Marketing Information Systems: part 1
Course code: PV250
Dalia Kriksciuniene, PhD
Faculty of Informatics, Lasaris lab., Autumn, 2014

Lecture 1
∞Definitions, functions, requirements for the marketing information systems (MKIS).
∞The careers and users of marketing information,
∞The user’ requirements for the information content, inputs, retrieval and presentation.
∞marketing decision making environment, complexity of rules and variables involved
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•Tools &software (demo): CESIM simulation solutions for multi-stage market modelling games
•Lab work training: assignment for CESIM team simulation sessions
•
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Marketing as a domain area
•Object of interest in marketing information systems- marketing process, its entities and
relations.
•There exist many definitions of marketing- different accents (AMA-American marketing association
defines)
•Marketing is a social process by which individuals an groups obtain what they need and want
through creating, exchanging products and value with others (Kotler, Turner, 1985)
•Keywords:
•Needs, wants, demands
•Products
•Values and satisfaction
•Exchange and transactions
•Markets
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Needs, wants, demands
•Need is a state of felt deprivation of some basic satisfaction
•E.g. food, clothing –things of survival. These needs are not created by society or marketers, they
exist in human biology
•Wants are desires for specific satisfiers of deeper needs.
•They are different is various societies: a person needs food and wants oyster, needs clothing and
wants a Chanel outfit, needs esteem and wants fancy necklace. Wants are continuously reshaped by
social forces and communities (families, schools, church, etc.) Marketing can create wants for the
customers
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Needs, wants, demands
•Demands are wants for specific products that are backed up by an ability and willingness to obtain
them by exchange.
•Wants become demands when backed up by purchasing power.
•Companies have to measure not only how many people want their product but how many would actually
be willing and able to buy it.
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Needs, wants, demands
•These distinctions answer frequent critics for marketing “marketers create needs” or “marketers
get people to buy things they don’t want”.
•Marketers do not create needs- they preexist marketers. E.g. marketers do not create need for
social status.
•Along with other influential forces marketers influence wants. They suggest to consumers or try to
point out how particular product would satisfy need (e.g. BMW car or Parker pen for satisfying need
for social status)
•Marketers try to influence demand by making product attractive, affordable, available. The demand
is highly affected by competition: the want of the customer can be created by one firm but it
becomes converted to the satisfied demand by the other (e.g. due to discount)
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Products
•Broad understanding of product : anything that can be offered to someone to satisfy a need or
want.
•Product as a physical object serves as a vehicle for getting service (e.g. car for riding it).
Services can be fulfilled by others: such as persons, places, activities, organizations, ideas.
• Product covers all features (drivers) that are capable of delivering satisfaction of a want or
need
•Tangible and intangible products. Intangible products cover information and knowledge (tacit
-which is often not documented or explicit-embedded in some format) and patents, technologies,
brands (which can have certificates and can be sold (therefore obtained and exchanged in the
market). Other terms for product: offer, satisfier, resource.
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Values and satisfaction
•How do consumers choose among the products that might satisfy a given need ?
•E.g. how can we travel ? By foot, roller skates, bicycle, car, plane or cruise ship.
•The list makes a choice set.
•According to it we make a product set
•The goal set which we want to satisfy in need for traveling, e.g. speed, cost, ease. Each product
has different capacity to satisfy goals.
•What is the ideal product ? Product space is the rating of products by customer perception how far
is is from ideal. Value (or utility) is greater if product is nearer to ideal
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Exchange and transactions
•Marketing exists when people decide to satisfy needs and wants in way we call exchange.
•Four ways of exchange which can be desired by customer:
•Self production (e.g. relieve hunger by fishing) - no marketing, as there is no interaction
•Coercion (e.g. wrest food from other) – no benefit is offered to other party
•Begging (e.g. approach other)- no tangible offer, maybe except gratitude
•Exchange (offer resource in exchange for good: money, another good, service)- marketing arises
from this approach
•However even in the situations where there is no marketing, the marketing specialists can
introduce it (e.g. computer games created for defeating enemies or robbing resources fulfill the
needs of customer to experience situation of coercion
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Exchange and transactions
•Exchange is the defining concept underlying marketing- the act of obtaining desired product from
someone offering something in return
•Terms for exchange: leave them both better or not worse, that’s why exchange is a value creating
process
•Exchange has to be seen as a process, but not as event (two partied finding each other,
negotiating, moving towards agreement, setting conditions, documenting, defining post-acquisition
services or guarantees)
•If agreement is reached, the transaction occurs.
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Markets- different points of view
•Economist view: market is the place where buyers (ask) and sellers (bid) gather and agree to make
transaction (deal). Price is the main variable.
•Accountants view: registering transactions and incurring costs/incomes/taxes (quantitative
financial information accounting five main resources (financial, human, material, intangible,
information)
•Marketers view: market consists of all potential customers sharing a particular need or want, able
for exchange to satisfy it. Markets are seen as buyers (their groupings, called segments), the
sellers-as industries. They are connected with flows: Communication, Products (goods/services),
Money, Information
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Summary of marketing concepts
•Marketing means human activity that takes place in relation to markets.
•Marketer seeks for acquiring resource from someone and willing to offer something of value in
exchange.
•Marketer is seeking response from other party, and can take a role of seller or buyer.
•The role of information system: to register activities (similar to accounting) and to play role in
creating products, competitive advantage and decision making
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Management information system
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Marketing management
•It is the analysis, planning, implementation and control of programs
•designed to create, build, and maintain beneficial exchanges and relationships with target markets
•for the purpose of achieving organizational objectives
•The organization forms the idea of a desired level of transactions with the target market. It has
a task of influencing the level, timing, composition  of demand according to goals.
•States of demand to cope: negative absent, latent, falling, irregular, full, overfull, unwholesome
demand
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Marketing management
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Marketing orientation
Focus
Means
Ends
Production concept
Mass production lowering costs and price
High production efficiency and wide distribution coverage
Sell what is produced. Leads to impersonality of consumer
Product concept
Consumer favors only products that offer most quality, performance and features
Make good products and improve them over time
Sell what producers “love” cause marketing “myopia” losing sight what customer wants
Selling concept
Product
Selling and promotion
Profits through sales volume
Marketing concept
Meet customer needs
Integrated marketing
Profits through customer satisfaction.
Societal marketing concept
Determine customer needs
Deliver needs fulfillment better than competitors
Preserve and ensure long-run society welfare

Marketing’s role in a company
•Equal function or primary four: marketing, production, finance, personnel
•More important function
•Central major function
•Customer –central function for controlling 4 primary functions
•Customer as controlling, marketing and integrative function in the center
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Marketing’s role in a company
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Marketing theories
•Most prevailing theory is 4P (McCarthy, 1968)- marketing mix  (customer, markets, etc. missing
here).
•Extensions of the 4P theory:
•Kotler (megamarketing) 4+2P
•Booms&Bitner (Service marketing) 4+3P
•Baumgartner (1991) – 15P
•The mix concept was initially developed by Neil Burden (1964) derived from Culliton (1948) :
marketing is a mix of ingredients (12 elements +4 forces) (Product planning, pricing, branding,
channels of distribution, personal selling, advertising, promotions, packaging, display, servicing,
physical handling, fact finding and analysis) + (behavior of : consumers buying, trades’ (ret.wh),
competitors and their position, governmental
•and search for suitable set of ingredients for each transaction with customer.
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4P – marketing mix component system is too brief for its real implementation.
Its real content covers various problem areas:
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Marketing theories- summary
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Development of marketing theories: from mix  to relationships
•Relationship marketing theory (Gronroos1996, Gummesson,1999 and USA “school”.
•Christopher, Payne, Ballantyne (1991) Six markets
•Kotler (1992) Ten players
•Morgan, Hunt (1994) Ten partnerships
•Gummesson 30R :classical relationships (3), special (14), mega (6), nano (7)
•Relationship history of communication with customer leads to future activities including
transactions.
•Relationship processes can be considered as tangible, as they use resources and can be measured by
quantitative indicators. They have life cycle. (Gronroos, 1996).
•4P marketing is implemented by special department, and in RM  all employees ar considered as
“part-time marketers” (Gummesson, 1999)
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Marketing and management processes (functions)
•5 Key Functions of Management
∞Plan
∞Organise
∞Make decisions (Command)
∞Co-ordinate
∞Control
•If the specialist does not perform any of these functions, he cannot be considered as manager.
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Marketing work and careers
•Sales manager
•Sale representative
•Advertising and promotion manager
•Marketing researcher
•Customer service manager
•Product manager
•Market manager
•Marketing vice-president
•Extensive career specifications exist in enterprises
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Marketing work and careers (e.g. certification)
•Identify information and research requirements for business and marketing decisions.
•Manage the acquisition of information and the Marketing Information System (MkIS).
•Contribute information and ideas for business and marketing decisions.
•Create a competitive operational marketing plan appropriate to the organization's context.
•Integrate appropriate marketing mix tools and manage them to achieve the effective implementation
of plans
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Marketing work and careers (e.g.certification)
•Define and use appropriate measures to evaluate the effectiveness of marketing plans and
activities.
•Create an effective communications plan for a specific campaign.
•Manage marketing communications activities.
•Develop and manage support to customers and members of marketing channels.
•Plan a marketing project.
•Manage a team for marketing project or tasks.
•Make recommendations for changes and innovations to the marketing process for value enhancement
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Marketing skills learned by simulation tools: example of SimBrand (Cesim)
•The business simulation game covers marketing skills:
∞product life cycle management,
∞segmentation,
∞positioning,
∞distribution channel investments,
∞advertising budget allocation,
∞after sales services,
∞pricing,
∞sales forecasting,
∞marketing research, competitor analysis,
∞research and development,
∞and financial indicators.
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Marketing skills overview
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Communication barrier between Market (M) and Enterprise (E)
•How M evaluates E ?
•If the E fits to M demands, M participants are aware of and are interested to buy E products,
acquire shares, make career here. The goal is to balance supply and demand, which also ensures
growth of E resources.
•How M reacts to E efforts ?
•M serves all customers and all competitors. M reacts in full complexity of existing
relationships/hidden rules. M learns from E and creates new effects
•How E evaluates M ?
•If E acknowledges suitability of M for its activities, E makes efforts and supports them by its
resources to make customers informed and interested for desired period of activity. E needs
appropriate indicators.
•How E reacts to M ?
•E tries to guess which type of effort makes biggest impact to M. E can affect only part of rules
of M and has only partial info for revealing them.  That makes communication barrier. E needs to
influence indicators
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“Battlefield” for performing marketing tasks
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MkIS as information equivalent of marketing management of the enterprise
•Management information systems have to reflect reality. By looking at the system we should be
aware of structure and dynamics of processes of the entire scope of marketing.
•E.g. accounting system of the enterprise consists of chart of accounts interrelated by double
entry principle.
•What are the components of marketing system, can we consider their entirety as information
equivalent of marketing?
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MkIS and marketing of the enterprise. What entirety we understand as system ?
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Can we see more than any naked eye, or we are wearing pink-lense glasses  for observing real market
and our  own enterprise?

Definitions of MkIS
•MIS may be defined as a set of procedures and methods for the regular, planned collection,
analysis, and presentation of information for use in making marketing decisions(Cox &Good, 1967)
•MkIS comprises all computer and non-computer systems, which assist the marketing function to
operate effectively. MkIS include many systems, which are not generally thought of in marketing
terms, e.g. general ledger or production-planning systems.(O’Connor & Galvin 1997)
•Marketing information systems are people, equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate information to marketing decision makers
(Armstrong & Kotler, 2007)
•.. there are many more authors and definitions..
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Requirements for MkIS by definitions
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MkIS definition summary
•The essence of a modern MkIS is
∞people,who take part in the processes of marketing management
∞by using the most recent achievements of IT.
∞these processes are based on the flow of information,
∞which enables to solve encountered problems
∞and generate adequate marketing decisions.
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MkIS definition summary
∞MkIS definitions echo the management information system, no specific marketing-related features
are presented.
∞The marketing manager is mentioned in the definitions without distinguishing between various types
of activities, marketing tasks or hierarchical level.
∞MkIS is not defined as a general type of system (I-O-F), rather it is composed of computerized and
non-computerized elements assisting marketing management processes.
∞The MkiS structure is not stable, due to changing needs in each stage of marketing processes,
availability of information technologies and data, risk, uncertainty.
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MkIS definition summary
∞The managers become part of group which plans information needs and implementation of MkIS. That
makes MkIS unique in each enterprise.
∞The qualification of managers is related to information quality. Improvement of information
quality characteristics should go in tune with increasing skills.
∞The changing environment for marketing decisions requires flexibility of inclusion required
information sources.
∞It means that the process of creating MkIS can become ongoing, its structure composed in a
flexible way from various subsystems, and corresponds to subjective needs of the managers.
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Types of information needs (classical)
•Third source   - knowledge of marketing manager, consisting of experience, intelligence and wisdom
emanating from ability to merge and comprehend information
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… and many more types of information sources
•Where do we get information?
•Who prepares it to marketing managers ?
•What is the format of knowledge?
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Influence of marketing theories to MkIS
•Marketing is planned according to the 4P, it is implemented by performing different specialized
tasks (market analysis, advertising, sales, customer service, etc.), it is controlled by applying
historical financial indicators, although all marketing activities aim to bring changes in future.
•Relationship marketing suggests describing marketing of the enterprise by its set of relationships
and their dynamics.
•Therefore in contrary to “4P” , the RM can serve as basis for information equivalent of the
enterprise, as it creates, develops, quits R; plans, controls, organizes, makes decisions on R.
R-becomes object for creating its info equivalent.
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MkIS and marketing of the enterprise. What entirety makes the model of MkIS system ?
∞Structure of the model
∞Dynamics of the processes
∞Information describing the processes
∞Evaluation of the performance (measures)
∞Different levels of MkIS representation suggest of its multidimensional origin
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Importance of MkIS concept and model as adequate information equivalent of marketing
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Structure of MkIS model
∞Many authors present their own MkIS model
∞What is the system model in general? What parts does it consist of?
∞What dimensions can be observed in marketing system?
∞Evaluated from system theory perspective, the suggested models can be considered as illustrative
structures.
∞Model should reflect structure and dynamics of the system, ensuring porssibility to transfer
conceptual model to the IS architectural model and implementation by IT.
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The MkIS place in marketing (Kotler)
E:\Payap\Marketing\เนื้อหาวิชา\MKIS\Content\MISPix\New Folder\MKSystem.jpg
Model  : Kotler  P. (2003)

The MkIS model (subsystems)
Picture1
Model  : Kotler  P. (2003)

The MkIS model (McCarthy)
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MKIS (Brandaid model)
•An MKIS (Brandaid model) is made up of input and output subsystems connected by a database
•The Input Subsystems are:
•Transaction processing system
•The marketing research subsystem
•The marketing intelligence  subsystem
•Each output subsystem provides information about four critical elements in the marketing mix:
•The product subsystem
•The place subsystem
•The promotion subsystem
•The price subsystem

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The MkIS Brandaid model (4P)


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MkIS category of functional goal
Author, source
•MkIS for collecting information and marketing research, intelligence, senvironment scanning
Kelley, 1965; Kotler, 2001
•Computer support for marketing information processing, modeling
Kotler, 1985; Proctor, 1991
•Creating marketing information resources for competitive advantage
O’Brien, 1990
•MkIS information support to marketing functions: sales management, advertising, customer
management, etc.
Moriarty and Swartz, 1989
•Information support to marketing management processes, such as planning, decision- making and
control.
Lucey, 1991
•MkIS for needs of marketing management hierarchical levels
Lucey, 1991; O’Brien, 1990
•MkIS supporting specialized functions: data processing, reporting, expert systems, decision
support systems
Sprague and Carlson, 1995
•MkIS specialized for business area of enterprise
Integrated IS provided by firms: Forpost, Nasdaq, Smart Amadeus, Gabriel, Sabre, Sirena, BABS,
•MkIS as inseparable part of IT-enabled marketing functions: database marketing, customer
relationship marketing, etc.
Integrated IS provided by firms:
Oracle, Baan, Peoplesoft, Microstrategy, SAS, SAP

Influence factors to MkIS creation
Factor
Description
Specialization for the business area

Specialization means that MkIS is created for fulfillment and analysis of the operations of
specific business: service, retailing, banking, travel agency or stock exchange. Specialization is
aimed to fully adjust systems to particular set of marketing activities, related to sales
management, customer service, or daily operations of marketing personnel of applied business area.
Integration of information sources of various origin
The information for marketing management is combined from sources originating in the departments of
the enterprise and in its external environment. It can be intentionally collected while conducting
market research as well. The important source of information is the experience and knowledge of
marketing manager, as their work usually involves complex decision- making activities and require
both comprehensive analysis of changing environments and a synthesis of useful information
(Mintzberg, 1994a, 1994b).
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Influence factors to MkIS creation
Factor
Description
Computerization of MkIS
The selection of possibilities for serving information needs of marketing managers is increasing
with the development of information technologies. In most enterprises the computerization tools of
various functionality coexist simultaneously. Surveys reveal that the most widely used computer-
based systems in marketing are general IT tools such as spreadsheets, graphic packages, word
processing, electronic mail, relational database systems and statistic packages.
The advanced IT used for marketing are: data warehousing, OLAP, data mining, fuzzy logics, which
enable to process complicated inquires, search for patterns in data, and handle imprecise decision
rules.
Integration of MkIS subsystems and functions

The axis of integration of MkIS subsystems and functions indicates MkIS scope, which can vary from
the tools, serving separate functions of marketing activities, to the integrated view of marketing
management activities. The integrated systems include planning, decision-making or control
subsystems. The functional tools include customer relationship management, e-procurement operations
along supply chain, e-communication with customers and partners via internet and extranets.
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MkIS classification
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The MkIS model evaluation
•The analysed MkIS can be applied for one or two levels of analysis and only for partial
presentation of situation and dynamics.
•The most advanced systems from the multidimensional point of view are the CRM systems, created for
enterprise relationships, directed to customers. They present possibility to map relationships,
connected with related information created in various functional modules of integrated system (MS
Axapta, Microstrategy, SAP).
•The software for control (e.g.balanced scorecard) is created in several integrated systems
(Axapta, SAP), These parts exist separately and cannot express the marketing processes, situation
and development in enterprise, but present possibility for their conceptual integration in a MkIS
•The new theoretical developments of relationship marketing, knowledge management, balanced
scorecard have major influence for MkIS creation principles. Their integrated use enables the
information processing in three levels- logical, informational and goals- and can serve as basis
for multidimensional MkIS structure
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Decision-making process in MkIS
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What do you look for in the enterprise if you analyse MkIS ? – there’s no standard model
•Eldon Y. Li Marketing Information Systems in the Top U.S. Companies: A Longitudinal Analysis.
Information & Management, 28(1), 1995, 13-31
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IT approach : Business intelligence and analytics tools : no standard model too
•Visualization empowerment
•Creating variables and indicators from available data
•Making analytics for extracting knowledge about their interrelationships and rule
•(Examples)
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Interrelationship of MIS, MkIS and IT concepts
Marketing IS concepts
Management IS creation concepts (O‘Brien, 1990)
 IT concepts (O‘Brien, 1990), Zikmund et al 2003)
1 Integration of functional modules
Management operations processing
Transactional processing
2 Project and campaign
Creating strategic advantage
ERP (enterprise resource planning)
CRM
Analytic applications,
EAI (enterprise application integration), CRM
3 Value chain system
4 Competitive system
5 End-user „ad hoc“ support
6 Support for marketing management processes

7 Marketing intelligence system
8 Multidimensional MkIS
Decision making support (DSS)
Expert systems (ES)
Executive information systems (EIS)
Business intelligence systems (BI)
data warehouses, data mining, OLAP (online analytical processing)
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Interrelationship of MIS, MkIS and IT concepts
•Different concepts can be identified by analysis of functionality and structure of the existing
MkIS models.
•However they all are based on combining different information processing methods implemented in
MkIS functional subsystems and cannot serve the multidimensional origin of information processing
of marketing managers
•The MIS and IT concepts for MkIS implementation describe different perspectives of the same
system.
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Examples of IT roles in marketing
•http://www.esri.com/
•http://www.microstrategy.com/
•http://www.microsoft.com/en-us/dynamics/crm-customer-center/create-or-edit-a-campaign-in-the-crm-m
arketing-work-area.aspx
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Assignment
•Tools &software (demo): CESIM simulation solutions for multi-stage market modelling games
•Lab work training: assignment for CESIM team simulation sessions.
•The game Simbrand
•Game description video: www.cesim.com /resources
•Team access  http://sim.cesim.com/
•User names: Assignment_1.doc
•The simulation: Rinkos modeliavimas (RMOD)
•Timetable for submitting decisions set in the simulation area
•
•
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Literature
•Berry, M.,J.A., Linoff, G.S. (2011), "Data Mining Techniques: For Marketing, Sales, and Customer
Relationship Management", (3rd ed.), Indianapolis: Wiley Publishing, Inc.
•Wood, M., B. (2005). The marketing plan handbook (2nd edition). Upper Saddle River, New Jersey:
Pearson Education Inc. (Marketing Plan Pro 6.0 software embedded)
•Ball, D., A., McCulloch, W., H., Frantz, P., L., Geringer, J., M., Minor, M.,
S.  (2006)  International business. The challenge of global competition. 10th
edition.  McGraw-Hill/ Irwin
•CESIM business modelling games (www.cesim.com)
•Sugar CRM Implementation http://www.optimuscrm.com/index.php?lang=en
•Statsoft: the creators of Statistica  http://www.statsoft.com
•Viscovery Somine http://www.viscovery.net/
•MS Axapta Dyn. http://www.microsoft.com/en-us/dynamics/erp-ax-overview.aspx
•Online scientific databases accessed via library.muni.cz
•Kotler, Ph. Marketing management (any edition)
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