Marketing Information System of Coca-cola

Assignment On Marketing Information System of Coca-cola

Course name: Marketing Information System

Course No: 323

Prepared For:
Md. Moktar Ali Associate professor Department of Marketing Faculty of business studies University of Dhaka.

Prepared By:
Juvenile group Section A 15th Batch Department of Marketing Faculty of business studies University of Dhaka.

Date of Submission:

21st November, 2011.

Group: Juvenile Members of the Group:

Serial no. 01 02 03 04 05 06 07 Name Suranjit Kar Sujan Anuva Bhattacharjee Mollika Ghosh Sanjida Abedin Jannatul Ferdous Nujhat Zahan Nasrin Akhtar Roll No. 005 O85 095 119 163 167 252 Remarks

Table of content:

Serial no. 01 02 03

Name Acknowledgment Letter of transmittal Introduction to Marketing Information System

Page no. 5 6 7

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Marketing Information system or MKIS of Coca Cola:

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05 06

Conclusion Reference list

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ACKNOWLEDGEMENT

All praises are for the almighty Allah. We are grateful to him in all regards. Here we thank the almighty that he gave us the ability to prepare this report timely. We express our thanks to our teacher Md. Moktar Ali Sir for assigning us a report dealing with the

true events of the real social life and valuation process and providing us a detailed outline. Without his kind supervision, this report would not come in light. Finally, we would like to pay our gratitude to each and everybody who somehow helped us in preparing this report.

Letter of Transmittal

4th May, 2011

Md. Moktar Ali Associate professor

Course teacher

Dept. of Marketing Subject: Submission of Report. Dear Sir, We are very glad to submit you the assignment on Marketing Information System of CocaCola, which was assigned to us. We would like to say that this assignment was helpful for us to know about different problems, aspects & process of corporate market and society that is followed by Coca-Cola. We are very thankful to you for assigning us this fantastic opportunity. This report contains the explanation concerning the company and informations associated with it. It also includes their explanation, and some application regarding it. We tried to synchronize & assemble these based on collected information. We feel that this assignment has enhanced our knowledge on Marketing Information System and its application will be beneficial for us. If required, we would be obliged for further information. Sincerely, Juvenile Group Sec: A, 15th batch

Department of Marketing Faculty of business studies University of Dhaka.

Introduction to Marketing Information System

The globalization of market place and the revolution in technology has increased the customer service requirements. To carry out there requirements managers need high quality information and those information need to be available. And this increase the

need for a synchronize system for managing data which has worked for the establishment of Marketing Information System. Because information has become a critical resource for the organizations competing in todays rapidly evolving business environment (Suidan, 1994). And Marketing Information System helps to manage the wealth of information that provides guidance for decision making.

A Marketing Information System is a management information system which is designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis for supporting the marketing decision making process. Kotler, et al. (2006) defines MKIS as people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers. A Marketing information system basically contains the following components Internal environment

Databases Administrative supports User interfaces Applications software

Objective of Marketing Information System:

Information is critical for effective business operations (Glazer, 1991) and the main objective of Marketing Information System is providing the required information at a right time and in a right form. However Marketing Information System provide advantage to an organization as following Process order faster and with more accuracy Improve customer relationship Allocate budget effectively Standardize customer service quality (www.answers.com)

Types of data:
Two types of data are used in marketing information systemInternal data: According to porters value chain model (Porter and Millar, 1985) internal data can be classified into the following categories Inbound logistics data Production and operation data Outbound logistics data Sales and marketing data

Customer service data

External data: External data can be classified into following categories Business partners Single-source data services Market research project Marketing environment

Decision support system for MKIS:

Information systems researchers and technologists have built and investigated computerized Decision Support System (DSS) for approximately 40 years. There are mainly four broad types of decision support systemReporting and inquiry systems: This helps marketing managers to inspect the records of company activities. Such as exception report includes one or more quantitative indicators of performances and compared to a standard. Analytical models: Analytical models include computer programs which help to predict future problems. Basically three types of analytical models are used in a broad dimension

Forecast models

1. Unconditional forecast models 2. Conditional forecast models

Simulation models Optimization models

Executive support system: Executive support system (ESS) is a combination of analytical models and reporting and inquiry systems. It makes the MKIS system easier. However researchers suggest that marketers prefer simple interfaces with few options (Jiang, Curry, and Pick). Group decision support system: In this system multiple decision makers involved to solve a problem. It also support electronic meetings, group interaction, generates and process information (Gray and Olfman. 1989).

Artificial intelligence in MKIS:

Artificial intelligence is the area of computer science that created machines which can engage on behavior which is considered as human intelligent. It is a system which can mimic human thought, understand speech, beat the best human chess player, and countless other feats never before possible. (www.a-i.com/) The main areas of artificial intelligence are

Intelligent system Knowledge Demons Expert systems Neural networks (www.birdstoppers.com).

However among all of these here we will discuss the two most applied artificial intelligence system-

Expert system:

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Expert system is a computer program that simulates the judgment and behavior of a human. Such a system contains a knowledge base accumulated experience and a set of rules. Todays expert systems deal with domains of narrow specialization. The main uses include Single source data for trends Filter marketing data Develop forecasting model Set sales quotas Train sales personnel(Steinberg and Plank, 1990; Schmitz, Armstrong, and Little, 1990)

Neural Networks:
Neural network is a mathematical model or computational model which is inspired by the functional aspects of biological neural networks. It contains a group of artificial neurons. The most important aspect of neural network is its ability to make decisions based on there past experience.

Steps for developing a Marketing Information System:

Marketing Information System is an ongoing system. It is developed in a very systematic way by a complex process. However the overall process can be categorized in three steps-

Planning:
Planning means creating a guideline for the effective implementation of a Marketing Information System. However in this stage they prepare financially along with the 11

combination of available resources and people (Cox and Goode, 1967; Marshall and Lamotte, 1992). The planning stage of marketing information consist the following tasks create an executive commitment structured the team execute marketing audit set organizations goals define macro specification budget

Technical Development:
This stage actually executes the overall process. In this stage the idea generated from the planning step is implemented for the development of an effective marketing information system. However this stage executes the following activities create the data base system identified required software identified required hardware develop communication network develop system control design user interface construct prototypes of the system

However it is important to note that the technical development is an interactive process, so the integrity among the various department of the organization is must.

Implementation:

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When the developed system is examined as a prototype and succeeded than the system is ready for implementation. However to make the system successful and effective implementation should be done in the following direction1. Phased implementation 2. User training 3. Feedback 4. Modifications However, after the brief description of Marketing Information System we can say that the most important matter is the integration and the proper planning. For the effectiveness of this system the Marketing Information System has become the prerequisite for every organization in the world of competition.

Marketing Information system or MKIS of Coca Cola:

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We all know that no marketing activity can be carried out in isolation. That means there are various forces could be external or internal, controllable or uncontrollable which are working on it. Thus to know which forces are acting on it and its impact the marketer needs to gathering the data through its own resources (computer based) which in terms of marketing we can say he is trying to gather the market information or form a Marketing Information System (MKIS). (www.marketing91.com.) Coca Cola is not an exception. It also has MKIS to get an organized flow of relevant information to guide marketing decision making.

Basic components of Coca Colas MKIS:

There are some basic components by which coca colas MKIS is created. They are discussed below1. Internal Environment: The first component of a MKIS is the internal environment of the organization. And here in the Coca Cola Company the internal environment includes the managers who use the system, the types of decisions they must make, corporate objectives, the cultural, social, political factors that influence its activities and decision making and many other factors. 2. User Interfaces:

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Coca Cola Company has a huge arrangement for the user interfaces. It has a number of computers and equipments for its marketing managers to use MKIS. 3. Databases: Coca Cola has a large database which consist both internal and external data to help its marketing mangers in decision making. 4. Application Software: Application software is the complete, self-contained computer program that performs a specific useful task, other than system maintenance functions. (www.businessdictionary.com) There are a number of program used by Coca Colas marketing managers to access data in database system, to analyze the data and to provide information to guide marketing decisions. 5. Administrative Support: Coca Cola Company is always too much conscious to ensure the administrative support in marketing activities and in maintaining the MKIS.

Data resources of Coca Colas MKIS for gaining competitive advantage:

To gain competitive advantage in the market place organization need to effectively identify potential market, conceive new products, develop appropriate pricing, developing and coordinating distribution system, developing ongoing research program etc. To carry out these activities effectively, marketers need extensive information on

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timely basis (Marshall, 1996). For this reason Coca Cola always tries to get and maintain a huge amount of both internal and external data. Coca Colas internal data resources: Internal data are available from within a companys information system. It is normally not accessible by outside parties without the companys express permission. (Barron's Business Dictionary) To get success by using MKIS Coca Cola always try to maintain updates of internal data that is companys purchases, production, receivable, payable, inventory, sales, marketing etc. Coca Colas external data resources: External data are the data originate outside the organization. To ensure competitive advantage Coca Cola maintain external data resources carefully. It gets that information usually from Business partners Marketing environment data subscription services Single source data services Marketing research etc.

Decisions support systems or DSS of coca-cola:

A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. Actually it is a set of technology which involves in problem solving (Keen, P.G 1978).The components of DSS used by coca-cola are: 16

Reporting & inquiry system:

Reporting and inquiry system means providing data about the occurring issues to the marketing manager. From lowest level to highest system its important (Marshall 1996). Coca-cola Company collects informations about the issues what are occurring in every sectors of the organization. They design their reports on video display terminal. In past the company used printed reports but its very time consuming to produce and distribute so now they use computer based inquiry system .(www.cocacola.com)

Forecast Model:

The coca-cola company use unconditional Forecast model for predicting future events. We know Unconditional forecast models predict future events using historical data but without explicit assumptions about environmental factors (www.cocacola.com). These organizations deal with multiple levels of aggregation and require consistent forecasts at all levels. For instance the company might need a forecast for total sales, as well as a forecast for each brand, each customer segment, and each container. Forecast Revenues for the first two months of the following period: The linear time trend line per quarter is estimated as: t = 4804.5 + 42.917T The monthly equation for net operating revenue becomes: M = 1601.5 + 14.306t Where, M = the forecasted monthly net operating revenue (in millions dollars) t = is a time code for month.

The forecasted net operating revenue for January and February of 2002 are as follows:

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January, 2002: M1 = 1601.5 + 14.306 * (1+3 * 8 + 1) = 1973.456 that is $1,973.456 million. February 2002: M2 = 1601.5 + 14.306 * (1+3 * 8 + 2) = 1987.762 that is $1,987.762 million. The forecasted sales would affect financial leverage by improving (decreasing) the debt to equity ratio, as long as the equity is available. Increased sales should also cause the financial leverage index to increase. If the equity is not available to increase the revenue, Coca-Cola will be under financial stress and the increased revenue may adversely affect the company as a whole. (Atlanta Business News)

Executive support system:

An executive support system is a computer based system intended to facilitate and support the information and decision making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization (Quorum Books, 1991). The managers of coca-cola company use ESS to easily review business performance and explore their implication for future decisions. The company may wish to have access to such indicators such as retailers, customers, price, etc. The company combines reporting and inquiry system on current issues of its activities using this executive support system. (www.slideshare.net.com)

Artificial intelligence and Expert System:

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Artificial Intelligence (AI) is a branch of computer science, which focuses on the development of computer systems to simulate the processes of problem solving and duplicate human brain functions. Expert systems (ES) are a category of programs based on the theory and methods of artificial intelligence.(Marshall,1996) Many large corporations use expert systems in their business. Coca-cola is one of them that use expert system using the knowledge of expert as input to bring more customers into their stores and sell the products they carry. Virtually all retailers with a scanner collect significant amounts of data on customer purchases, including universal product code, number of items, price etc.(communication research).

ES for Prediction and Forecast: The prediction and forecast category of ES enables the company of forecasting of possible outcomes of observable situations. Examples may include the prediction of threat from competitors, finding opportunities, estimation of the demand for coca-cola; Fanta in the global market place, or prediction of the next armed conflict. Also included in this category are weather forecasting, scoring and predictive modeling, risk management and other financial forecasting. (Efrain Turban, jay lie bowitz). When executive support systems were used, the company purpose was to package its data and to provide sales performance or market research statistics for decision makers or top managers. Traditionally these systems were only used to support executive decisions instead of using information for the entire company. Now-a-days, ESS is not only used by senior management buy they are installed at personal computers and workstations on local firms networks. ESS systems are becoming so widespread that employees of coca-

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cola can access this information through their own personal computers. (www.cocacola.com)

Creating Marketing Information System by Coca-cola:

Marketing Information System is not a linear or simple process; its a complex process, considering the process of planning, developing and implementing (www.slideshare.com). Coca -Cola is adapting its uncertain and changing internal environment, because the information needs are often change. Coca Colas MKIS is managed by using user friendly software that creates assets to IS specialist with extensive capabilities with flexibility and formal-ongoing efforts of 3 major stage and these are: Planning Technical development Implementation:

Planning:
Adopting a custom focused business method is a process method to increase the chances of a sustainable and profitable future (WWW.marketing-made-simple.com). The planning of Coca Colas MKIS process ensures the customer is at the centre of key decision. Here, substantial cooperation is needed from all areas of the organization (Cox and Goode, 1976; Marshall Lamotte 1992).

Coca-Colas core aspect of business planning involves 6 stages:

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Securing executive commitment:

The MKIS plan is a structured approach (WWW.marketing-made-simple.com).) That generally involves a small group of high-level managers who deal with very complex, non-routine problems (WWW.Fao.org/docrep). Various departments in the Coca Cola, requires cooperation and access to data is the 1st reason for obtaining executive commitment and 2nd reason to curb the huge expense. Establishing the MKIS team:

In the formal appointment of Coca Cola, the MKIS group that will lead the remainder of the planning effort is the 2nd step (Marshall, 1996). The high-level managers of Coca Cola ensuring clear understanding and cooperation throughout the organization, liaison of perfect sharing of responsibilities is developed by IS and marketing departments team members.

Executing a marketing audit:

A vision of the system is created by the marketing audit (Kotler, Gregor, and Rogers, 1977). Coca Colas marketing audit review the planning (www.Marketingteacher.com) of SWOT analysis of internal environment as well as the external environment and PEST analysis solely for its external environment (www.Marketingteacher.com) Developing organization goals:

Coca Colas goal is realistic and determining its usefulness with time frame, is stressed in a modular fashion.

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Defining macro specification:

Technical requirements of system established by macro specification, based on goals (Cooke, 1993) are defined. Coca Cola ensures it by specifying careful research of existing marketing focus group with prioritizing modular planning. Budgeting:

Resource allotment and responsibilities are assigned to guide technical development and implementation stages (Laudon and Laudon, 1988). Coca Cola avoids its role conflict with the formalization of project and accurate resource allocation.

Technical development stage:

Unlike planning, this is an interactive process not a linear one. Actual program is accomplished and fundamental stage is established by managing Coca Colas MKIS database, with software and hardware, effective communication system integrity with approved user interfaces (Marshall, 1996). This stage involves 8 complex steps:

Creating MKIS database:

Data dictionary in Coca Colas formal documentation have identification and integration of data transformation (Marshall and Lamotte, 1992; Cox and Goode, 1967). It can be used to help create a competitive advantage, and can even substitute for expensive assets (www.slis.indiana.edu/faculty/)

Defining software requirements:

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At the macro specification of Coca Cola a specific logical process of modular approach is focused on specific application software, combining commercial and in-house software (Chandler and Liang, 1990).

Defining hardware requirements:

The creation of suitable conditions to insert beneficially in increasingly competitive market (www.iicd.org/projects/bolivia-aclo) hardware configuration and workstation standardization in Coca-Cola handled rightly.

Developing a communication network:

Point-to-point communication and resource allocation flexibly is running on Coca Colas communication. (www.thecoca-colacompany.com/).

Developing system controls:

To govern Coca Colas system operation, protection of data integrity and user access is considered carefully.

Designing user interfaces:

Satisfaction for decision makers in retrieving relevant data, Coca Cola is using 4GL and graphical menus interfaces (Marshall, 1996)

Constructing prototypes:

This process is easier, cheaper and faster micro version .Needed corrections and developments are more likely to be done at (www.slis.indiana.edu/) Coca Colas model.

Testing system modules:

Finally, MKIS module of Coca Cola is tested by selected marketing users (Marshall, 1996) by comparing results with past approach in a real-world application.

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Implementation:
One of the most important stages of marketing information system is Implementation. It indicates a continuous logical process in which new modules are developed and old modules are modified. To adapt the MKIS to new information opportunities there are basically 4 activities in this stage: Phased implementation. User training. Feedback. Modification. (Marshall, 1996)

Coca-Cola Company also takes some steps to implement its MKIS system. Phased implementation: Basically it means installing, providing documentation for and making available to users which is one part of MKIS. It also helps to adjust with new one with old system. And at one time the older and less functional is removed and new one takes place. (Marshall, 1996) Here the Coca-Cola Company also takes this step like in installation where hardware, communication among servers and networks are needed; it also takes steps like this company of Egypt develops their server environment with 2 IBM power tm 570 servers which run IBM AIX. Here one server hosts the production environment at the main site, and the other hosts the disaster and testing environment at a remote site. When this system is established then Coca-Cola creates user accounts, and the marketing department members of Coca-Cola

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test the communication system by using electronically mail and by linking each workstation. (www.cocacola.com) In documentation: Here after the installation of module, it supplements the data dictionary created in the technical development stage. Coca-Colas documentation process is task oriented because this companys MKIS team takes steps how to sign on the system, how to use email etc. User Training: Another component of implementing MKIS is user training which helps by giving documents to implement MKIS. (Marshall, 1996). Coca-Cola Company comes on site to train personnel on the operation of the server, interaction between the post system and server and training is also given to the operators who operate the device. Users are introduced and trained well to use the equipment of Coca-Cola correctly, and the operation service of Coca-Cola requires 1-2 full days. (Marshall, 1996). Feedback: It is a process where users provide information by using system and it helps to improve performance. It identifies the need and helps to adapt. One advantage is that if this feed back is shared with the system developer, it enhances users satisfaction. (Marshall, 1996). In Coca-Cola Company since in this company new bugs are discovered so the feedback is shared with the system developer. Coca-Cola uses email system, investigation by administrator, suggestion from MKIS team. It can uses 360 degree feedback where performance evaluation is measured with feedback from subordinates, peers, managers to know what and where all employees have to improve. (www.Feedback.com).

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Modification: It indicates any change which may be required after the installation of any system. There are basically 3 types of modification: 1. Modification involves small adjustment to correct bugs. 2. Modification involves correcting significant system errors. 3. Modification involves developing new modules to provide new capabilities. Coca-Cola Company takes some steps for changing some systems. It is spending 10 millions of dollar and change effort such as reengineering and information technology installation. Now it tries to solve 2 problems how to plan for better implementation, how to overcome employee resistance.

Continuing trend in computing:

The information explosion is revolutionizing market price. And it is not over yet. There are basically 3 types of trends like: Continuous improvement in data collection and dissemination. Increasing power of computing to more speed of processing, data storage. Developing intelligent support software to interpret data and usage.(Marshall, 1996) Coca-Cola Company also takes these steps.

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Conclusion:
The MKIS of Coca Cola is helping it in matching with the competitive business world. But in Marketing Information System most important matter is the integration and the proper planning for its success. So I think Coca Cola should give special attention to those.

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