Marketing Information

Systems: part 1
Course code: PV250
Dalia Kriksciuniene, PhD
Faculty of Informatics, Lasaris lab.,
ERCIM research program
Autumn, 2013
 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

Tools &software (demo): CESIM simulation

solutions for multi-stage market modelling games
Lab work training: assignment for CESIM team
simulation sessions
2
 Marketing as a domain area
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
and 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 n 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 and converted to the satisfied
demand by the other (e.g. due to discount) 6
 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 are carried by other vehicles such as persons,
places, activities, organizations, ideas. Product covers all
vehicles that are capable of delivering satisfaction of a
want or need
Tangible and intangible products. Inangible products cover
information and knowledge (which is often not
documented) and patents, technologies, brands (which
can have certificates and can be sold-obtained
(exchanged in the market)
7
Other terms for product: offer, satisfier, resource.
 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 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
difference 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 8
 Exchange and transactions

Marketing exists when people decide to satisfy needs and

wants in way we call exchange.
Four ways of exchange:
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 to offer, 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 deeating enemies or robbing resources fulfil the
needs of customer to experience situation of coercion 9
 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 not event (two
partied finding each other, negotiating, moving towards
agreement)
If the agreement is reached, transaction occurs.

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 Markets
Economist view: market is the place where buyers
and sellers gather
Marketers view: market consists of all potential
customers sharing a particular need or want, able for
exchange to satisfy it.
Market are seen as buyers (their groupings), the
sellers-as industry. 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 resource form 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.

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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
Marketing Focus Means Ends
orientation
Production Mass production lowering High production Sell what is
concept costs and price efficiency and wide produced. Leads to
distribution impersonality of
coverage consumer
Product Consumer favors only Make good Sell what producers
concept products that offer most products and “love” cause
quality, performance and improve them over marketing “myopia”
features time losing sight what
customer wants
Selling Product Selling and Profits through
concept promotion sales volume

Marketing Meet customer needs Integrated Profits through

concept marketing customer
satisfaction.
Societal Determine customer Deliver needs Preserve and
marketing needs fulfillment better ensure long-run
concept than competitors society welfare 14
 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

Marketing
Personnel
Personnel Production

Finance Production
Marketing Finance

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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. 17
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

19
 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 in 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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 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 26
“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 ?
Can we see
more than any
naked eye, or we
are wearing
pink-lense
glasses for
observing real
market and our
own enterprise?

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 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

Requirements for MIS creation

MIS quality Requirement to MIS quality: description and author
MIS goal  Gather , sort, distribute, analyse, evaluate pertinent, timely and accurate information (Cox and Good,
1968; McCarthy et.al., 1985; Marshall and LaMotte, 1992; Kelley, 1965)
 Information for making effective decisions to improve planning, implementation and control (Kotler,
2001)
MIS structure  Set of procedures and methods(Cox and Good, 1968)
 Combination of procedures, human and computerised resources (Kotler, 1985; Kelley, 1965;
O’Connor and Galvin, 1999)
 Formal system for creating organized information flow (Lucey, 1991, Marshall and LaMotte,1992)
 Structure is freely composed of functional subsystems (Uhl, 1974)
Sources of information  External, internal, research information (McCarthy et.al, 1989; Kotler, 2001)
processed by MIS  Planning, control, research information (Smith et al., 1968)

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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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 The user interaction with the
Marketing Information System (MkIS)

MkIS
Requests for
information Systems and Procedures

• Collection • Retrieval
Regular and • Analyses and
MARKETING customized reports • Storage •Dissemination
MANAGER

The features of marketing Information

System (MkIS)
 Types of information needs
(classical)

Third source - knowledge of marketing manager, his

experience, intelligence and derived wisdom from ability to
36
merge information
… 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

40
 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)

Model : Kotler P. (2003)

The MkIS model (subsystems)

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 Kelley, 1965; Kotler, 2001
research, intelligence, senvironment scanning

• Computer support for marketing information Kotler, 1985; Proctor, 1991

processing, modeling
• Creating marketing information resources for O’Brien, 1990
competitive advantage
• MkIS information support to marketing functions: Moriarty and Swartz, 1989
sales management, advertising, customer
management, etc.
• Information support to marketing management Lucey, 1991
processes, such as planning, decision- making
and control.
• MkIS for needs of marketing management Lucey, 1991; O’Brien, 1990
hierarchical levels
• MkIS supporting specialized functions: data Sprague and Carlson, 1995
processing, reporting, expert systems, decision
support systems
• 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 Integrated IS provided by firms:
functions: database marketing, customer Oracle, Baan, Peoplesoft, Microstrategy,
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relationship marketing, etc. SAS, SAP
 Influence factors to MkIS creation
Factor Description

Specialization for the Specialization means that MkIS is created for fulfillment
business area 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 The information for marketing management is combined
information sources of from sources originating in the departments of the
various origin 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

Computerizatio The selection of possibilities for serving information needs of

n of MkIS 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 The axis of integration of MkIS subsystems and functions
MkIS indicates MkIS scope, which can vary from the tools, serving
subsystems and separate functions of marketing activities, to the integrated view
functions 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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 Functional scope of marketing information systems

Marketing information supply system Computer support for marketing

information processing and modelling

System for creating competitive

Marketing environment information analysis, advantage
marketing intelligence system
System of System for Creating
strategic increasing premises
information operational for
sources effectiveness innovation

Support system Support system Information support to IT based marketing

MkIS for marketing

activities
Sales
for marketing
management
processes
marketing managers of
different hierarchical
levels
(MkIS as inseparable
part of product, servise,
sales channel)

classification

COMPUTERIZATION
SPECIALIZATION for the business area

management Data base marketing

Poductivity of Planning Operational level
sales personnel Organizing Internet marketing
Analysis of Control Tactical level Internet catalogs
customer needs Decision Marketing in e-
Advertising and making Strategic level commerce
promotion
Marketing of information
products and services
Customer relationship
Specialized management IS for Business-specific, marketing (CRM, eCRM)
marketing marketing- E- supply chain
Analytic processing, oriented IS management
reporting IS E- communication with
Expert systems ES Banking IS suppliers and partners
Marketing modelling IS Tourism IS (B2B)
Executive IS (EIS) Stock exchange IS Internal marketing
Decision support systems (DSS)

INTEGRATION of information sources of various origin

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INTEGRATION of subsystems and functions
 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 51
 Decision-making process in MkIS
Market Reaction to
phenomena Analyses Makes decisions regarding MMR
market
phenomena
MARKETING
Decomposes to MMR MANAGER
Registers decision
MMR MMR
Stores, uses Retrieves information
Multidimensional MIS
Decomposes to MMR

Experience, Marketing relationships

qualification dimension
Structurizes

Intellectual capital Registers information Knowledge dimension

Marketing research information

Balanced scorecard
Enterprise information dimesnion

Market information MMR Scores applied to each MMR

Enterprise strategic
goals expressed by 52
balanced scores
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

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Analysis. Information & Management, 28(1), 1995, 13-31
 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 IT concepts (O‘Brien,
concepts (O‘Brien, 1990) 1990), Zikmund et al 2003)
1 Integration of functional Management operations Transactional processing
modules processing
2 Project and campaign Creating strategic Analytic applications,
3 Value chain system advantage EAI (enterprise application
ERP (enterprise resource integration), CRM
4 Competitive system
planning)
5 End-user „ad hoc“ CRM
support
6 Support for marketing Decision making data warehouses, data
management processes support (DSS) mining, OLAP (online
Expert systems (ES) analytical processing)
7 Marketing intelligence Executive information
system systems (EIS)
Business intelligence
8 Multidimensional MkIS systems (BI)

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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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 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/
The simulation: Rinkos modeliavimas (RMOD)
Six teams
Timetable for submitting decisions is in the simulation
area
Completion time – Nov.1

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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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