key players in the Organization for Economic Co-operation and Development (OECD) family of nations. However, some of the other OECD countries have quite different characteristics. Perhaps the nation providing the greatest contrast is Australia. Australias population is slightly in excess of 17 million persons, which severely restricts the domestic market; the nation also does not have access to vast markets through common market arrangements. This severely restricts economies of scale and experience curve effects, which limits the competitiveness of manufactured products sold abroad. At the same time, the nation is vast and has rich and diverse natural assets. The nations wealth rests heavily on natural resource exploitation, particularly for export. An obvious question has therefore arisen about the extent to which MDSS technology has been applied in smaller countries like Australia with quite different characteristics from the USA and UK. Further, it should be asked what the scope is for the technology in future years in these regions. This article is directed at these issues and reports on the results of an ongoing study into MDSS in Australia. Apart from raising the general issues for cases such as Australia, the article reports on the results of a recent survey
Marketing Intelligence & Planning, Vol. 13 No. 2, 1995, pp. 14-28 MCB University Press Limited, 0263-4503
conducted in Queensland, which is one of Australias fastest growing states and whose population and economic base form an even greater contrast with conditions typically found in the UK and the USA. The article is divided into six sections. The first part compares and contrasts Australia with the UK and the USA. Following this is a review of recent contributions to the MDSS literature, after which comes a brief report on the nature of the survey conducted, and a presentation of the major findings of the survey compared with findings from the northern hemisphere studies. The penultimate part briefly assesses the potential contributions that MDSS can make in Australia towards 2000, and, finally, the conclusion is presented.
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Table IV. GNP per capita, current account deficit and net
external liabilities: Australia, the UK and the USA Current account deficit (% of GNP) 3.36 0.99 0.43 Net external liabilities (% of GNP) 45
Table III, which is based on an OECD comparative advantage index, also shows that Australias manufacturing exports are dominated by low technology (mainly processed primary) products compared with high technology for the UK and the USA. The larger the index number, the greater the relative specialization in the area concerned; an index value of 100 is the OECD average (see OECD, 1992). Table IV summarizes GNP per capita in US dollars, and the current account balance and net external liabilities (foreign debt and equity), the later two both as percentages of GNP. Table IV shows that, despite their different structures, all three countries enjoy high living standards by international standards. However, Australias current account balance as a percentage of GNP is high, relative to the other countries. Also, Australia has significant external liabilities; about 80 per cent of these liabilities being foreign debt. Thus, in contrast with UK and US experience, the figures in Table IV suggest that Australias living standard is being substantially supported by foreign debt. The state of Queensland takes in the central and northeastern parts of Australia, bordering the Pacific Ocean in the east. It occupies some 1.726 million square kilometres, has a population of some 3 million people and contributes just short of 20 per cent to Australias GNP. About half of the population lives in the states south-east corner, with the remainder concentrated in a number of major centres along the eastern seaboard extending to about 1,500 kilometres north of the states capital, Brisbane (ABS, 1993b).
Source: ABS (1993a); UK Government Statistical Service (1993); USA Federal Reserve System (1993) and World Bank (1993b). Data are for 1991
Recent literature
The importance of good information to make decisions has been recognized formally since the mid-1960s and at that time Kotler (1966) recognized the strength of using computers to collect, analyse and disseminate information on which marketing decisions could be made. By 1968, it was starting to become fashionable to develop MDSSs which consisted of separate subsystems for each ingredient of the marketing mix, i.e. product, price, place and promotions. Examples of attempts at such model building include the Brien Stafford model (1968) and the Crissy Mossman model (1977). In fact various modelling attempts followed similar patterns that is to provide, according to Choffray and Lilien (1986), standardized reports with multiple sources of information, particularly within large firms. It is suggested therefore, by the authors of this article, that the period from the mid-1960s to the early-1990s focused on attempts at generating a generic MDSS model. On reflection, during the early 1970s, other researchers were trying to classify information according to its use by the organization rather than fit it into a stereotype marketing format. So, for example, Buzzell et al. (1969) classified information according to the following criteria: q control information; q planning information; q information for basic research.
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Other writers were becoming interested in identifying exactly what decision makers wanted information for, rather than prescribing what should be available to them. This gave rise to such approaches as ETHICS by Mumford (1981). The ETHICS approach, which stands for effective technical and human interaction of computer systems, consists of two parts: (1) the technical system involving various job tasks and technology; and (2) the social system involving people with their various roles, behaviours, etc. Eason (1982) supported this view, commenting:
Systems usability is a many-faceted issue, and if we are to design usable systems for non-specialist users we cannot rely on the traditional approach of developing a technical system and solving organisational issues during implementation. If the system is to be effective, the users have to be involved during the development stage to specify their task needs, to indicate the interfaces they will find easy to use, specify the user support they require, and to identify and resolve organisational ramifications (Eason, 1982).
of the Fortune 1,000 had them. Despite this increased popularity, one point always to bear in mind when developing MIS is brought to our attention by Eisenhart (1990), namely that: If you put MDSS in the hands of lousy decision makers you get lousy decisions.
During the formative period of MDSS development and use we have constantly been reminded that all has not been well in the use of MDSS (for example, Jobber (1977) who undertook a US and British industry study and Fletcher (1983) who carried out a British industry study). Two of the main reasons are: (1) the lack of market or customer orientation shown by some firms; (2) an unwillingness to adopt new technologies or systems perceived to be incompatible with existing values, beliefs or mode of operation (Carper, 1977). According to Fletcher (1983), who was writing about the UK:
Our slowness to adopt new technologies and ideas would not be so important if we did not have a history of losing market opportunities created by innovations to our overseas competitors. This inertia, lack of commitment and enthusiasm, must be overcome if we are to regain a foothold in shrinking markets.
While the issue raised here by Fletcher was not directed at the Australian situation, the effect is the same if we consider that Australia must gain a competitive advantage over foreign competitors to develop its value-adding sectors. Therefore, we cannot allow inertia or lack of commitment or enthusiasm to hold us back in this endeavour. A recent study by Higby and Farah (1991) in the USA seemed to indicate, for the USA at least, that progress in the development of MDSS is being made, as MDSS were used by 91 per cent of marketing managers in their sample. This is in stark contrast with the 1971 situation when the Boone and Kurtz (1971) survey indicated that only about one-third of the Fortune 500 had MDSS and, by 1985, the McLeod and Rogers survey indicated that approximately three-quarters
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Even though the database we used as the basis for our survey already had information on the number of employees, we included a question which asked for employment numbers as a check on the accuracy of the database information. We found that our survey results actually corresponded very closely with the database. In all, some 708 usable responses were received. This is a response rate of more than 50 per cent, which is high compared with many overseas studies on MDSS. We attempted to check the extent of possible non-response bias first by comparing the distribution of answers from the initial survey with the follow-up. We also interviewed a small sample of non-respondents. On the basis of these checks, we are satisfied that the 708 respondents form a representative sample, i.e. that there is no undue cause for concern about non-response bias. As a result, our sample will be treated as random (i.e. in relation to the target group of businesses employing 50 or more full-time persons) for the purposes of the analysis in the next section.
Tables VII and VIII show the respondents according to the extent to which they were exporters and importers. Again, our sample includes a good number of businesses in both categories. We now turn to some key findings about marketing decisions. Table IX examines responses to the question, How important do you consider each of the following factors for your organizations/divisions success? Responses were ranked 1 (very important) to 5 (very unimportant). While all of the categories were obviously important to sample members, some were more important than others. The rankings are based on 95 per cent confidence intervals. Where confidence intervals did not overlap, the factors were ranked in descending order of magnitude of the intervals. Where intervals overlapped, the categories were ranked equal. Because the respondents form a large part of the target population, a finite population modifier (as detailed for example in Harrison and Tamaschke (1994, Ch. 6)) was used to calculate the standard errors used for the various confidence intervals presented in this article. Inspection of Table X shows that product-related factors were considered most important, and this was followed by
Results
This section summarizes the major findings of our survey, and contrasts them with findings in the northern hemisphere. We begin with a profile of the sample members. Table V provides a frequency distribution of the respondents according to numbers employed (full-time equivalent). Inspection of Table V shows that the bulk of respondents employed fewer than the equivalent of 250 fulltime employees. At the same time, data on annual turnover of the respondents (available from the database used to select the target group) indicate that more than half the sample members had an annual turnover of less than $A20 million in 1992. Table VI gives details of sample members according to industry classification. Inspection of Table VI shows that there is a good spread across groups. The largest group is services, and the smallest groups are agriculture and mining.
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Table X. Summary results for the question, How important is each of the following factors in the formulation of your organizations/divisions marketing decisions?
Factor Mean 95 per cent score confidence interval Rank
The marketing information collected 1.582 Goals and objectives Financial structure Industry experience 1.407 1.835 1.679
2 1 4 3
We now examine the use of computers, hardware, software and ultimately MDSS. Tables XI and XII provide percentage distributions about the use of hardware and software and it is quite obvious that the new technology is firmly entrenched among marketing staff in most cases. In the case of software, a good number of respondents have packages which are used for analysis, particularly spreadsheets, databases and statistical packages. The use of spreadsheets seems as widespread as in the recent study by Higby and Farah in the USA (1991). Table XIII provides responses to the question, Does your organization/division obtain marketing information electronically through any of the following sources? Listed as alternatives are e-mail as well as a number of database sources readily available in Australia. In all cases (except email) over 50 per cent of respondents indicated that they never used these facilities, even though less than 20 per cent indicated that these information sources were not applicable; only a very small number of respondents indicated that one or more of these sources were frequently accessed. This is also supported by the responses to another question which showed that manual filing was frequently used to store marketing information. Hence,
the way the organization was managed. The marketing function was third in the ranking. These results seem consistent with recent overseas findings (for example, Higby and Farah (1991)). Table X provides similar results for responses to the question, How important is each of the following factors in the formulation of your organizations/divisions marketing decisions? The same five-point scale as for the previous question was used. In this case goals and objectives were considered most important, followed by marketing information, industry experience and financial structure. The respondents to the above questions indicated that marketing and marketing information played key roles in the formulation of marketing decisions of the respondents.
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standards. Higby and Farah (1991) indicate that some 90 per cent of marketing managers in their sample used MDSS. Admittedly, their response rate was low and their sample much smaller than ours, but the disparity does seem very large. The MDSS users were asked, How satisfied are you with the following aspects of your MDSS? The responses were ranked from very satisfied (1), satisfied (2) through to very dissatisfied (5). Table XIV summarizes the percentage of MDSS users who were either satisfied or very satisfied with the different aspects of their MDSS. Table XIV suggests that respondents showed least satisfaction in respect of access to outside data. Greatest satisfaction was with ease of use, access to internal data and ability to assist with pricing decisions. Satisfaction with contribution to profits was well below these levels, which suggests that there could be some uncertainty about the contribution of the technology to profits, which is along the lines reported by Eisenhart (1990) for the USA. We also asked the following question, If you have so far managed without an MDSS, how likely is it that you will develop one? Some 30 per cent of respondents currently not having an MDSS indicated that they are either likely or most likely to develop one. This translates to a confidence interval of 28.8 to 31.2 per cent. In summary, we have found clear evidence that a good number of respondents have the basic ingredients of the MDSS technology but that few have taken the total step. The area that seems particularly deficient is data access. Many organizations do not access external databases and also much information is stored manually, which limits analysis. There is every reason to believe that Queenslands experience is indicative of that of Australia as a whole. This
while computer and software facilities were clearly in use in the vast majority of cases, what might be called a key ingredient in MDSS technology was clearly lacking in most companies. This is borne out by responses to the question, Has a marketing decision support system (MDSS) been established in your company? To assist the responses we provided the following definition of an MDSS:
An MDSS is an interactive computer program which is specifically designed to assist with the making of marketing decisions, for example in relation to price, promotion and locational matters. Such a program integrates database information and statistical analysis and is usually accessible from desktop computers.
Only 58 respondents in our sample of 708 indicated that they had an MDSS. The 95 per cent confidence interval for the proportion of businesses employing 50 or more people having MDSS technology was found to be in the range of 6.8 to 9.6 per cent. This is very low by US and UK
Source E-mail Online access to Australian Bureau of Statistics Ausinet BRS information technologies Compu-serve Dialog Discovery Supersearch
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is because the state contributes nearly 20 per cent of the nations GNP and population and because many Queensland companies have strong interstate ties.
Conclusions
The article suggests that marketing decision support systems should be tailored to differences in economic and business circumstances between countries. In the specific case of Australia, the push towards deregulation and increased emphasis on market forces suggests that information required for business decisions and the relevant software be readily available to provide decision support. The results of the study reported here suggest that there is an urgent need to boost the pace of development in this area and that this should be given a high priority in government policy initiatives.
References and further reading Australian Bureau of Statistics (1993a), International Investment Position Australia, Cat. 5306.0, ABS, Canberra. Australian Bureau of Statistics (1993b), The Queensland Year Book, Cat., ABS, Brisbane. Australian Bureau of Statistics (1993c), Balance of Payments, Australia, Cat. 5302.0, ABS, Canberra. Beddall, D.P. (1990), Small Business in Australia Challenges and Opportunities, Recommendations and Main Conclusions , report of the House of Representatives Standing Committee on Industry, Science and Technology, AGPS, Canberra. Boone, L.E. and Kurtz, D.L. (1971), Marketing information systems: current status in American industry, in Ailvine, F.C. (Ed.), Marketing in Motion: Relevance in Marketing, Proceedings AMA Conference, Chicago, IL, pp. 163-7. Brien, R.H. and Stafford, J.E. (1968), Marketing information systems: a new dimension for marketing research, Journal of Marketing, Vol. 23 No. 3, pp. 19-23. Buttery, A. and Tamaschke, R. (1992), Australias needs and management education, Management Decision , Vol. 30 No. 7, pp. 18-24. Buttery, E.A. and Buttery, E.M. (1988), A computerized decision support system for the control and development of marketing, Information Management, Vol. 3 No. 4. Buzzell, D., Cox and Brown (1969), Marketing Research and Information Systems, McGraw-Hill, New York, NY. Carper, W.B. (1977), Human factors in MIS, Journal of System Management, Part II, pp. 48-50. Choffray, J.M. and Lilien, G.L. (1986), A decision support system for evaluating sales prospects and launch strategies for new products, Industrial Marketing Management , Vol. 15, pp. 75-85. Cox, D.F. and Good, R.E. (1967), How to build a marketing information system, Harvard Business Review, Vol. 45. Crissy, L.J.E. and Mossman, F.H. (1977), Matrix models for marketing planning: an update and expansion, MSU Business Topics, Vol. 25 No. 4, pp. 17-26.
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Department of Industry Technology and Commerce (1991), Small Business in Australia, First Annual Report, AGPS, Canberra. Eason, K.D. (1982), The process of introducing information technology, HUSAT Memo, No. 239 (unpublished). Eisenhart, T. (1990), After ten years of marketing decision support systems, wheres the payoff?, Business Marketing, June. Fletcher K., Buttery, A. and Deans, K. (1988), The structure and content of the marketing information system: a guide for management, Marketing Intelligence & Planning in Action, Vol. 6 No. 4. Fletcher, K.P. (1983), Information systems in British industry, Management Decision, Vol. 21 No. 2. Harrison, S.R. and Tamaschke, R.H.U. (1994), Statistics for Business, Economics and Management , Prentice-Hall, Sydney. Higby, M.A. and Farah, B.N. (1991), The status of marketing information systems, decision support systems and expert systems in the marketing functions of US firms, Information and Management, Vol. 20. Jobber, D. (1977), Marketing information systems in US and British industry, Management Decision, Vol. 15 No. 2.
Kotler, P. (1966), A design for the firms marketing nerve centre, Business Horizons, Fall, p. 70. McLeod, R. and Rogers, J.C. (1985), Marketing information systems: the current status in Fortune 1,000 companies, Journal of Management Education Systems, Vol. 15 No. 4, pp. 57-75. Mumford, E. (1981), Participative system design: structure & method, systems objectives, solutions, Solutions 1, No. 1. OECD (1992), Industrial Policy in OECD, Annual Review , OECD, Geneva. United Kingdom Government Statistical Service (1993), United Kingdom National Accounts, HMSO, London. United States of America Federal Reserve System (1993), Federal Reserve Bulletin, Washington DC. Wiltshire, F.M. (1971), Department of Trade and Industry, Report of the Committee on Small Business , AGPS, Canberra. World Bank (1993a), World Bank Atlas , World Bank, Washington DC. World Bank (1993b), World Tables 1993 , World Bank, Washington DC. World Bank (1993c), World Development Report 1993, World Bank, Washington DC.
Factor Production-related (product/service quality, production methods,quality of personnel and other inputs, etc.) Marketing strategies (pricing, promotion, distribution channels, etc.) The way your organization/division is managed Good industrial relations
Dont know 6
Not applicable 7
Actions of your competitors Factors external to your organization/ division, excluding actions by competitors (e.g. government legislation/policy)
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2. To what extent do your competitors use the following tools to compete? (Please tick one box for each tool ) Neither much nor Very little Much much 1 2 3 Tools Keen prices (including discounts) Special offers (not including discounts) Product/service quality Customer relations Public relations Advertising Other (please state):
Little 4
Very little 5
Dont know 6
Not applicable 7
3. How satisfied are you that the marketing information collected by your organization/division adequately covers each of the following aspects? (Please tick one box for each factor ) Neither satisfied nor Satisfied dissatisfied Dissatisfied 2 3 4
Aspect Analysis of market characteristics (e.g. buyer behaviour, understanding what customers want) Evaluation of the effects of advertising and promotion Distribution channels Assessment of future trends in your industry Changes in public opinion
Very satisfied 1
Very dissatisfied 5
Not applicable 6
Political climate Economic climate International developments Environmental/green issues Customer attitudes towards competitors products/services
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4. How do you currently store marketing information received from various sources? (Please tick one box to indicate your main storage medium for each source of information) Storage medium Computer Source of information Surveys conducted by your organization Surveys commissioned by your organization (e.g. from management consultants) Off-the-shelf reports Company employees Trade associations/publications Professional information sources (e.g. BRISQ, INFOLINE) The media Other (please state): 1 Library 2 Manual filing 3 Microfiche 4 Personal memory 5 Other (please state) 6
Not applicable 7
5. How important is each of the following factors in the formulation of your organizations/divisions marketing decisions? (Please tick one box for each aspect ) Neither important Very nor Very important Important unimportant Unimportant unimportant Factor 1 2 3 4 5
Not applicable 6
The marketing information collected by your organization Your organizations/divisions goals and objectives Your organizations financial structure Industry experience (including "gut" feelings)
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6. Who analyses your organizations / divisions marketing information prior to the formulation of marketing decisions? (Please tick one box) 1 The marketing department alone
The marketing department in consultation with staff from other parts of the organization
The marketing department in consultation with experts from outside your organization
The marketing department in consultation with staff from other parts of the organization and outside experts Other (please state):
7. Which kinds of computer does your marketing department use as part of its normal function? (Please tick one box) 1 2 3 4 Mainframe/minicomputers Personal computers Both categories of computer Do not use computers
8. Which of the following kinds of programs are used by your marketing department? (Tick as many boxes as you wish) 1 2 3 4 5 Word processing (e.g. Word, WordPerfect, Wordstar ) Spreadsheet (e.g. Lotus, Excel, Quattro) Database (e.g. DBase, Paradox, Framework) Statistical packages (e.g. regression, modelling, forecasting) Other (please state):
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9. Does your organization/division obtain marketing information electronically through any of the following sources? (Please tick one box for each source) Neither frequently Very nor frequently Frequently infrequently Infrequently Source 1 2 3 4 Electronic mail Online access to the Australian Bureau of Statistics Ausinet
Never 5
Not applicable 6
Compu-serve
Dialog
10. Has a marketing decision support system (MDSS) been established in your organization/division? (Please tick one box ) (An MDSS is an interactive computer program which is specifically designed to assist with the making of marketing decisions, for example, in relation to price, promotion and locational matters. Such a program integrates database information and statistical analysis and is usually accessible from desktop computers) 1 2 Yes No
11. Who designed your MDSS? (Please tick one box ) 1 2 3 4 Designed by marketing specialists Designed by computer specialists Designed by both marketing and computer specialists Other (please state): 12. Who operates your MDSS? (Please tick one box ) 1 2 3 Staff within your organization Consultants outside your organization Both categories
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13. How satisfied are you with the following aspects of your MDSS? (Please tick one box for each aspect ) Neither satisfied nor dissatisfied 3
Very satisfied 1
Satisfied 2
Dissatisfied 4
Very dissatisfied 5
Not applicable 6
Access to data from outside your organization/division Ability to perform statistical analysis Modelling capabilities Ability to assist pricing decisions
Ability to assist promotion/advertising decisions Ability to assist locational decisions Contribution to profits Other (please state):
14. If you have so far managed without a marketing decision support system, how likely is it that you will develop one? (Please tick one box ) 1 2 3 4 5 Most likely Likely Neither likely nor unlikely Unlikely Most unlikely
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And finally a few questions about the nature of your organization and industry 15. Which of the following categories best reflects your organization's/division's main area of business? (Please tick one box) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Agriculture Forestry, fishing and hunting Coal mining Mining and extracting industry (excluding coal, oil and gas) Electricity generation and/or distribution Production of fuels other than coal (oil, petroleum, gas, etc.) Minerals processing Basic manufacturing, other than minerals processing Secondary manufacturing Building and construction Community services (including health, education and welfare) Finance, property and business services Transport and storage services Communications Wholesale and retail trade Tourism/accommodation Other (please state):
16. How many full-time (or equivalent) employees do you have in your organization/division? (Please tick one box) 1 2 3 4 5 Fewer than 50 50-99 100-249 250-499 500 or more
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17. Approximately what percentage of your organizations/divisions turnover is received from individuals or organizations which are normally domiciled outside Australia? (Please state):
per cent
18. Approximately what percentage of your organizations/divisions sales revenue is from imports of finished products into Australia? (Please state):
per cent
Thank you for completing the questionnaire please return it in the business reply envelope provided
Alan Buttery is Professor in the Department of Management at James Cook University, Townsville, Queensland, Australia and Rick Tamaschke is a Reader at the Graduate School of Management, University of Queensland, Brisbaine, Queensland, Australia.