Computer As A Marketing Tool
...rketing strategies. For example, it can help organizations to understand how customers make buying decisions, obtain a clear up-to-date picture of their markets and monitor trends and new market segments. In addition, PIMS can aid decisions relating to product lines to be sold, customer segments to target, channels of distribution, product and pricing strategies and overall effective marketing plans (PIMS Consulting Services, 2000). Examples of organizations who make use of the PIMS database in relation to strategy formation include Honeywell and Hydro Aluminum. Using computers to actually acquire information I.e. use the PIMS database or customer databases is one area. Computers also provide a means of communicating information in both directions both in real time and not. Electronic Data Interchange (EDI) is a means of transferring commercial messages between the likes of manufacturers, suppliers and retailers (Bronzite, 1991). Such things as invoices, stock checks, purchase orders, purchase progress reports and other standardized document forms can be exchanged between computer systems immediately for automatic processing. This system saves money because it’s cheap, paperless and instant. It strengthens relationships between customers and suppliers by providing a good means for useful and vital communication. Users of EDI include banks, they use SWIFT (Society for Worldwide Interbank Financial Telecommunications), a world-wide banking system involving global electronic transfer of information and funds), apparel manufacturers Benetton and Levi Strauss as well as most supermarkets. Tesco is one such supermarket. It uses EDI to communicate with suppliers and warehouses in order to facilitate day to day running (Thompson, 1997). They also use it for such things as gathering sales information, which is a vital part or marketing. In actual fact, Tesco has become somewhat dependent on EDI and has even complimented it with a secondary system called Tesco Information Exchange (TIE). It is used for the same purpose as EDI as well as promotions management and closer sales tracking. A system that can be linked to the above-mentioned EDI is Electronic Point of Sale (EPOS). EPOS has gained wide acceptance among retailers, replacing the conventional tills with a computer (Avon-Net, 2000). Before EPOS, tills were used only for the purpose of handling monetary transactions. Now they can be used for gathering information, running automatic stock replenishment systems and dealing with alternative paymen methods such as credit cards. Large retailers such as supermarkets and other big chains will have their tills networked and probably linked to an EDI system. This can provide management and suppliers with access to relevant and up-to-date marketing information such as buying patterns, demographics, profitability evaluations as well as stock levels (Tesco, 2000). Stock levels, stock movement, buying patterns and such are easier to monitor due to the bar code (a machine-readable code). Checkout systems (EPOS tills) scan the bar code which provides an instant record of sales and stock movements (Thompson, 1997). This information can then be used to monitor stock levels by simple deductions upon sale. Another area relating to EPOS that should be mentioned is the use of the store loyalty card as a means of gathering marketing information. Basically, regular customers are issued with a loyalty card that they hand over at the checkout every time they purchase. According to their purchases, they gain some type of reward such as future discounts. At the same time, the retailer acquires useful, invaluable information such as who is buying what, when and how. This data can then be used to market specific items to specific people to whom they may interest (Alter, 1999). Computers play a big part in information flow in organizations. They are used in order to facilitate the various systems in place by acquiring, monitoring and communicating information and data. In order that information is communicated in an organized and purposeful manner, routine and non-routine processes collectively referred to as an Information System (IS) are devised or employed (Cleary, 1998). There are likely to be various information systems in organizations, particularly large ones, each providing different people/functions with different yet relevant and useful information. Although these systems are generally organizational-wide, they are naturally linked to each organizational department/function and indeed each function can and will have its own information subsystems. For example, specific marketing information can be passed to management for decision making purposes via an organizational-wide system using the marketing department's own subsystems. One such organizational-wide information system is the Management Information System (MIS). This is defined as "the combination of human and computer based resources that results in the collection, storage, retrieval, communication and use of data for the purpose of efficient management of operations and for management planning" (Kelly, 1999). The word 'operations' can easily be replaced with 'marketing' when considering how the system specifically handles marketing information. Basically, a MIS is a system that provides management with information for the running of the organization. It is important to be clear on where information gathered by a MIS comes from. The process of using IT in business is referred to as data processing (DP) of which the resulting systems are referred to as transaction data processing systems (TDPS). TDPS deal with information concerning routine, operational level activities. MIS’s run upon TDPS, extracting information which is most useful (Clarke, 1995). Roger Clarke (1995) states that the MIS is only capable of providing part of management's needs as, being built on TDPS, they have access to only internal, historical data. In order to remedy this, Decision Support Systems (DSS) can be put in place. They help gather external, future-oriented data and collate it with internally sourced data for help in making decisions in semi-structured and unstructured situations (Alter, 1999). A DSS need not be solely organizational-wide, each function can have its own DSS. For example, the Marketing DSS can be used for such things as making various and vital forecasts, planning more effective advertising and evaluating marketing plans amongst other things. Yet another common information system which uses computers is the Executive Information...