SHF2103 MARKETING INFORMATION SYSTEMS

Dr. Huam Hon Tat Email: huam@utm.my Room no.: D05-311 Telephone no.: 07-5531816 Department of Management Faculty of Management & Human Resource Development (FPPSM) Universiti of Teknologi Malaysia

Developing Marketing Information: Internal Records

Objectives:

Importance of internal records. Sources of internal records system. Types of internal records system. Advantages and disadvantages of internal records system.

The Functions of MKIS

Assessing Marketing Information Needs

Developing Marketing Information

Analysing Marketing Information Distributing and using Marketing Information
Assessing Information Needs
Developing & Analysing Information

Internal records

Marketing intelligence

Distributing Information

Decision support

Marketing research

Developing Information

Internal Records System

Marketing Research System Marketing Intelligence System

Internal Records

Marketing Intelligence

Decision Support

Marketing Research

Internal Records System

Internal records system is electronic collections of consumer and market information obtained from data sources within the company network, including accounting, marketing, customer service, and sales departments.

Internal Records System

a.

b.

It is the most basic information system used by marketing managers. It includes the reports on orders, sales, prices, inventory levels, receivables, payables, and so on. Many firms build extensive internal databases, electronic collections of information obtained from data sources within the firm. Marketing managers can readily access and work with information in the database to identify marketing opportunities and problems, plan programs, and evaluate performance.

Internal Records System

Information in this system can come from many sources. The accounting department prepares financial statements and keeps detailed records of sales, costs, and cash flows. Operations reports on production schedules, shipments, and inventories.

Internal Records System

Information in this system can come from many sources. The marketing department furnishes information on customer demographics, psychographics, and buying behavior. The customer service department keeps records of customer satisfaction or service problems. Research studies done for one department may provide useful information for several others.

Internal Records System

Internal databases can be accessed more quickly and cheaply than other information sources, but they also present some problems. Because internal information was collected for other purposes, it may be incomplete or in the wrong form for making marketing decisions. Data ages quickly.

Transaction Processing Systems (TPS) (OBrien & Marakas, 2008)

Cross-functional information systems that process data resulting from the occurrence of business transactions.

Transactions include sales, purchases, deposits, withdrawals, refunds, and payments

Online transaction processing (OLTP) is a realtime system that captures transactions immediately Many firms using Internet, intranets, extranets, etc for online transaction processing to provide superior service to their customers and suppliers. TPS plays a vital role in supporting the operations of an e-business enterprise.

Online Transaction Processing Systems

Syntellects OLTP

Syntellect teams with over 700 cable firms to offer a very popular and very profitable service. First, the viewers can select pay-per-view events by using PHONE or WWW. The order is captured by INTERACTIVE VOICE RESPONSE SYSTEM or WEB SERVER. It is then transported to DATABASE APPLICATION SERVERS. Here, the order is processes, customer and sales databases are updated and approved order is relayed back to video server, which transmit the video of the pay-per-view event to the customer.

The Transaction Processing Cycle

The Transaction Processing Cycle

Data entry - capture of business data (e.g., by point-of-sale terminals using credit card readers, scanning of bar codes or electronic commerce website on Internet. Transaction processing - two ways: Batch processing transaction data are accumulated over a period of time and processes periodically. Real-time processing (on-line processing) data are processes immediately after a transaction occurs.

The Transaction Processing Cycle

Database maintenance databases must be maintained by its transaction processing system, so that they are always correct and up-to-date. Document and report generation produce a variety of documents and reports. Can be in the form of a transaction listing or reports. Inquiry processing users use Internet, intranet, extranet, database management query etc to make inquiries and receive responses concerning results of transaction processing activities. E.g., to check status of a sales order, balance of an account, amount of stick in inventory.

TPS

TPS Examples for a university Registration system, student transcript system, and curriculum class control systems

The order-to-Payment Cycle

Sales representatives, dealers and customers dispatch orders to the firm, the order department then prepares invoices and send copies to various departments. Out-of-stock items are back ordered. Shipped items are accompanied by shipping and billing documents that are sent to various departments.

The order-to-Payment Cycle

Firms today need to perform these steps quickly and accurately. Customers favour those firms that can deliver their goods/services on time. The order-fulfillment department must process these orders quickly. The warehouse must send the goods out as soon as possible. Bills should go out promptly and be paid on time. Many firms today are using Internet and extranets to improve the speed, accuracy and efficiency of the order-to-payment cycle.

Sales Information Systems (Kotler et al., 2006)

Marketing managers need up-to-date reports of their current sales. Computer technology has revolutionized sales representatives job by turning the art of sales into an engineered business process. Armed with new technology, sales rep now have their immediate access to information about their prospects and customers and can give their firms immediate feedback and sales reports.

Advantages and Disadvantage of Internal Databases

Advantages: Can be accessed more quickly Less expensive Disadvantages: Incomplete information Wrong form for decision making Timeliness of information Manager in a functional area does not see how it could help decision makers in other functional areas The information remains under utilised because it is compartmentalised
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Internal Records System

Examples of the internal records that are of immediate value to marketing decisions By comparing orders received with invoices, a firm can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps a firm ascertain whether its stocks are in line with current demand patterns.

Internal Records System Assume that you are a marketing manager for a telecommunication company.

List at least three different sources of internal data. Discuss how these data would help you create services that provide greater customer value and satisfaction.

Internal Records System

Sales data: Sales by territory Sales by customer type Prices and discounts Average size of order by customer, customer type, and geographical area Average sales by salesperson and branch, and region Customer usage and history data: Where they call When they call How often they call How long they talk How long they have been a customer Number and subject of complaints

Internal Records System

Financial data: Would be all the fixed and variable costs of producing, distributing, and marketing the service and associated accessories

The list is endless, but any one of these sources could increase customer value and satisfaction.

Sales data could lead to better/more effective sellinghaving the right selling resources (where and when). Customer usage and history data would assist in achieving better overall service and more appealing billing plans. Financial datalower costs, lower prices.

Internal Records System

Apex Vacuum, a family-owned manufacturer of budget vacuums, has grown exponentially over the last few years. However, they are having difficulty in preparing for future growth. The only information system used at Apex is an antiquated accounting system. The company has one manufacturing plant located in Arkansas, and three warehouses, in Arkansas, Delaware, and California. The Apex sales force is national, and Apex purchases about a third of its vacuum parts and materials from a single overseas supplier. You have been hired to recommend the information systems Apex should implement in order to maintain their competitive edge. However, there is not enough money for a fullblown, cross-functional enterprise application, and you will need to limit the first step to a single functional area or constituency. What will you choose, and why?

Internal Records System

Apex Vacuum, a family-owned manufacturer of budget vacuums, has grown exponentially over the last few years. However, they are having difficulty in preparing for future growth. The only information system used at Apex is an antiquated accounting system. The company has (1) one manufacturing plant located in Arkansas, and three warehouses, in Arkansas, Delaware, and California. The Apex (2) sales force is national, and Apex (3) purchases about a third of its vacuum parts and materials from a single overseas supplier. You have been hired to recommend the information systems Apex should implement in order to maintain their competitive edge. However, there is not enough money for a fullblown, cross-functional enterprise application, and you will need to limit the first step to a single functional area or constituency. What will you choose, and why?

Internal Records System

Transaction processing system (TPS)

A TPS focusing on production and manufacturing to keep production costs low while maintaining quality, and for communicating with other possible vendors. The TPS would later be used to feed MIS and other higher level systems.