Title Page

Topic

Marketing Decision Support

System

Course

Marketing Management

Code

8511

Submitted to

Mam Shazia Arshad

Submitted by

Haroon Zafar

Roll No

AW535094

Contents

iii

Table of Contents
Marketing Decision Support System.........................................................2
What Is a Marketing Decision Support System?.......................................2
Managers needs for decision relevant information:..................................3
Components...............................................................................................4
Database:....................................................................................................4
Reports and Displays.................................................................................5
Marketing Intelligence...............................................................................6
Models.......................................................................................................6
Characteristics............................................................................................7
Case Study.................................................................................................7
Conclusion.................................................................................................9
References..................................................................................................9

Acknowledgments

iv

Acknowledgments

I first of all special thank to Allah with His help all tasks are completed. I express my
warm thanks to Mam Shazia for her support and guidance.I would also like to thank
my parents with their support and prayers i am able to fulfill all tasks.And my friends
and classmates who helped me in searching the data.

Abstract

Abstract
This paper deals with marketing decision support systems (MDSS) in companies. In a
conceptual framework five categories of factors are distinguished that potentially
affect adoption, use, and satisfaction: external environment factors, organizational
factors, task environment factors, user factors and implementation factors.
The factors that determine the adoption of an MDSS are different from the factors
that affect the success of an MDSS, once it has been installed. For adoption, support
from inside the company, communication and knowledge about MDSS are crucial.
For the subsequent success of an MDSS, involvement of the user, sophistication,
adaptability of the system and the possibility of direct interaction with the system are
important. MDSS are primarily adopted to obtain information and not to upgrade
(add value to) existing information. Companies in consumer goods are ahead of
companies in the business-to-business sector, but this difference is likely to decrease
in the future.
The importance of information and efficient information management is steadily
increasing due to the evolution of new technologies and high-capacity storage media
but also because growing market dynamics raise information needs. A marketing
decision support system (MDSS) can be of particular importance as it supports
organizations in collecting, storing, processing, and disseminating information, and in
the decision-making process by providing forecasts and decision models (Little
1979). The following article provides insights into a successful implementation of a
MDSS in tourism. Based on findings on the analysis of the systems protocol files, it
discusses the information needs in tourism management.Tourism management is
making itself to be the part of any countrys economy booster and information
technology is playing its role to take the tourism management to the doors of success.
With the help of marketing decision support system tourism can be grow much higher
and faster than ever.

Introduction

Introduction
An emerging trend in the realm of marketing has been the increased application of
marketing decision support system (MDSS) technology to aid with decision-making
(DM). Developing a sound and robust marketing strategy has never been an easy
task. The success or failure of a companys marketing effort depends on the
interaction of numerous internal and external factors, combined with the knowledge
and intuition of the decision-makers themselves. Marketing DM requires a
comprehensive analysis of environments both inside and outside the firm. It requires
a wide range of strategic information, including hard and soft information, and it
requires managers to deal with issues that involve a high degree of uncertainty,
subjectivity and ambiguity. Marketing also involves managers intuition, judgment,
and personal vision.
These characteristics of marketing decisions present a real challenge to decisionmakers. While managers certainly possess specific strengths and advantages in
handling such decisions, they are often nonetheless limited by their knowledge and
background, a lack of the analytical skills necessary to undertake systematic strategic
analysis, and a lack of time to focus intensively on strategic issues. Given these
barriers, along with the growing complexity and competitiveness of the marketing
environment, the need for tools to assist the marketing decision-maker could not be
greater. The concept of a MDSS addresses this need for DM support.
The earliest traces of the MDSS took shape in the 1960s, as decision-makers started
to develop rudimentary models from which marketing decision could be made.
Nowadays MDSS help decision-makers utilize data and models to solve unstructured
problems based on management science, decision theory, systems science, behavioral
science, computer science and information technology. It is used to improve the
quality and timeliness of marketing decisions by improving the effectiveness of DM.
It focuses on supporting, rather than replacing, managerial judgment, and ultimately,
it is the harmony created between the strategic analysis of the system and the
intuition of the manager that helps achieves a synergy during the DM process. The
MDSS components include the user-system interface subsystem, the database
management system,marketing intelligence and the model base management system.

Marketing Management

Marketing Decision Support System

A marketing decision support system (sometimes abbreviated MKDSS) is a decision
support system for marketing activity. An interactive, flexible computerized
information system that enables managers to obtain and manipulate information as
they are making decisions.
A system used to manipulate a collection of data to interpret and explore potential
business scenarios in order to make management decisions. Marketing decision
support systems (MDSS) are considered by some businesses a key tool in gaining the
edge over competitors. MDSS can be used to assist, rather than supersede, employee
decision makers in the complicated scenarios which are common in marketing.
It consists of information technology, marketing data, systems tools,and modeling
capabilities that enable the system to provide predicted outcomes from different
scenarios and marketing strategies, so answering "what if?" questions.
A MKDSS is used to support the software vendors planning strategy for marketing
products. It can help to identify advantageous levels of pricing, advertising spending,
and advertising copy for the firms products. This helps determines the firms
marketing mix for product software.
It is a coordinated collection of data, systems, and techniques with supporting
software and hardware by which an organization gathers and interprets relevant
information from business and the environment and turns it into a basis for marketing
action.

What Is a Marketing Decision Support System?

A marketing decision support system is a system or method that can be employed to
aid in evaluating possible marketing strategies and ultimately arriving at the decision
considered in the best interests of the company. Sometimes referred to as a MKDSS,
this strategy will pull on a number of resources in order to identify and project the
outcome of several different business scenarios.

Marketing Management

A marketing decision support system (MDSS) is a coordinated collection of data,

systems, and techniques with supporting software and hardware by which an
organization gathers and interprets relevant information from business and the
environment and turns it into a basis for marketing action.
Combines marketing data from diverse sources into a single database, enabling
product managers, sales planners, market researchers, financial analysts, and
production schedulers to share information.

Managers needs for decision relevant information:

Routine comparisons of current performance against past trends on each of the
key measures of effectiveness
Periodic exception reports to assess which sales territories or accounts have not
matched previous years purchases
Special analyses to evaluate the sales impact of particular marketing programs,
and to predict what would happen if changes were mad resources such as the
information technology available to the company, marketing data that is gathered
over a period of time, and even the modeling techniques used to come up with
the projects are all part of this type of system.
The type of data collected for use in a marketing decision support system will vary
slightly, based on the type of goods and services sold by the client, and the
configuration of the markets in which those products are sold. In terms of the market
data that is collected, just about every approach will include gathering data regarding
the cost of advertising using different forms of media, the impact of different unit
prices on the sale of the products themselves, and even ideas on how to structure the
advertising copy that serves as the basis for the campaign. Various types of software
are used to allow easy input of the collected data, and then arrange that data into
useful packets of information that can be applied to a variety of different scenarios.
Using this method, it is possible to predict with a great deal of reliability what would
happen if a particular scenario were chosen and pursued.
One of the major benefits of a marketing decision support system is the ability to
project the outcome of various scenarios before a great deal of money is investing in
the marketing effort. For example, this strategy makes it possible to determine what

Marketing Management

would likely happen if the products were sold at a specific unit price, marketing to
specific consumers, and a certain combination of advertising mediums were used to
reach those consumer markets. If the outcome of one scenario is not quite at the level
desired, tweaking factor such as something about the advertising copy or changing
the mediums used for advertising, or even the pricing may be employed, going
through each scenario until the most attractive approach is identified.
There is no doubt that a marketing decision support system can save a great deal of
time and money. By allowing a company to qualify the advertising strategy in
advance, it is easier to make sound business decisions. In fact, the decision-making
process itself is somewhat simplified, since it is not necessary to manually weed
through a huge amount of data in order to create possible scenarios and follow a
simulation through to the most likely outcome. From this perspective, the marketing
decision support system makes it easier to identify the advantageous ways to move
forward with a campaign, in terms of time, market focus, and cost.

Four Components of MDSS

Database
Reports and Displays
Marketing Intelligence
Models

Database
Today companies organize their information in databasescustomer databases,
product databases, salesperson databasesand then combine data from the different
databases. For example, the customer database will contain every customer's name,
address, past transactions, and even demographics and psychographics (activities,
interests, and opinions) in some instances. Instead of a company sending a mass
"carpet bombing" mailing of a new offer to every customer in its database, it will
score the different customers according to purchase recency, frequency, and monetary
value. It will send the offer only to the highest scoring customers. Besides saving on

Marketing Management

mailing expenses, this will often achieve a double-digit response rate. Companies
warehouse these data and make them easily accessible to decision makers.
Furthermore, by hiring analysts skilled in sophisticated statistical methods, they can
"mine" the data and garner fresh insights into neglected customer segments, recent
customer trends, and other useful information. The customer information can be
cross-tabbed with product and salesperson information to yield still deeper insights.
To manage all the different databases efficiently and effectively, more firms are using
business integration software (see "Marketing Insight: Putting Data to Work with
Business

Integration

Software").

Using its own in-house technology, for example, Wells Fargo has developed the
ability to track and analyze every bank transaction made by its 10 million retail
customerswhether at ATMs, bank branches, or online. When transaction data are
combined with personal information provided by customers, Wells Fargo can come
up with targeted offerings to coincide with a customer's life-changing event. A
database is an organized collection of data. The data are typically organized to model
aspects of reality in a way that supports processes requiring information. For
example, modelling the availability of rooms in hotels in a way that supports finding
a hotel with vacancies.

Reports and Displays

Marketing managers rely on internal reports on orders, sales, prices, costs, inventory
levels, receivables, payables, and so on. By analyzing this information, they can spot
important opportunities and problems.
The Order-to-Payment Cycle
The heart of the internal records system is the order-to-payment cycle. Sales
representatives, dealers, and customers send orders to the firm. The sales department
prepares invoices and transmits copies to various departments. Out-of-stock items are
back ordered. Shipped items are accompanied by shipping and billing documents that
are

sent

to

various

departments.

Today's companies need to perform these steps quickly and accurately. Customers
favor firms that can promise timely delivery. Customers and sales representatives fax
or e-mail their orders. Computerized warehouses quickly fill these orders. The billing

Marketing Management

department sends out invoices as quickly as possible. An increasing number of

companies are using the Internet and extranets to improve the speed, accuracy, and
efficiency of the order-to-payment cycle.
Sales Information Systems
Marketing managers need timely and accurate reports on current sales. Wal-Mart, for
example, knows the sales of each product by store and total each evening.
Companies must carefully interpret the sales data so as not to get the wrong signals.
Technological gadgets are revolutionizing sales information systems and allowing
representatives to have up-to-the-second information. In visiting one of the 10,000
golf shops around the country, sales reps for TaylorMade used to spend up to two
hours counting golf clubs in stock before filling new orders by hand.

Marketing Intelligence
Market intelligence is the information relevant to a companys markets, gathered
and analyzed specifically for the purpose of accurate and confident decision-making
in determining strategy in areas such as market opportunity, market penetration
strategy, and market development.
Business Intelligence refers to skills, processes, technologies, applications and
practices used to support decision making. Business Intelligence often aims to
support better business decision-making and as such can be defined as a decision
support system.
Market intelligence includes gathering of data from the companys external
environment, whereas the Business intelligence process primarily is based on internal
recorded events such as sales, shipments and purchases. The purpose of
incorporating Market Information or intelligence into the Business Intelligence
process is to provide decision makers with a more complete picture of ongoing
corporate performance in a set of given market condition.

Models

Marketing Management

A conceptual model is a model made of the composition of concepts, which are used
to help people know, understand, or simulate a subject the model represents. Some
models are physical objects; for example, a toy model which may be assembled, and
may be made to work like the object it represents.
The term conceptual model may be used to refer to models which are formed after a
conceptualization process in the mind. Conceptual models represent human intentions
or semantics. Conceptualization from observation of physical existence and
conceptual modeling are the necessary means human employ to think and solve
problems. Concepts are used to convey semantics during various natural languages
based communication. Since a concept might map to multiple semantics by itself, an
explicit formalization is usually required for identifying and locating the intended
semantic from several candidates to avoid misunderstandings and confusions in
conceptual models

Characteristics of MDSS
Interactive
Flexible
Discovery oriented
User friendly

Case Study
Unilever
Unilever is one of the worlds largest suppliers of fast moving consumer goods in the
refreshment, foods, home and personal care sectors. With a portfolio of over 400
brands, it has consistently ambitious growth targets. The company has an extensive
annual budget for cutting-edge research and development, and thousands of projects
in its innovation pipeline at any one time. This means that in order to make informed
decisions on how to manage this portfolio, it needs absolute clarity around the risks
and opportunities it faces.

Marketing Management

However, like any large, dynamic organization, complexity has a large impact on
Unilevers decision-making process. Many parties are involved in the process, often
with conflicting values, motivations, perspectives, personalities and power bases.
These organizational complexities are reinforced with analytical complexities such as
the large number of interrelated inputs that must be factored in to the decision, the
high level of uncertainty inherent in early-stage developments and potentially
conflicting decision criteria.

Unilever vision
We help people around the world meet everyday needs for nutrition, hygiene and well
being, with brands that help people look good, feel good and get more out of life.
A Structured Approach to Decision-Making
For business-critical innovation, Unilever recognized the inherent complexity of its
decisions and the need to maintain a dual internal and external focus to prevent
important opportunities and threats from being overlooked. It understood that
incorporating these factors into an effective decision making process would improve
decision quality, facilitate faster decision making and ultimately increase Unilevers
agility in the market place.
The Unilever response was to develop a unique approach known as Decision Making
Under Uncertainty (DMUU). This is a disciplined, methodical and structured
approach to decision-making, with probabilistic analysis at the heart of its logical
reasoning. It combines framing and structuring tools with leading-edge analytical
software - Palisades DecisionTools Suite. The DecisionTools Suite is an integrated
package of seven risk, decision, and data analysis tools that run in Microsoft Excel.
This approach ensures that project teams fully understand the scope of the decision,
that they have the tools and the knowledge to make high-quality decisions, and the
insight to understand the consequences of taking one course of action over another.
Overall, DMUU helps to provide the required clarity, insights and commitment to
action.
Decision Tools Suite Guides Decisions on Innovation
Unilever selected Palisades DecisionTools Suite as the principle analysis software to
support its DMUU process and decision-focused culture due to its flexibility and
ability to do Monte Carlo and decision tree analysis using component products and
PrecisionTree, respectively. Today, the DecisionTools Suite enables Unilever to
develop probabilistic business cases for its biggest innovations, as well as its major
strategic decisions.
DMUU and the use of the DecisionTools Suite is now a standard part of Unilevers
innovation process and probabilistic business cases are required for all big and
complex projects. For example, a typical use for the risk analysis element of the
suite, is in evaluating alternative strategies for a new product launch or a major
capital investment.

Marketing Management

Unilever teams also use PrecisionTree, the decision analysis tool, to evaluate early
stage projects where decisions and uncertainties will occur at various times in the
future. This approach, using decision trees in PrecisionTree, is used to evaluate the
current value of a project and also to understand the risks and benefits of internal
versus external development routes.

Conclusion
This study looked at the MDSS of a company at one moment in time. However,
MDSS develop over time, both as a result of experience with MDSS in companies
and the (fast) development of (data-base management systems, computer and
telecommunication technology, specific software packages, etc). From time to time,
companies will have to renew their MDSS. At this moment some companies already
have their third 'generation' of MDSS, and this process could be followed and
examined over time. Interesting questions are: when does a company decide to renew
its MDSS, are the factors leading to renewal the same as the factors that led to the
adoption of the MDSS in the first place, and do we see an increase in sophistication
of the MDSS of a company over time? To get a picture of these dynamics of MDSS
over time, carrying out observations at the same companies at different moments in
time, with intervals of three to five years
References
en.wikipedia.org
etd.aau.edu.et
www.unilever.pk
should be considered.