Chapter 7 Summary

Understand the purpose of a marketing decision support system (MDSS).

The MDSS is designed to help marketing personnel with decision-making activities. These activities are highly focused on a specific problem and the information required to solve that problem. With proper information, the MDSS allows the manager to identify and evaluate the best course of action in solving market-related problems. Therefore, the primary purpose of the MDSS is to manipulate information to provide problem solutions.

Describe the various information requirements used to design an MDSS.

The bulk of the information contained in the MDSS comes from secondary data. The common forms of information used in the MDSS are environmental information, transactional data, and business intelligence. The primary purpose of the data is to provide managers with the information they need for making immediate marketing-reaction decisions.

Understand the role of transactional data in the MDSS.

Considered the most important information requirement, transactional data provide information resulting from point-of-sale transactions. This information allows managers to track and react to daily sales fluctuations, evaluate the effectiveness of point-of-sale marketing activities, and develop predictive models based on actual product sales data.

Explain the relationship between information processing and the MDSS.

The key elements of the information-processing components of the MDSS are the database, the computer facilities, and the software system. Collectively, these elements must provide the manager or user with the capability to produce timely and accurate reports. The driving force behind report generation is the specific software system employed by the MDSS. The two most common forms of software systems are statistical software systems and managerial function software systems.

Understand the various models used in an MDSS.

There are several different ways to classify MDSS models. Most are static or dynamic, probabilistic or deterministic, or optimizing or suboptimizing. Regardless of the model employed, the objective if to provide the manager with a set of usable outputs. These outputs most commonly include reports, simulations, and queries.

Provide examples of output from an MDSS.

The most common forms of MDSS output are reports, simulations, and queries. The reports are normally generated around the marketing elements and attempt to determine profitability or performance measures on the mix. Simulations are used to produce what-if scenarios. A valuable simulation for many MDSS users is the geographic information system (GIS). Finally, queries enable users to retrieve information from the system without having to have a unique software program.

Discuss the relationship that exists between the decision support system and business intelligence.

Early decision support systems were developed in the 1980s and 1990s as business intelligence tools. In today's technological arena, with vast amounts of consumer and competitive information available, decision support systems and business intelligence programs each serve unique purposes for business. The purpose of a BIP is to gather accurate and reliable information. The groundwork for this is accomplished through a business intelligence audit, which is primarily a review of a business's operations to determine what is actually known about competitors and their operations.