INTELLIGENT MARKETING INFORMATION SYSTEMS:

COMPUTERIZED INTELLIGENCE FOR MARKETING DECISION MAKING

Chandra S. Amaravadi, Subhashish Samaddar and Siddhartha Dutta
Intelligent marketing information systems offer a way for marketing managers to share knowledge and expertise
Introduction
The presence of international competition and the
opening up of protected international markets such
as the Soviet bloc, China and India emphasize the
need for effective marketing strategies. The
successful companies in this environment will be
those which can sell standardized products at
lower prices in global markets !evitt, "#$%&.
Such a strateg' re(uires a centrall' coordinated
marketing team. It also implies the need for an
instantaneous and transparent flow of information
between ten points of sale )oS& and the decision
makers and the sharing of e*pertise between
decision+makers in different regional markets
,iggins et al. "##"&. Information from markets
has assumed greater importance as a strategic
corporate asset and organizations cannot afford to
be slow in collecting and processing this
information. Technological and marketing
innovations such as universal product code -)C&
scanners are reducing traditional barriers such as
the time taken for data entr', the cost of collecting
market information and the time taken to process
these huge volumes of information Customer needs
car be met more effectivel' with the assistance of
technolog' .c/enna, "##"&. 0or e*ample, 0rito+
!a' has established a decision support s'stem to
handle problems created b' an e*panding product
line such as slow growth of profit margins
increasing competitive pressures and problems in
product monitoring and cost control. .arketing
managers are more open to information
technologies such as electronic data interchange
1DI&, decision support s'stems, and advanced
database s'stems, motivated b' the need to remain
competitive and the need to manage information
resources Carl'le, "#$$&.
The combination of marketing information,
computer technolog' and changing managerial
consciousness for time and cost+effectiveness
2e would like to acknowledge the comments b'
professors 3olf ,ackmann, 4im /enn' and Caroline
Tripp at 2estern Illinois -niversit'. This pro5ect was
funded in part b' a grant from the State 0arm Insurance
Compan'. 2e are grateful to our sponsors.
forms a d'namic s'stem known as marketing
information s'stems ./IS& Schmidt, "##%&. The
utilization of ./IS resources is crucial to the
success of an organization and should be an
integral part of the strategic planning process
3ockart and .orton, "#$6&. In this article, we
introduce intelligent ./IS as a decision+making
aid for managers. -nlike an ./IS. an I./IS
addresses the need to share marketing e*pertise in
a competitive marketing environment. It makes use
of artificial intelligence technolog' to represent
and process assorted marketing knowledge. As an
introduction to I./IS, we will first discuss ./IS
and its limitations.
Key shortcomings of MKIS
The concept of an ./IS to process and suppl'
information to marketing personnel has been e*tant
for some time now Co* and 7ood, "#89&. The
general s'stem elements for an' ./IS include a
data ac(uisition s'stem, database management
s'stem, graphical and statistical anal'sis tools,
model base, directories specific data
elements:information classification schemes& and
retrieval s'stems ;arabba, "#$%&. According to
one stud', over three+fourths of the 0ortune ",<<<
firms utilize ./IS for decision making .c!eod
and 3ogers, "#$=&. ,owever, these s'stems do
little more than process information mechanicall'
and presumabl' at considerable e*pense ;essen,
"##%> Schmidt, "##%&. The large volumes of
information implied b' such s'stems do not serve
management needs and can overwhelm and
confuse potential users. Another stud' in fact
showed thatmorganizations rel' on their salesforce
for informal feedback rather than on their formal
s'stems 1vans and Schlacter, "#$=&. The article
cited the comple*it' of present s'stems as a factor
in reducing their effectiveness. S'stems with
natural language capabilities and filtering
capabilities would undoubtedl' contribute towards
more effective usage of ../IS. ;ut in order to
serve management?s needs, s'stems re(uire a
deeper under standing of marketing issues.
There have been attempts at enhancing ./IS with
decision support and e*pert capabilities. A
marketing decision support s'stem ./DSS& is a
co+ordinated collection of data, s'stems, tools and
techni(ues with supporting software and hardware
!ittle, "#$6&. 0or e*ample, @;enema*@ is a
./DSS based on ;rien Stafford and Criss'
.ossman models and is used to optimize product
features:benefits with target audience
characteristics 7reen et al., "#$%&. The ;rien
Stafford model has subs'stems for each ingredient
of the marketing mi*, namel' product planning and
development, pricing, channel:distribution and
promotion strategies ;rien and Stafford. "#8$&.
The Criss' .ossman model shows how marketing+
mi* subs'stems assist marketers in addressing
ma5or planning (uestions Criss' and .ossrnan,
"#99&. Current literature suggests that there are
./DSS applicatiors for separate marketing mi*
subs'stems although the' do not refer to ./DSS,
per se. A ma5or limitation of ./DSS is that the'
rel' on limited (uantitative models .c!eod,
"##<&. ;eing (uantitativel' oriented, ./DS
cannot handle marketing situations where complete
information is not available. Since its problem+
solving area is traditionall' more limited than
./IS it is also unable to provide responses in
various marketing mi*es. An integrated marketing+
mi* model has alwa's been elusive Schmidt,
"##%&. ./IS with e*pert s'stem capabilities have
also been limited.
1*pert s'stems 1S& are a branch of artificial
intelligence concerned with capturing the e*pertise
of human e*perts with thumb+rules of the sortA Bf
situation A then action ;@. The' can provide
conclusions:recommendations for various
situations and have built+in e*planation facilities to
e*plain how the' arrived at their conclusions
/irsh, "##C&. Schwoerer and 0rappa "#$8&
suggested the use of 1S in new product
development, media planning and cop' evaluation.
/astiel "#$9& proposed using 1S in evaluating
consumer and industrial promotion evaluations for
direct mail:telemarketing situations. The 1S
approach overcomes the (uantitative limitation of
./DSS, 'et it has its own limitations. 0or
e*ample, @innovator@ is an 0S that can assess the
success potential of new products in the financial
services industr' and provide a go:no go:re+
evaluate decision to the user )roctor, "##"&.
,owever, the s'stem has problems in knowledge
ac(uisition and knowledge representationA for
e*ample the attribute weights are fi*ed and so the
s'stem?s fle*ibilit' to respond to different
situations is limited. 1S cannot be developed for
semistructured problems, such as new product
screening, owing to a shortage of e*perts with
proven records Durkin, "##6&. Since knowledge in
an e*pert s'stem is in the form of rules, onl' well+
defined situations, which lend themselves to rules,
can be modelled. 1S are aimed at one problem and
cannot function outside their domain area It is also
difficult to e*tract knowledge e*cept is the form of
a diagnosis, or in the form of reasoning:
e*planation or as rules. !astl', it is difficult to
develop and maintain 1S because of the
interdependence between rules and the procedural
step+b'+step& nature of the knowledge ;arr et al.,
"#$"&.
THE DISTINGUISHING FEATURE OF
IMKIS IS ITS KNOWLEDGE BASE
The e*tent to which e*pert s'stems or decision
support s'stems can support management is
therefore debatable. .arketing situations re(uire
integrated models owing to interdependencies in
modem business environments which ./DSS are
unable to provide. The' re(uire representation of
@soft@, i.e. non+(uantitative situations Durkin,
"##6&. 1S are not effective because of their
philosoph' of being aimed for a single use and
their inabilit' ?to function outside their area. 2e
propose the concept of intelligent ./IS I./IS&
as a method of supporting marketing decision
making. It is an e*tension of the ./IS+./DSS
concept in that it uses techni(ues of knowledge
representation from the field of artificial
intelligence. An I./IS has much the same
capabilities as an ./IS+./DSS. It provides
marketing personnel with access to online
databases and various t'pes of reports for decision
making such as product performance, market
segment sales promotion, distribution, product mi*
positioning, competition, etc. The database and
reports are based on considering I./IS as part of
an e*isting marketing s'stem. The ./DSS
capabilities are geared towards dealing with
semistructured problems with the help of built+in
models for customer profile anal'sis, sales
forecasting, budgeting, order processing, pricing
decisions, competitive anal'sis, salesforce
anal'sis, inventor' control, etc. ,igb' and 0arah,
"##"& The distinguishing feature of I./IS is,
however, its knowledge base. In general, the
knowledge base contains knowledge about various
aspects of marketing. 0or e*ample, )epsiCo
C
markets @Allsport@, a new product, as a sport drink
using celebrities like Sha(uille D? Eeal for national
network television advertisements during the
Eational ;asketball Association E;A& pla'offs.
At the same time, it uses vending machines and
retail outlets for national distribution. This
knowledge is encoded in the s'stem using an
appropriate representation scheme. The ./IS
elements such as databases and reports address
routine information re(uirements, the ./DSS
aspect handles routine decisions, while the
knowledge+based aspect handles situations
re(uiring knowledge, e*perience. If the essential
aspects of marketing situations are captured in a
knowledge base, it would serve as a powerful
decision aid b' enabling e*pertise to be accessed
freel'.
Framework for IMKIS
.arketing is an ongoing process in which
decisions are made and the results of these
decisions are monitored continuousl'. .arketing
managers have to correct deviations from plans as
well as change plans when market conditions
change /otler, "#$$> !evitt, "#$%&. Carr'ing out
these actions re(uires information about the market
and its characteristics, such as information about
competition. prospective customers and
performance in each segment. This should be
reflected in the I./IS design, specificall' the
database and reports. .arketing managers also
obtain information from product management
groups about their customers and product
segments. ;ased on this information, the' can plan
for domestic and international markets. The' have
to take mm consideration issues of product
positioning, pricing, promotion which includes
advertising& and distribution in their strategic plans
owing to the strong interrelationship among these
groups. At the same time, marketing managers
have to monitor the department costs with respect
to the allocated budget. 0or an I./IS to be
effective, these relationships must be reflected in
its design. 2e will illustrate such relationships
with the help of a case stud' of )epsiCo, Inc.
adapted from Thompson and Strickland?s "##%&,
case number "$ + the details of the case can be
found in the Appendi*&A
)epsiCo s a diversified firm in the soft drink
beverages, concentrates and s'rups& snack foods
and restaurant full service, deliver' and carr'+out&
business segments. It en5o's a tradition of success
based on its cost controls, innovative advertising
aggressive promotion and distribution power. It
entered the "##<s faced with increased competition
for market share from its competitors through ad
wars, new product introductions and price
discounts. 0aced with strict competition, and the
need to remain the best consumer products
compan', )epsiCo is resorting to intensive
advertisements and sales promotions, new product
introductions and cost cuts while strengthening its
distribution networks. It is also attempting to
transfer e*pertise from its successful segments like
0rito+!a' and )epsi Cola to other segments of the
corporation. In the past, C1D 2a'ne Callowa'
himself a 0rito+!a' alumnus& has emphasized
rotating management personnel from 0rito+!a' to
other business units. ,owever. incumbent
management personnel take time to ad5ust to new
organization cultures and na' not en5o' as much
support as in their previous positions.
0igure " illustrates the various groups:sources with
which the marketing manager has to interact.
These include online databases, domestic planning,
promotion, products :price management, public
information, international planning, distribution,
and cost management. !et us consider these in the
conte*t of the e*ample of )epsiCo promoting its
Allsport soft drink in the isotonic beverage market
sports+drink market&. In such situations, marketing
managers have to identif' various distribution
channels so that the product reaches the customers.
It implies consideration of the impact of promotion
on the distribution sector. The cost+efficienc' of
promotions has to be evaluated on the basis of
some benchmark e.g. previous promotion histor'&.
This shows the impact of the cost management
group on the marketing manager?s decision.
,owever, consumer goods cannot be promoted
unless the' are produced, which brings in the
involvement of an interfunctional team of
manufacturing, (ualit' control, engineering,
research and development, test marketers and
pricing strategists. 0inall'. the marketing manager
has to provide ade(uate public information about
new products to financial institutions, for e*ample,
so that investors are aware of how their mone' is
being invested. The advantage of promoting this
product in international markets, for e*ample in
tropical countries, can also be considered b'
marketing managers as a part of a long+term
strateg'.
Thus there are eight ma5or groups within an
organization which impact on marketing decisions>
online databases, domestic and international
planning, product:price management, promotion,
%
public information. distribution and cost
management.
Figure 1. IMKIS relationships
Online databases
Domestic planning
Promotion
Product/price management
Public information
International planning
Distribution
Cost management
Intelligent mareting
information s!stems
"o# to pro$ide immediate
conter%information against false accusations
lie s!ringes in Diet%Pepsi case&
"o# to replicate the success of
Pepsi's Me(ican mareting in
other )atin *mericn countries&
"o# efficient #ould the snac%food
channel be in distributing Pepsi soft
drins in +urope&
"o# cost%efficient are the
promotions%distributions of Pepsi
products in global marets&
Ke!#ord, *sia and drin mi(
"o# to get information on research
#ors about *sian drin%mi( maret&
"o# to increase sales of Pepsi
products in the recession%hit
stagnant domestic maret&
"o# to position *llsport against
-atorade and Po#erade in the
isotonic be$erages maret&
"o# should Pepsi increase its
sales $olume b! discount pricing
or b! increasing its product lines&
A marketing manager should therefore consider
these interrelationships before making strategic
decisions Dickson, "##6&. If these are reflected in
the I./IS the' are included in @database@ and
@librar'@ components& it can assist in the
successful assimilation of knowledge among the
different segments of an organization. 0irms such
as )epsiCo can easil' transfer such knowledge
from succeFthi" segments of the compan' to the
newer segments.
An architecture for intelligent MKIS
0igure C shows the essential elements of the
proposed I./IS and the manner in which the'
interact with one another. The librar' and database
components reflect the framework discussed in the
preceding section.
Input system
The input s'stem collects data from the internal
and e*ternal environments. The incoming data
from the internal environment such as point+of+sale
information. inventor'+warehouse reports,
purchase, shipment and sales orders, etc. are stored
in the database. Sometimes, this information is
available online through electronic data
interchange. As shown in 0igure %, the input
s'stem for )epsiCo includes transaction
information from all of its product segments such
as )epsi, )izza ,ut, Taco ;ell, /entuck' 0ried
Chicken, 0rito+!a', etc. In addition, sales
information from its international operations is also
a part of its input s'stem. The ./DSS uses the
database to carr' out anal'sis. Data received from
the e*ternal environment, such as industr' reports,
new research reports, news about competition,
stock markets, government policies, etc., through
online databases are screened through a filter and
electronicall' sent to the appropriate personnel
Figure .. *rchitecture for IMKIS
Information
from internal
en$ironment
MKDSS
Intelligent s!stem
Inference engine
Kno#ledge base
Models
Measurements
Mareting manager
International
planning
)ibrar!
Product mi(
Pricing
Promotion
Distribution
Maret research
Maret intelligence
Maret strategies
+n$ironment
Input s!stem
Information
from e(ternal
en$ironment
International
planning
Distribution
Database
Sales
Product
Customer
Competition
Promotion
Distribution
Maret
/eports
Output s!stem
Filter
Figure 0. Input s!stem
IS%*
PepsiCo
International
segments
/estaurant
segment
Snac%food
segment
Soft%drin
segment
Pepsi
Cola
Diet%Pepsi
Mountain
De#
1e#
products
Diet Mountain
De#
Slice
Diet Slice
*llsport
Iced
2ea
Sun
Chips
2aco
products
/uffles
)a!'s
Cheetos
Fritos
Doritos
1e#
products
Pacific
/im
2aco 3ell
Pi44a "ut
Kentuc! Fried
Chicen
Canada
)atin
*merica
Caribbean
+urope
"*S%*
Ke!,
Connectors
Filter
6
A filter is a mechanism that distinguishes relevant
information from irrelevant information .alone et
al., l#$9&, It screens and accepts relevant
information while ignoring irrelevant information.
The relevance of incoming information is
identified from the needs of management.
7enerall' the information needs of management
are based on its goal structures such as increasing
sales, market share, etc. Amaravadi and /umar,
"##6&. /e'words are identified for various levels
of management based on such goal structures.
Incoming F and classified under different sections
and sent to relevant personnel in the form of
electronic mail messages .alone et al., "#$9&. 0or
)epsiCo, information pertaining to competitors
such as Coca+Cola Co. soft+drink segment&,
Church?s:)ope'e?s 0ried Chicken chicken
segment&, Domino?s )izza and !ittle Caesar?s
pizza segment&, Chi Chi?s .e*ican segment&, and
;orden and )rocter G 7amble snack+food
segment& is incorporated as ke'words into the
s'stem. Also included is information from
government agencies such as the 1nvironmental
)rotection Agenc', 0ederal Trade Commission,
-nited States Department of Commerce, etc.>
international agencies such as the 7ATT, 2orld
;ank, etc.> and news about consumer interests,
tastes, lifest'les, entertainment events, etc. 0or
e*ample, managers can use @CIS7@ contract for
international sale of goods&, @1urope@ and @drink
mi*@ as ke'words to scan new CIS7 regulations
on )epsiCo?s soft+drink segment in 1urope.
Library
The importance, usage and popularit' of the
different classes of reports re(uires maintaining an
active database of machine+processable reports in
the librar'. The automated librarian stores reports
filed with various government and financial
institutions, and significant news and internal
reports from various meetings. Appropriate
classification schemes are used se that the' can be
retrieved easil'. The librar' can be (ueried for
information regarding new measurement
techni(ues or models relevant to marketing
anal'sts who might select and customize them to
their own needs. This can enable rapid access and
transfer of information whenever re(uired.
Triggers are used tH transfer automaticall'
periodic reports to different personnel both within
and outside the organization at definite time
intervals. At )epsiCo, periodic reports from soft+
drink:snack+fool segments and dail' reports from
the restaurant business segment can be
automaticall' maintained, updated and forwarded
to designated personnel for management control.
=
Marketing decision support system
As alread' stated, ./DSS is a coordinated
collection of data, s'stem, tools and techni(ues
with supporting software and hardware for making
marketing decisions !illis and .cIvor, "#$6&.
.anagers interact with the s'stem in a
(uestion:answer mode and information obtained
from such sessions and from e*ternal databases is
anal'zed with various t'pes of models to arrive at
decision recmmendations )roctor, "##"&. The
s'stem can support @what if@ t'pe anal'sis to allow
managers to change interactivel' model parameters
b' a trial and error process. The s'stem can draw
on te*tual information from the databases and
displa' (uantitative results with graphical and
descriptive interpretations. 0or )epsiCo, ./DSS
will probabl' use product+mi* with distribution
models> industrial salesforce transaction and
revenue gain forecasting models> product cost
optimization and pricing models> market customer,
promotion and channel anal'sis models> market
share change, simulations and interactive models,
to name a few.
Output system
.anagers can interact with the s'stem through a
terminal screen, to review reports and pose (ueries.
These (ueries can be conventional database (ueries
such as what are the sales in the .idwest region
for the last (uarterI@, or (ueries to the knowledge
base such as @what are some of the advertising
strategies used b' 0rito+!a' in the pastI@ As
alread' stated, marketing decisions re(uire
interactive sessions, facilitated through a terminal
with advanced displa' capabilities and a rapid
response time.
Intelligent system
The intelligent s'stem consists of a knowledge
base and an inference engine. The knowledge base
contains facts and knowledge about the firm?s
goals and strategies In general, knowledge in a
knowledge base is represented in the form of rules,
frames or semantic networks ;ench+Capon,
"##<&. The rule+based scheme represents
knowledge in the form of a series of @if+then@
condition+action statements. The scheme is
infle*ible owing to the fait that rules are
interdependent and therefore difficult to modif'.
The frame+based scheme uses a record+like
structure to capture properties of ob5ects and their
relationship to other ob5ects. 1ach frame represents
knowledge about ob5ects with @slots@ or attributes.
Slots are filled with values. e.g. a car frame would
have, among other things, slots for @t'pe@ and
@manufacturer@. 0or a 0ord Thunderbird, these
would have the values of @Sports coupJ@ and
@0ord@, respectivel'. The frame+based scheme is
suitable for declarative knowledge + knowledge
that is primaril' factual in nature. The semantic
network is a collection of nodes that are connected
b' links to relate ob5ects. The links correspond to
slots in the frame+based scheme. Continuing with
the car e*ample to illustrate a semantic net, the
nodes would be @car@, @0ord@ and @Sports coupJ@,
with @manufacturer@ and @t'pe@ as links. The
problem faced b' the anal'st is to convert
fragmented strategic knowledge into usable,
machine+processable knowledge. In this regard, the
semantic network has an advantage stemming from
its associative nature. It associates ob5ects together
in much the same wa' as humans do ;ench+
Capon, F##<&. 2e favour using this approach,
since marketing strategies are characterized b'
relationships and interdependencies more than
an'thing else.
The inference engine uses the knowledge and
processes it to draw conclusions. 2hen knowledge
is represented with a semantic network, the
inferencing process involves traversing the
network to discover relationships. 0or e*ample, to
continue with the car e*ample, if the user were to
ask, @who manufactures a Sports+coupeI@, we
would first identif' the @Sports coupJ@ node and
see if it has @manufacturer@ as its attribute. In this
case, it does not, so we need to trace the links of
@Sports coupJ@ node to see if it has an' @owner@
nodes and see if that node has @manufacturer@ as a
link t'pe. It turns out that @Sports coupJ@ does
have an owner node, @car@, and it has
@manufacturer@ as an attribute link t'pe&. 2e can
now draw the conclusion that 0ord manufactures
Sports coupJs. Inferencing in a network can
become complicated, especiall' if the link t'pes
are unrestricted. In the work presented here, we
demonstrate our knowledge base b' using onl'
four link t'pes. ;etween two ob5ects A and ;, the
link t'pes are e*plained as followsA
@IS+A@ + A is a t'pe of ; for e*ample, sports car
a t'pe of car&>
@,AS+A@ + A has a propert':characteristic, ;
for e*ample, car has a characteristic of speed&>
@C+T@ + A contributes to ; for e*ample, options
contribute to the price of a car&>
@-+T@ + A uses techni(ue:strateg' ; for
e*ample, the power transmission in the car uses
an automatic s'stem&.
8
These restricted link t'pes impose a structure on
the network, which facilitates inferencing. The
choice of link t'pes is a critical decision on the
part of the anal'st, reflecting his:her skill and
intuition in structuring assorted knowledge gleaned
from interviewing marketing managers. In the ne*t
section. we will illustrate the knowledge base and
e*plain the t'pe of interferences that can be drawn
from it.
An illustration of the knowledge
base
As pointed out, the knowledge base is developed
using the semantic network scheme restricted to
the four link t'pes. There are, however, two node
t'pesA goal nodes representing management?s goals
such as profitabilit'> productivit', market share,
etc., and nodes representing variables such as
advertising, testing, etc. -sing this method, we
developed the knowledge structure for )epsiCo
and its holdings based on published reports from
the trade literature. This is illustrated in 0igure 6.
0or e*ample, the article, @2h' ,3 is turning to
outsourcing@ see Appendi*, note C<& pointed out
that 0rito+!a', among other companies, used
outsourcing of emplo'ee hiring to improve
efficienc' and to reduce costs. 0rom this and ether
articles, we derived the knowledge that @cost
reduction@ was an ob5ective and one of the
techni(ues used b' )epsiCo to achieve it was
through @outsourcing@. In the figure, @reduce costs@
is a goal node with a link to @outsourcing@, one of
the factors contributing toe it. Dther factors
contributing to cost reduction used b' )epsiCo
include @forward integration@ and @la'offs@. These
are also shown as nodes with @C+T@ links
connecting to the goal node, @reduce costs@.
Karious t'pes of (uestions can be posed to the
s'stem concerning management?s goals and
strategies, factors contributing to these and the
techni(ues used to accomplish them. 2e will
illustrate these three t'pes of (ueries using the
knowledge structure in 0igure 6>
"& 2hat are management?s goalsI To answer this
(uer', the s'stem searches for the goal nodes,
identified with darker ovals in the semantic
network as followsA
improve productivit'>
increase sales>
reduce costs.
C& 2hat are some strategies to improve
productivit'I ,ere the s'stem searches the
@productivit'@ node and identifies factors
which contribute to it, b' tracing all its @C+T@
links. 0or the )epsiCo case, there are three
variables connected to the @productivit'.? node
with @C+T@ linksA
reduce costs>
use information technolog'>
improve training.
%& 2hat are some techni(ues of advertisingI ,ere
the s'stem searches the node @advertising@,
and identifies the methods used for it b'
tracing all its @-+T@ links uses
techni(ue:strateg'&. 0or the )epsiCo case,
these areA
9
use celebrities>
support social causes,
advertise on ma5or events
The knowledge base illustrated in 0igure 6 is onl'
partial, but can easil' be e*panded to incorporate
ether aspects of )epsiCo?s strateg'. )ractical
implementations of I./IS will be based on in+
house corporate knowledge. The ke' strength of
the approach is that assorted knowledge is
converted to a usable form using onl' a limited
number of link t'pes. The semantic network is
intuitive and can serve as a communication tool
between managers and anal'sts. It lends itself well
to the strategic decision+making process b'
providing knowledge on strategies and goals.
Similar knowledge bases can be developed to
anal'ze competitor activities.
Figure 5. Kno#ledge structure
Note ,
)in t!pes
C%2, Contribute to
IS%*., Is a t!pe of
6%2 6ses techni7ues/strateg!/method
"*S%*, Factor has a characteristic
Profits
)a!offs
Outsource
hiring
2raining
Information
technolog!
Distribution
For#ard
integration
*d$ertising
Percei$ed $alue
Seasonal
$ariation
Promotion
Price cuts
Coupons
Feedbac
Fre7uenc!
Celebrities
Support
causess
Ma8or e$ents
/ansom testing
1e# product
Demographic
preferences
3arcode chec
Metal detect
9eight chec
:ualit!
Seal chec
Product
Price
C%2
C%2 C%2
C%2
C%2
C%2
C%2
C%2
C%2
C%2
C%2
6%2
6%2
6%2
6%2
6%2 6%2
6%2
6%2
"*S%*
"*S%*
"*S%*
"*S%*
"*S%*
"*S%*
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Implantation of intelligent MKIS
I./IS supersedes conventional ./IS s'stems. It
provides traditional ./IS reporting and librar'
facilities. It can filter information from online
databases based on ke'words and automaticall'
inform managers about new developments, This
increases the relevance of incoming information
and reduces information overload to marketing
managers. Triggers can be programmed to act
when certain trends are detected, for e*ample, if
sales fall below a certain level or if a competitor
announces a new product. Threats and
opportunities from the environment can be
identified in this manner. The s'stem uses
traditional ./DSS capabilities to anal'ze
historical sales data from the product database to
identif' which product is in what phase of product
life c'cle. The knowledge base distinguishes
I./TS from conventional technologies. It enables
marketing managers to incorporate e*pertise and
5udgment into the s'stem in a manner that enables
it to be freel' (ueried:modified or shared b' other
managers. -nlike an ./DSS, it can still provide
assistance under environments of partial
information. This is fre(uentl' the case in
marketing because information about competitors,
markets, etc. is often not complete. 0or e*ample
we were able to develop the knowledge structure
illustrated in 0igure 6 despite not having complete
knowledge about )epsiCo. If a marketing s'stem is
alread' in place then the onl' other component to
be developed is the knowledge base. Developing a
knowledge base re(uires skilled anal'sts and
managers who can articulate their strategies. The
development and maintenance of the knowledge
base must be carefull' managed 7reco and
,ogue, "##<&. S'stem securit' is a ma5or issue
since the knowledge base represents a blueprint of
the organization?s strateg' and could be vulnerable
to theft or sabotage. S'stem access must therefore
be carefull' monitored and controlled.
The advantages of a @well+oiled@ conceptuall'
well+designed& marketing s'stem are numerous. It
can provide the firm with competitive advantage
while simultaneousl' reducing costs of manual
information collection and information processing.
It will be a valuable tool for promoting and sharing
organizational learning and assisting in transferring
this (uickl' to other areas of the organization that
need it.
Conclusion
I./IS has the potential to address some of the
pressing concerns facing marketers toda'. It could
help in anal'zing product features with customer
data, evaluating channel and pricing options,
creating and testing promotion plans, gaining
instant feedback on concepts and plans, and
moving marketing plans rapidl' into production.
The knowledge+base component of the I./IS
enables marketing e*pertise to be accessed and
shared easil'. .arketing managers should
seriousl' consider the potential of interfacing
artificial intelligence with conventional ./IS in
order to have a s'stem that supports their strategic
decision making.
WE WILL EVENTUALLY MOVE
TOWARDS A PAPERLESS SOCIETY
As technologies proliferate, the future of I./IS
will become more e*citing. The current push
towards the information superhighwa' and its
implementation presents opportunities for direct
marketing and impersonal selling This will help
marketers to customize their products and enable
them to receive almost immediate online feedback
about an' product promotion or change in channel
effectiveness. A marketing manager can optimize
sales presentations and business travel schedules.
Kirtual realit' can be used for sales presentations
and customer negotiations. The user+friendliness of
voice+activated and handwriting+recognition
s'stems can help marketing managers to interact
better with computer s'stem 2ith the increasing
usage of electronic pa'ments, we will eventuall'
move towards a paperless societ' in which real+
time decisions and actions will be a necessit'. It
implies greater reliance on I./IS s'stems An
organization can be
at a competitive advantage if it responds to, and
e*ploits, these developments.
#
eferences and further readings
Amaravadi, C.S. and /umar, E./. "##6&,
@Drganizational perspectives on 1IS design@,
working paper, 2estern Illinois -niversit',
.acomb, I!.
;arabba, K). "#"""&, @Steel a*es for Stone Age men@,
.arketing and the Eew
Information:Communication Technologies, ,arvard
;usiness School 9=th Anniversar' Collo(uium, C8+
C# 4ul', ,arvard ;usiness School, ;oston, .A.
;arr, A., Cohen, ).3. and 0eigenbaum, 1.A. "#$"&, The
,andbook of Artificial Intelligence, Addison+
2esle', 3eading, .A.
;ench+Capon, T.4... "##<&, /nowledge
3epresentationA An Approach to Artificial
Intelligence, Academic )ress !imited. San Diego,
CA.
;essen, 4. "##%&, 3iding the marketing information
wave@, ,arvard ;usiness 3eview,
September:Dctober, pp. "=<+8<.
;rien, 3.,. and Stafford, 4.1. "#8$&, @.arketing
information s'stemsA a new dimension for
marketing research@, 4ournal of .arketing,
Autumn, pp. "#+C%.
Carl'le, 3.1. "#$$&, @.anaging information s'stems in
multinationals@, Datamation, .arch, pp. =6+8<.
Co*, D.0, and 7ood, 3.1. "#89&, @,ow to build a
marketing information s'stem@, ,arvard ;usiness
3eview, Kol. 6= Eo. %. pp. "6=+=6.
Criss', 2.4.1. and .ossman, 0.,. "#99&, @.atri*
models for marketing planningA an update and
e*pansion@, .S- ;usiness Topics, Autumn, pp. "9+
C8.
Curr', ;., .outinho, !. and Davies, 0. "##C&,
@Constructing a knowledge base for a marketing
e*pert s'stem@, .arketing Intelligence G )lanning,
Kol. "<, Eo. "", pp. "C+"<.
Dickson, ). 3. "##6&, .arketing .anagement, The
Dr'den )ress, Drlando, 0!.
Durkin, 4. "##6&, 1*pert S'stemsA Design and
Development, .acmillan, Eew Lork, EL.
1isenhart, T. "##<&, @Computer+aided marketingA after
ten 'ears of marketing decision support s'stems,
where?s the pa'offI@, ;usiness .arketing, 4une. pp.
68+=".
1vans, /.3. and Schlacter, 4.!. "#$=&, @The role of
sales managers and salespeople in marketing
information s'stems@, 4ournal of )ersonal Selling
and Sales .anagement, Eovember, pp. 6#+=$.
0rancis, ;. "#$#&, 0rito la's a new IS bet@, Datamation,
"= 0ebruar', pp. 9=+$.
7reco, A. and ,ogue, 4. "##<&, @Developing marketing
decision support s'stems in consumer goods firms@,
4ournal of Consumer .arketing, 2inter, pp. ==+86.
7reen, ).1., 7oldberg, S..., .aha5an, K. and /edia,
)./. "#$%&, @A decision support s'stem for
developing retail promotional strateg'@, 4ournal of
3etailing, Autumn, pp. ""8+6%.
,igb', .. and 0arah, ;. "##"&, @The status of
marketing information s'stems, decision support
s'stems and e*pert s'stems in the marketing
function of -S firms@, 4ournal of Information and
.anagement, Kol. C<, pp. C#.%=.
,iggins, !.0., .cint're, S.C. and 3aine, C.7. "##"&,
@Design of 7lobal .arketing Information
S'stems@, 4ournal of ;usiness and Industrial
.arketing, Summer+Autumn, pp. 6#+=$.
Source A Marketing Intelligence & Planning, Kol.
"%, Eo. C, "##=. pp. 6+"%
.C; -niversit' )ress !imited, <C8%+6=<%.
3eproduced with permission of the cop'right
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