Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

Chapter 4

Applications of Information Systems in

Marketing
Personal Tutor Study Notes • Mktg 3041

Section 1: The Key Types of Information Systems

Think of a company like a building with different floors. Each floor has different people doing
different jobs — and each floor uses a different type of information system.

1. Transaction Processing Systems (TPS)

What is it?
TPS is the most basic system. It handles the small, everyday tasks that happen over and over
again — like recording a sale, processing a payment, or updating inventory.

Simple Example
When you go to a supermarket and buy something, the cashier scans your items. The system
instantly logs what you bought, removes it from the stock list, and records your payment. That's a
TPS doing its job — fast and accurate.
• Key strengths: Speed + Accuracy — no human errors, no delays

2. Decision Support Systems (DSS)

What is it?
Sometimes managers face tough decisions with lots of options. DSS helps them think it through by
combining data and showing different possible outcomes.

Simple Example
Imagine a delivery company trying to figure out the cheapest route. The DSS looks at fuel prices,
road conditions, delivery times, and truck availability — then helps the manager choose the best
option.
💡 DSS doesn't make the decision for you. It just gives you the tools and data to make a
smarter choice yourself.

3. Executive Information Systems (EIS) / Executive Support Systems (ESS)

What is it?
This is for the top bosses — CEOs, presidents, directors. They don't need to see every tiny detail.
They need the big picture.

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

Simple Example
A company president opens their laptop and sees a clean dashboard showing: 'Region A is
profitable. Region B is struggling. Market X is growing fast.' That's an EIS — giving leaders a quick,
visual overview of how the whole company is doing.
💡 Instead of long reports, EIS shows colorful dashboards with summaries, trends, and risk
alerts.

Section 2: Business Information Systems (BIS)

What is BIS?
It's a set of connected parts that collect, process, store, and share information to help a business
make decisions and run smoothly. Think of BIS as the nervous system of a business — it connects
everything and keeps information flowing.
BIS is NOT just the IT department. It's the combination of three things:
• Technology (computers, software)
• People (employees, managers)
• Business Processes (the rules and steps people follow)

The Five-Component Model

Every information system — from a tiny coffee shop to Amazon — is built on these 5 parts:

Component What It Means Example

Hardware Physical devices Servers, phones, laptops
Software Instructions/programs SAP, Excel, apps
Data Raw facts Customer names, prices
Procedures Rules people follow How to process a return
People The humans using it You, your manager

💡 People are listed as the most critical — and most unpredictable — part!

The Information Hierarchy

Different levels of staff use different systems:

System Who Uses It What It Does Example

TPS Workers/Supervisors Records daily transactions POS at a store
MIS Middle Managers Monthly performance reports Sales growth report

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

System Who Uses It What It Does Example

DSS Senior Managers What-if scenario modeling Pricing a new product
ESS C-Suite/Executives Big picture trends Global market dashboard

Key Strategic Benefits of BIS

• Operational Excellence — Do things faster and cheaper (e.g., automated inventory)
• Customer Intimacy — Know what customers want before they ask (e.g., Netflix
recommendations)
• Improved Decision Making — Replace gut feelings with real data
• Survival — In 2026, going digital is no longer a choice. It's a must.

Modern Trends in BIS

• Cloud Computing — Store and run everything online, pay for what you use
• AI & Machine Learning — Systems that don't just show data, they predict what will happen
next
• Cybersecurity — As systems connect more, protecting data becomes a core business job
• Blockchain — Creates records that can't be faked, useful for tracking supply chains

Section 3: More Types of Information Systems

4. Enterprise Resource Planning (ERP)
ERP is like the 'super system' that connects all other systems in one place — accounting, HR,
inventory, purchasing, everything. Without ERP, different departments might use different data,
causing confusion. ERP gives everyone the same information.

Example
A large factory uses one ERP system to track employee schedules, machine maintenance, and
supplier payments — all in one platform.

5. Customer Relationship Management (CRM)

CRM helps businesses keep track of everything about their customers — what they bought, what
they complained about, what they like.

Example
An online store uses CRM to recommend products based on your past browsing, send you
personalized discount emails, and make sure the support team already knows your history when
you call.
💡 CRM = treating every customer like the business knows them personally.

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

6. Supply Chain Management (SCM)

SCM manages the journey of a product — from the factory all the way to the customer's hands.

Example
An electronics company uses SCM to track shipments from overseas, check parts availability,
manage suppliers, and plan delivery to stores.
• Benefits: Fewer delays, lower costs, better forecasting, smoother delivery

7. Knowledge Management Systems (KMS)

KMS captures and stores the knowledge and experience that exists inside a company, so it doesn't
get lost when someone leaves.

Example
A consulting firm stores all its past case studies, templates, and solutions in a KMS. So when a new
project starts, the team doesn't start from zero — they look at what worked before.

Section 4: Management Information Systems (MIS) in Depth

MIS takes the huge amount of raw data from daily operations and turns it into useful summaries for
managers. Think of MIS as a translator — it converts boring piles of data into clear, useful reports.
• Primary Goal: Effectiveness and efficiency
• Key Outputs: Summary reports, exception reports (what's going wrong), and trend analysis
• Decision Type: Structured — like 'Do we have enough inventory for next month?'

Section 5: Accounting Information Systems (AIS)

AIS tracks every single financial transaction in the business — sales, payments, assets, everything
money-related.

Core Modules
• General Ledger — The master record of all money movements
• Accounts Payable/Receivable — Who does the company owe? Who owes the company?
• Fixed Asset Management — Tracking expensive items like buildings or machinery
• Auditing & Compliance — Making sure the company follows financial laws
💡 AIS doesn't just count money — it protects the company from fraud and keeps records
ready for tax authorities or investors at any time.

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

Section 6: Human Resource Information Systems (HRIS)

HRIS manages everything about the company's employees — hiring, payroll, training, performance.
In 2026, HRIS has advanced to even predict which employees might quit soon!

Key Capabilities
• Recruitment (ATS) — Tracks job applicants from application to hiring
• Payroll & Benefits — Automatically calculates salaries, taxes, and insurance
• Training & Development — Tracks employee certifications and learning progress
• Performance Management — Handles employee reviews and feedback digitally

Section 7: Manufacturing Information Systems

These systems control the physical production of goods — connecting digital orders with real
factory machines.

Key Components
• MRP (Material Requirements Planning) — Calculates exactly what raw materials are
needed and when
• MES (Manufacturing Execution System) — Monitors and controls production on the factory
floor in real time
• Quality Control — Uses sensors and AI to catch defective products before they leave the
factory

How All Systems Feed Into ERP

System Input Output

AIS Invoices, Sales Financial Statements
HRIS Employee Hours Payroll, Performance Scores
Manufacturing Sales Orders Finished Goods, Inventory Levels
MIS Data from all above Strategic Dashboards for Managers

Section 8: Marketing Information Systems (MkIS)

A Marketing Information System is a structured framework that collects data from many sources,
combines them in one place, and uses that information to make better marketing decisions.

It answers questions like:

• Who are our target customers?
• What trends are happening in our industry?

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

• How well are our marketing campaigns performing?

Key Benefits of MkIS

1. Informed Decision-Making
Instead of guessing, marketers use real data to build strategies. This reduces risk and improves
results.

2. Understanding the Audience

MkIS helps businesses deeply understand their customers — their behavior, preferences, and what
competitors are doing.

3. Competitive Advantage
With MkIS, companies can spot market trends early and position their products before competitors
do.

4. Resource Optimization
Marketing money is limited. MkIS shows which campaigns are working, so budgets are spent wisely
— no waste.

5. Improved Customer Satisfaction

By analyzing purchase history and feedback, businesses can personalize their service and build
long-term loyalty.

6. Tracking Past Relationships

MkIS acts as a history book — it records past interactions with customers and suppliers, helping
learn from both successes and mistakes.

Section 9: Core Components of MkIS

1. Internal Records
Data that already exists inside the company:
• Sales data (what sold, how much revenue)
• Customer profiles (who they are, what they buy)
• Financial records (budgets, profits)
• Inventory levels (what's in stock)

2. Marketing Intelligence
Information gathered from outside the company:
• What competitors are doing
• New industry trends
• Economic changes (inflation, currency shifts)

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

3. Marketing Research
Going deeper to understand customers:
• Primary Research — Surveys, interviews, focus groups (you collect it yourself)
• Secondary Research — Industry reports, government data, competitor studies (already
exists)

4. Data Warehousing
A central storage hub where all data is organized and kept, supporting both historical and real-time
analysis.

5. Information Output
The final step — turning data into something useful:
• Dashboards — Visual KPI displays
• Reports — Detailed analysis documents
• Visualizations — Charts, graphs, infographics

Section 10: Types of Data in MkIS

Data Type What It Is Example

Primary Data You collected it directly Survey results
Secondary Data Already existed somewhere Industry reports
Quantitative Data Numbers Sales figures, website traffic
Qualitative Data Words/feelings Customer feedback, reviews

Section 11: Why Centralized Data is So Important

Centralized data means all your data from all departments lives in ONE place, not scattered across
different systems.

Benefits of Centralized Data

• Improved Accuracy — One central system means one reliable truth, no contradictions
• Better Decision-Making — Real-time access to everything means marketers can react fast
to new trends

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

• Streamlined Collaboration — Everyone works from the same data, so teams communicate
better

Better Customer Experience Through Centralized Data

• Personalized Engagement — Full customer profiles allow tailored campaigns
• Faster Response Times — Real-time data means quicker answers to customer needs
• Consistency Across Touchpoints — Whether online or on the phone, customers get the
same information
• Proactive Service — Systems predict when a customer needs help before they even ask

💡 Centralized data isn't just a technical feature — it's a strategic necessity for modern
marketing.

📝 REVISION SUMMARY
Most Important Takeaways

1. The 4 Main System Types by Level

TPS (workers) → MIS (middle managers) → DSS (senior managers) → ESS (executives)

2. The 5 Components of Any Information System

Hardware, Software, Data, Procedures, People

3. Specialized Systems to Know

• ERP — Connects everything into one platform
• CRM — Manages customer relationships
• SCM — Manages the supply chain
• KMS — Manages organizational knowledge
• HRIS — Manages employees
• AIS — Manages finances

4. Marketing Information System (MkIS) — 5 Components

Internal Records → Marketing Intelligence → Marketing Research → Data Warehousing →
Information Output

5. Types of Data
Primary vs Secondary, Quantitative vs Qualitative

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Chapter 4: Applications of Information Systems in Marketing Marketing Information Systems — Mktg 3041

6. Centralized Data
= Accuracy + Speed + Consistency + Better Customer Experience

7. Modern Trends
Cloud Computing, AI/ML, Cybersecurity, Blockchain

8. The Biggest Benefit of MkIS

It turns raw data into actionable marketing decisions — replacing guesswork with real insight.

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