Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTERCHAPTERCHAPTERCHAPTER Marketing Decision Support Systems and Business Intelligence 7-2

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Value of the Marketing Decision Support System  Marketing Decision Support Systems are more cost effective than collecting primary data.  Marketing Decision Support Systems provide decision-makers with the information they need in a more timely and efficient fashion.  Marketing Decision Support Systems can be used by decision-makers at any functional level in the business enterprise.  Marketing Decision Support Systems can be used to “simulate” business decisions, increasing the window of available alternatives and minimizing risk. 7-3

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Characteristics of a Marketing Decision Support System  It is designed for specific research problems to support individual marketing personnel.  It provides information designed to facilitate a specific decision.  Its main purpose is evaluating alternative scenarios and identifying a “best” course of action for a decision- maker.  It is designed to focus on problems that are “narrowly” defined, profiling target markets for marketing actions with precision.  It emphasizes storing and categorizing information and generating solutions management can use in situations characterized by uncertainty. 7-4

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. A Marketing Decision Support System 7-5 Transactional Data Environmental Information Business Intelligence Computer Marketing Research Database Software Model Simulations Specialized Reports Responses to Database Queries

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Information Requirements for an MDSS Environmental Information Channel Information Business Intelligence 7-6

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Environmental Information Returns and procedures Price terms and allowances Timing of deliveries Shipping and billing accuracy Growth of dollar volume on an annual basis Shrinkage of dollar volume on an annual basis Dollar volume broken out by season and/or yearly 7-7

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Distribution Partners Level of service provided by wholesalers Repairs, allowances, and adjustments by wholesalers Costs of transportation Minimum order levels maintained by wholesalers On time delivery schedules Levels of inventory carried by wholesalers 7-8

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Business Intelligence & Transactional Data “Good stuff” can be found in trade publications and journals “Good stuff” can be found by talking to customers “Good stuff” can be found by talking to internal stakeholders “Good stuff” can be found by talking to external publics Transactional data refers to: Bar codes Automatic Replenishment Systems (ARS) Electronic Data Interchange (EDI) Reader-Sorter 7-9

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Guidelines for Hardware and Software 1)The report design should reflect the needs of the decision- makers, not the analysts. 2)The software should be able to provide decision-makers with “user-friendly” reports in minutes. 3)The system must be “intelligent” – able to print highly specific data relevant to a decision problem or opportunity. 4) Data must be easy to digest and implement. 5) The system must be custom-made – a cookie-cutter or pre- written piece of software has but one benefit for a decision- maker… a low price. 7-10

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Types of MDSS Models 1.Static Models 2.Dynamic Models 3.Probability-Driven Models 4.Deterministic Models 5.Optimizing Models 6.Sub optimizing Models 7-11

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. GIS Systems A GIS is a spatial modeling technique. It allows us to capture, encode, edit, analyze, compose and display data in a spatial format organized or “layered” into a map format. 7-12

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. BIP Programs The following eight sources are used to capture data for a business intelligence program: Governmental Agencies Online Databases Company and Investment Community Resources Surveys and Interviews Drive-by and on-site observations Benchmarking Defensive Competitive Intelligence Reverse Engineering 7-13

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Internet & Business Intelligence 7-14a SourceDescription of DataWeb Address International Business Research Provides international business information and links to useful data sources infotoday.com BUSLIB-LCollection of business research articles and discussion groups to business research sites with editorial comments brint.com CI Resource IndexListing of sites by category for finding competitive intelligence sources ciseek.com European Research Gateways Stores 60,000 records of R&D projects currently in operation in Europe cordis.lu/ergo/home

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Internet & Business Intelligence 7-14b SourceDescription of DataWeb Address Intellifacts.com230,000 company profiles and business locators intellifact.com International Business Resource Vast directory of regional trade and trade-related statistics globaledge.com The Internet for Competitive Intelligence Web resources for finding corporate and industry intelligence freeprint.com Internet Intelligence Index 600 intelligence-related sitesfuld.com Powerize.comVersion of Hoover.com, contains over 32 million business filings powerize.com PR Webpress Database Press releases of business and industry over the preceding 90 days prweb.com

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Summary of Learning Objectives  Understand the purpose of a marketing decision support system (MDSS).  Describe the various information requirements used to design an MDSS.  Understand the role of transactional data in the MDSS.  Explain the relationship between information processing and the MDSS.  Understand the various models used in an MDSS.  Provide examples of output from an MDSS.  Discuss the relationship that exists between the decision support system and business intelligence. 7-15