CHAPTER 5: MARKETING

DECISION SUPPORT SYSTEM

 MARKETING DECISION SUPPORT
SYSTEM

 A company-developed database used to analyze company performance

and control marketing activities.

 Coordinate collection of data, systems, tools and techniques with

supporting software and hardware by which an organization gathers and
interprets relevant information from business and environment and turns
it into a basis for marketing action.
 VALUE OF THE MARKETING DECISION
SUPPORT SYSTEM

 To make strategic decision

 Such decisions may involve:
• Changing personnel
• Implementing new pricing policies
• Introducing new products
• Exploring new promotional methods
CRM AND THE MDSS

 CRM- Customer Relationship Management

2 strategic outcomes:
1. The decision support system
2. Business intelligence program
 THE MARKETING DECISION SUPPORT
SYSTEM (MDSS)

 A comprehensive-based system intended for use by particular

marketing personnel at any functional level for the purpose of
solving semi structured problems.
Ex: Sales product or brand management, advertising
 MDSS in contrast to the marketing
information system (MIS)
Characteristics:
1. It focuses on a specific research problem to support individual marketing
personnel
2. It provides information to facilitate a specific decision such as new product
planning, advertising effectiveness, distribution alternative
3. Its primary purpose is to evaluate alternative solutions to marketing related
problems and identify the best course and actions
4. It solves more limited problems such as facilitating the design of sales territories,
evaluating outcomes and new product or brand launches, or even profiling
specific target markets for marketing actions
5. It emphasize twofold information storage and categorization and resultant
solutions
Ex: developed a marketing database for a consumer electronics company to track sales patterns
and sales force productivity
FACTIVITY
• It is specialized MDSS solution that is an example of an off-the-shelf product
• It is designed to control shop floor labor and working process production as well as provide
real-time data collection for an MDSS database that can used to manage supply chain issues.
INFORMATION REQUIREMENTS
 Used in the MDSS provides marketing personnel with a picture of what happened
in the past, so the present and the future can be put in perspective.
ENVIRONMENTAL INFORMATION
-Information pertaining to supplies and distributers
-Information processing unit of the MDSS can be analysed using software that
evaluates all suppliers on the following dimensions.
1. Dollar volume by season and year
2. Growth or shrinkage of annual dollar volume
3. Accuracy of shipping and billing
4. Price terms and allowance
5. Returns and procedures
DISTRIBUTION PARTNERS
Distributors – referred to as service wholesalers , they are business that
secure products from the manufacturer and sell them to the retailers.
Service Wholesaler- are widely used because they offer many advantages
over selling direct or retail.
Hard data related to wholesalers should include:
1. Levels of inventory carried by various wholesalers
2. On time delivery performance
3. Minimum ordering requirements
4. Transportation cost
5. Repairs, allowance and adjustments
6. Level of service (e.g. automatic merchandise replacement, mark-ups
inventory management)
 BUSINESS INTELLIGENCE
 A procedure for collecting daily operational information pertinent to the
company and markets it serves.
 Business intelligence information is usually collected by reading trade
publications, books, and newspapers as well as by talking to customers,
suppliers, wholesalers, and other personnel within the company.

TRANSACTIONAL DATA
 Information resulting from a transaction usually between a consumer and
a retailer.
FIVE TECHNOLOGIES INTERACT TO HELP RESEARCHER
COLLECT

• Bar Coding
• Optical Scanning
• Automatic Replenishment
• Electronic Data Interchange
• Reader Sorters
1. Bar Coding

 A pattern of varied-width bars and spaces that represents a code of

numbers and letters. When decoded through an optical scanning device,
the code points to important information.
 Bar Coding operates in conjunction with optical scanners.
 2. Optical Scanners

 A light-sensitive device that reads bar codes.

 It captures and translates unique bar code numbers into product information and
facilitates data entry into MDSS.

Two scanning techniques:

1. The Universal Product Code (UPC) – generally accepted bar code for the retail
industry. It is a 12-digit number used for merchandise identification,

2. The Shipper Container Marking (SCM) – a bar code that facilitates that
identification and shipping of containers between manufacturers.
 3. Automatic Replenishment System ( ARS)
 A continuous automated system designed to analyze inventory levels,
merchandise order lead times, and forecasted sales.

4. Electronic Data Interchange (EDI)

 A computerized system designed to speed the flow of information and products
from producer to distributor to retailer.

5. Reader-sorter
 A computerized device located at the point of sale that resembles a miniature
automated teller machine (ATM)
 It enables consumers to pay for transactions with credit cards, ATM cards, or
debit cards.
INFORMATION PROCESSING AND THE MDSS
3 key elements:
1. Database
2. The computer facilities
3. The software system
 The computer and the software system serve primary function in the MDSS to
produce reports valuable to the decision maker
The computer and software system of the MDSS should:
 Reflect the needs for the user, not the analyst
 Provide reports for the user within minutes
 Sort and print highly specific report data
 Be easy to read, use and manipulate
 Be custom-made versus prewritten

2 general types of software system for MDSS:

1. Statistical software systems
2. Managerial function software systems
3 managerial function software system
1. Forecasting systems
2. Product/brand management systems
3. Promotional budget systems
The ADBUG system 2 main objectives:
1. To determine the optimum level of advertising expenditures to
achieve a desired level of sales
2. To determine how to change advertising expenditures over time
to maximize profits

GOAL: is to produce information from data in order to facilitate

decisions
MDSS MODELS AND OUTPUT

 When the information contained in the MDSS is categorized and classified

by the software system, the result is some form of output for the decision
maker.
 When the output provides a solution to the problem, it is most likely
generated by a modeling technique.

An MDSS Sales Analysis Output Example

 Series of sales analysis reports produced from accounting and sales
transaction data. The data used in preparing the records are sorted into
various sequences to provide a sales manager with information
describing the firm sales by customers, region, and salesperson.
GEOGRAPHIC INFORMATION SYSTEMS
 Geographic information(GIS) system is the commonly used MDSS simulation
 GIS uses spatial modeling in conjunction with data drawn from the MDSS.
 It enables users to display spatial data organized as map layers
 GIS market areas are analysed to learn where defined demographic
characteristics over-lap.
 Use to examine the geographic parameters to identify regions or locations
based on spatial coincidence of the relevant factors.

ADVANTAGE: Its ability to pose what-if scenarios

Ex. Hilton Corporation
 MDSS and Queries as an Output Resource

QUERY
 It enables the user to retrieve information from the system without
having to use special software.
 The unique feature of MDSS queries is they arise after data are
provided to the analyst, that is, the need to use query operations
arises after the analyst reviews the results of an earlier report.
For Example:

 A loan manager is interested in cross- selling bank services. He requested

a display of customers banking products (e.g., Loans, credit cards, savings
account), which would then be used to formulate detailed queries about
the customers financial information.

 A query enables the analyst( the loan manager) to combine input and
output forms, so that inputs (new bank services to cross-sell ) are always
given in the context of the previous MDSS output( current product use )
Business Intelligence Programs (BIP)

 A formal, continuously evolving process by which a business assesses

the evolution of its industry and capabilities of the current and potential
competitors to develop and maintain a competitive advantage.
 It is an ongoing and Integral component of business’s CRM process.
 The purpose of BIPs is to gather accurate and reliable information.
 When a business has some knowledge about its competitor and its own
BIPs , gathers the BIP data. Based on BIP needs, relevant data is
gathered from the business’s sales force and marketing research staff,
customers, industry periodicals, competitors promotional materials,
analysis of competitors products and annual reports, trade shows, and
distributors.
Tools and Techniques for Gathering BIP Data

1. Governmental Agencies
2. Online Database
3. Company and Investment Community Resources
4. Surveys and Interview
5. Drive-by and On-site Observations
6. Benchmarking
7. Defensive Competitive Intelligence
8. Reverse Engineering
CHAPTER 6:
EXPLORATORY DESIGNS: IN-DEPTH
INTERVIEWS AND FOCUS GROUPS
VALUE OF QUALITATIVE RESEARCH INFORMATION

1. Management quite often is faced with problem situations

where important questions cannot be adequately addressed
or resolved merely with secondary information.
2. Collecting only qualitative data does not ensure management
will fully understand the problem.
2 Basic ways to collect primary
data
1. Observation – to record human behavior
or market phenomena
2. Questioning and Recording – to
capture a person’s attitudes, feelings,
and/or behaviors.
3 types of Research Design

1. Exploratory Research Design

 Used when research objectives focus on gaining background information and
clarifying the research problem to create hypothesis and research problems.
2. Descriptive Research Design
 Used when research objectives emphasize describing and measuring
marketing issues at a particular time.
3. Casual Research Design
 Define causality in the relationship between marketing factors and research
problems as well as testing “if-then” statements about the various issues
being investigated.
QUANTITATIVE RESEARCH METHOD

Research that places heavy emphasis

on using formalized standard questions
and predetermined response options in
questionnaires or surveys administered
to large numbers of respondents.
Goals of quantitative research are to provide
specific facts decision makers can use to;

1. Make accurate predictions about relationships

between market factors and behavior
2. Gain meaningful insights into those
relationships
3. Validate the existing relationships
4. Test various types of hypotheses.
Qualitative Research Method

 Research used in exploratory designs to gain

preliminary insights into decision problems and
opportunities.

 It focuses on the collection of detailed amounts

of primary data from relatively small samples of
subjects by asking questions or observing
behavior.
Questioning techniques in Qualitative
Research

In-depth Interviews
• A formalized process in which a well-trained interviewer
asks a subject a set of semi structured questions in a
face-to-face setting.
• Also referred to as a “depth” or “one-on-one” interview
• In-depth interviewing allows the researcher to collect
both attitudinal and behavioral data from the subject that
spans all time frames (past, present, and future)