MARKETING INFORMATION SYSTEMS1 To understand the proper role of information systems one must examine what managers do and what information they need for decision making. We must also understand how decisions are made and what kinds of decision problems can be supported by formal information systems. One can then determine whether information systems will be valuable tools and how they should be designed. Chapter Objectives This chapter has the purpose of leading the reader towards: • An understanding of the different roles managers play and how marketing information systems can support them in these roles • An appreciation of the different types and levels of marketing decision making • Knowledge of the major components of a marketing information system • An awareness of the often under-utilized internal sources of information available to enterprises • An ability to clearly distinguish between marketing research and marketing intelligence, and • An understanding of the nature of analytical models within marketing information system. Begin Here: http://www.youtube.com/watch?v=8bU6tsscv9c The Functions of Management Clearly, information systems that claim to support managers cannot be built unless one understands what managers do and how they do it. The classical model of what managers do, espoused by writers in the 1920's, such as Henry Fayol, whilst intuitively attractive in itself, is of limited value as an aid to information system design. The classical model identifies the following 5 functions as the parameters of what managers do: 1 Planning 2 Organizing 3 Coordinating 4 Deciding 5 Controlling 1 Taken from http://www.fao.org/docrep/W3241E/w3241e0a.htmSuch a model emphasizes what managers do, but not how they do it, or why. More recently, the stress has been placed upon the behavioral aspects of management decision making. Behavioral models are based on empirical evidence showing that managers are less systematic, less reflective, more reactive and less well organized than the classical model projects managers to be. For instance, behavioral models describe 6 managerial characteristics: • High volume, high speed work • Variety, fragmentation, brevity • Issue preference current, ad hoc, specific • Complex web of interactions, contacts • Strong preference for verbal media. Such behavioral models stress that managers work at an unrelenting pace and at a high level of intensity. This is just as true for managers operating in the developing world as in the developed world. The nature of the pressures may be different but there is no evidence that they are any less intense. The model also emphasizes that the activities of managers is characterized by variety, fragmentation and brevity. There is simply not enough time for managers to get deeply involved in a wide range of issues. The attention of managers increase rapidly from one issue to another, with very little pattern. A problem occurs and all other matters must be dropped until it is solved. Research suggests that a manager's day is characterized by a large number of tasks with only small periods of time devoted to each individual task. Managers prefer speculation, hearsay; gossip in brief, current, up-to-date, although uncertain information. Historical, certain, routine information receives less attention. Managers want to work on issues that are current, specific and ad hoc. Managers are involved in a complex and diverse web of contacts that together act as an information system. They converse with customers, competitors, colleagues, peers, secretaries, government officials, and so forth. In one sense, managers operate a network of contacts throughout the organization and the environment. Several studies have found that managers prefer verbal forms of communication to written forms. Verbal media are perceived to offer greater flexibility, require less effort and bring a faster response. Communication is the work of the manager, and he or she uses whatever tools are available to be an effective communicator. Despite the flood of work, the numerous deadlines, and the random order of crises, it has generally been found that successful managers appear to be able to control their own affairs. To some extent, high-level managers are at the mercy of their subordinates, who bring to their attention crises and activities that must be attended to immediately. Nevertheless, successful managers are those who can control the activities that they choose to get involved in on a day-to-day basis. By developing their own long-term commitments, their own information channels, and their own networks, senior managers can control their personal agendas. Less successful managers tend to be overwhelmed by problems brought to them by subordinates.Managerial Roles Mintzberg suggests that managerial activities fall into 3 categories: interpersonal, information processing and decision making. An important interpersonal role is that of figurehead for the organization. Second, a manager acts as a leader, attempting to motivate subordinates. Lastly, managers act as a liaison between various levels of the organization and, within each level, among levels of the management team. A second set of managerial roles, termed as informational roles, can be identified. Managers act as the nerve center for the organization, receiving the latest, most concrete, most up-to-date information and redistributing it to those who need to know. A more familiar set of managerial roles is that of decisional roles. Managers act as entrepreneurs by initiating new kinds of activities; they handle disturbances arising in the organization; they allocate resources where they are needed in the organization; and they mediate between groups in conflict within the organization. In the area of interpersonal roles, information systems are extremely limited and make only indirect contributions, acting largely as a communications aid in some of the newer office automation and communication-oriented applications. These systems make a much larger contribution in the field of informational roles; large-scale MIS systems, office systems, and professional work stations that can enhance a manager's presentation of information are significant. In the area of decision making, only recently have decision support systems and microcomputer-based systems begun to make important contributions. While information systems have made great contributions to organizations, until