1994/01 The Evolution of Decision Support Systems in Consumer Goods Marketing

1st Jan 1994

Authors

David Ing

Abstract

The transactional efficiency of delivering goods to the consumer has been aided by the falling cost of computing through the 1980s. PC-based Point-of-Sale (POS) systems have become a standard for retailers, enabling improved customer service through speedier checkout times and better inventory estimates in the stores. Manufacturers routinely use hand-held terminals to record shipments made to distribution centers, or directly onto the retail floor. Operational-level systems can mechanically perform tasks such as replenishment, (i.e. automated item-level reordering), but often do not fully capture the dynamics of today's changing markets. At the tactical level, retail buyers and manufacturers' brand managers struggle to distill macro trends from the multitude of marketing activities which simultaneously occur. The frequency and number of promotions has skyrocketed; competitive positions change with the rapid introduction and withdrawal of new products; consumer segments are constantly being redefined and remapped. "Overnight ratings", "ad hoc analysis", and the "zero-sum game" for market share set the stage for "instant answers" and compression of the planning cycle. In this environment, Marketing Decision Support Systems (MDSSs) need to be more than the eyes and ears of the marketplace; they must provide the marketing intelligence on which future actions may be based.

The capability for "conversational" dialogues with 1970s time-sharing mainframe systems created a vision that business professionals, without the assistance of a programmer, might be able to view and manipulate corporate data through the use of a Decision Support System (DSS). This chapter will review some early concepts of MDSSs (Marketing Decision Support Systems), first with a view inside the "black box", and then from a "support system" perspective, contrasted to other interactive computer systems. Some examples of MDSSs commercially available today are then reviewed in these contexts. Key information technologies which comprise MDSSs are then discussed, followed by some ideas on the roles of managers on the development of these systems within the organization.

Citation

David Ing, "The Evolution of Decision Support Systems in Consumer Goods Marketing", The Marketing Information Revolution, Robert C. Blattberg, Rashi Glaser and John D. C. Little (editors), Harvard Business School Press, 1994.