Management Information Systems

Assignment on Frame-work of Information Systems

Introduction A marketing information system (MIS) is intended to bring together disparate items of data into a coherent body of information. An MIS is more than raw data or information suitable for the purposes of decision making. An MIS also provides methods for interpreting the information.

The MIS model consists of four main parts: the internal reporting system, the marketing research system, the marketing intelligence system and the marketing models. Top Management (Strategic): The main responsibilities are: i) Determining the overall goals and objectives of the business.

ii) Dealing with long term plans, policy matters and broad based strategic Planning. iii) Establishing a framework within which the various departments should work. The information used is futuristic and external in nature (political, economic, Social, technological, ecological and legal). It receives the summary from the middle Management and the decision made at this level is non-programmed but strategic. Middle Management (Tactical): The middle management is concerned with elaborating, classifying, and transforming of organizational goals into actions and plans. The information is fed from the top management as well as the supervisory management and is internal in nature. It needs information for short-term planning. Lower level Management (Operation): The supervisory management deals with the operational plans, policies and Procedures for transforming or converting inputs to outputs. It is responsible for day today routine decisions and operations of the organization. The information is received from the middle management and is mostly internal in nature. Decisions at this level are usually routine, structured and programmed. The functions and processes are standardized. IMPORTANCE OF MIS IN MARKETING The marketing function identifies consumer needs and develops products based on such market needs. It matches the product offering with the consumer needs and ensures ready buyers for the products of company. Marketing is a crucial activity for business firms and this function is a major user of information system facilities. Some of the areas of applications of MIS in marketing are as given below:

Order Processing System: Computerized order processing system captures sales orders from customers and processes the orders for further action. It checks the inventory availability, pending orders, production details etc., before accepting the customer order. Computerized sales order processing generates control report daily on orders processed, details of back orders, etc.

Sales Management System: Computerized sales management system uses the data from sales order processing system to generate various sales related reports. This system supports accounts management, direct marketing, sales forecasting and sales Presentations.

Logistics Management: The physical distribution is a major activity of marketing function. It uses computer based OR models to find optimum location of warehouses, shipment routes, quantity to be transported and stocked etc.

Consumer Research: Computerized transaction processing systems capture huge quantity of data about customers and their buying patterns etc. It is used to generate vital information about consumer behavior.

Sales Forecasting: Computer based mathematical and operations research models are used to forecast sales and marketing expenses. Sources of marketing information

Transaction data: The transaction data includes data about marketing activities such as sales data and sales expense data. Marketing research data: This includes data about consumers, product promotion, prices, and packaging distribution agents. Corporate strategy and corporate plans: Corporate strategy and corporate plans based on detailed analysis of the companys capabilities are useful sources of marketing information.

Marketing research agencies: Marketing research agencies regularly collect data about markets and make such database available to companies at a fee Components of a marketing information system A marketing information system (MIS) is intended to bring together disparate items of data into a coherent body of information. An MIS is, as will shortly be seen, more than raw data or information suitable for the purposes of decision making. An MIS also provides methods for interpreting the information the MIS provides. Moreover, as Kotler's1 definition says, an MIS is more than a system of data collection or a set of information technologies:

"A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control". Managerial Roles Mintzberg suggests that managerial activities fall into 3 categories: interpersonal, information processing and decision making. An important interpersonal role is that of figurehead for the organization. Second, a manager acts as a leader, attempting to motivate subordinates. Lastly, managers act as a liaison between various levels of the Organisation and, within each level, among levels of the management team. A second set of managerial roles, termed as informational roles, can be identified. Managers act as the nerve Centre for the organization, receiving the latest, most concrete, most up-todate information and redistributing it to those who need to know. Decision Making Decision making is often seen as the Centre of what managers do something that engages most of a managers time. It is one of the areas that information systems have sought most of all to affect (with mixed success). Decision making can be divided into 3 types: strategic, management control and operations control. Strategic decision making: This level of decision making is concerned with deciding on the objectives, resources and policies of the organization. A major problem at this level of decision making is predicting the future of the organization and its environment, and matching the characteristics of the organization to the environment. This process generally involves a small group of high-level managers who deal with very complex, non-routine problems. For example, some years ago, a medium-sized food manufacturer in an East African country faced strategic decisions concerning its range of pasta products. These products

constituted a sizeable proportion of the company's sales turnover. However, the company was suffering recurrent problems with the poor quality of durum wheat it was able to obtain resulting in a finished product that was too brittle. Management control decisions: Such decisions are concerned with how efficiently and effectively resources are utilized and how well operational units are performing. Management control involves close interaction with those who are carrying out the tasks of the organization; it takes place within the context of broad policies and objectives set out by strategic planners. An example might be where a transporter of agricultural products observes that his/her profits are declining due to a decline in the capacity utilization of his/her two trucks. The manager (in this case the owner) has to decide between several alternative courses of action, including: selling of trucks, increasing promotional activity in an attempt to sell the spare carrying capacity, increasing unit carrying charges to cover the deficit, or seeking to switch to carrying products or produce with a higher unit value where the returns to transport costs may be correspondingly higher. Management control decisions are more tactical than strategic. Operational control decisions: These involve making decisions about carrying out the specific tasks set forth by strategic planners and management. Determining which units or individuals in the organization will carry out the task, establishing criteria of completion and resource utilization, evaluating outputs - all of these tasks involve decisions about operational control. The focus here is on how the enterprises should respond to day-to-day changes in the business environment. In particular, this type of decision making focuses on adaptation of the marketing mix, e.g. how should the firm respond to an increase in the size of a competitor's sales force? Should the product line be extended? Should distributors who sell below a given sales volume be serviced through wholesalers rather than directly, and so on.

Within each of these levels, decision making can be classified as either structured or unstructured. Unstructured decisions are those in which the decision maker must provide insights into the problem definition. They are novel, important, and non-routine, and there is no well-understood procedure for making them. In contrast, structured decisions are repetitive, routine, and involve a definite procedure for handling them so that they do not have to be treated each time as if they were new.

Types of Information Systems

Frame-work of marketing Information systems

Strategic Level: To forecast sales trends of the next five years, and buying habits of the consumers. Tactical level: Tracks monthly sales figures, if sales exceed or fall below expected figures and to design promotional displays for firms products, i.e. to design an attractive brochure. Operational level: To record daily sales figures, i.e. at the cashier machine.

Uses of MIS

Marketing Information System & its Sub-systems Internal reporting systems Marketing Research Systems Marketing Intelligence Systems