Download enterprise marketing information system for pesticide distribution

ENTERPRISE MARKETING INFORMATION SYSTEM FOR PESTICIDE
DISTRIBUTION
DULANOVIĆ , Živko, (YU) –JEVTIĆ , Miloš , (YU) –Č UDANOV, Mladen,(YU)
ABSTRACT
This article contains general view on goals and development of MIS. Also, is showed
structure and treatment of implementation on the case of enterprises for distribution pesticide.
Specially is showed structure of Database of costumers and products and her importance to
realization marketing action. In this context is very important role of Database and direct
marketing.
KEY WORDS
database; direct marketing; MIS; pesticide distribution.
INTRODUCTION
Growing needs in customer relation management and marketing in general imply use of IT for
creating better insight in huge amount of data. There are different approaches in defining
marketing information systems (MIS). One part of authors and practitioners expect MIS to
help in preparing information for marketing planning and control. Others see marketing
information systems as system of reports. Out of this aspect, MIS is defined as "system
research" with meaning of systematic search, gathering and interpreting market data. This
definition identifies marketing research that is above all directed to market opportunities
lookup.
Lately, MIS cannot be defined clearly without regarding IT, used as basis for its
implementation. Finally, that is generally required, accepting the fact that IT contributed MIS
in aspect of efficiency. Sometimes, IT staff is interested to downgrade MIS to technology
used, which implies that there is no MIS without computers. Neither of those extremes is
useful in practice. Marshal and La Motte defined MIS as unified information needed for
marketing decision-making. It usually consists out of several different systems, each with
specific use that is not for marketing. All those systems represent components of management
information system [6].
MATERIAL AND METHODS
This paper tries to give stimulation to enterprises that have requirements for MIS, through
description of systematic approach to its development. Case of MIS was realized in one of the
major multinational company for pesticide production and part of it was implemented using
methodologies of Faculty of organizational sciences.
RESULTS
This paper presents procedure of graduate MIS implementation in pesticide Distribution
Company. Proposition of database structure, required fields, practical ways of getting
information is also discussed.
DISCUSSION
MIS GOALS
Management which adopted marketing orientation in corporate governance makes
decisions on basis of researched and identified needs and wishes of the consumers, concurrent
positions and activities of other enterprises and resources for output creation. In basic concept
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we can see an array of information needs that must be fulfilled for quality decision-making.
That needs are basic purpose and goals of MIS.
Generally MIS can be determined as information support making for marketing
decision-making. From view of functions it generates, MIS comprises:
• Information gathering; from different sources, arrangements, for different uses
and with different dynamics;
• Transformation of information, using different methods and variables of
decision-making models and final decision;
• Distribution of information to users inside or outside of corporation.
Experience gathered through cooperation with agricultural companies apply that its
management have aversion toward IT, and MIS accordingly. They justify it:
1. No needs for information of that kind, since they have 4-5 species, government
determined prices and sale conditions and 5-10 standard buyers.
2. Fact that agriculture situation in Serbia is so unstable that it cannot be predicted for more
than a month.
3. Fact that market information already exist (non-systematized and in non-corresponding
form), which causes that in decision making intuition is more important than information.
4. Belief that inlays in MIS is higher than benefits from it. That is rather rational syllogism
regarding previous lines.
An option of phase development of MIS will be presented to avoid multiplication of
described aversion. This option implies that MIS is created though through continual process
of development, and not as purchase of finished application that has no competent user. In
practice, there are several forms of uses of MIS [5]:
1. Systems of data gathering and processing (oriented toward reports):
a. Report systems (flexible reports);
b. Systems of identification and classification;
2. Control systems (systems of notification or warning systems):
a. Systems of early exception notification;
b. Systems of early notification;
3. Intelligent MIS:
a. Prediction systems:
i. Growth estimation;
ii. Success estimation;
b. Decision systems:
i. Decision support;
ii. Decision-making.
MIS DEVELOPMENT PHASES
Most usual approach to MIS development is without planning, just by grouping available
data, without idea of its future use. Those data are in native form and unselected. Every kind
of archive is kind of example of such IS. In that purpose, accounting data can be used, but in
secondary form, which makes it harder to get information needed. In case that is analyzed,
marketing information access had those attributes. Hence, accountant manager knows more of
sales than sales manager. Data are present, but not in form and place that helps to sales
results. It is the same with marketing budget data, which are controlled by accounting
manager, not by marketing manager. When computers are purchased to aid data processing,
this practice is often continued. Computers just automate this non-functional routine. In time,
knowing the IS possibilities, managers generalize data access and develop systems of first
level of use and development. Rest of information operations is generally not systematized.
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Typical for next phase of development is use of same kind of information, but with
orientation on control system support, implicitly to planning system, using their function in
negative back coupling. Only systematic, modeled decision approach makes MIS fulfill its
purpose. When MIS is developed so it can generate future trends and create a pattern for
decision-making concerning those trends, it is almost complete, with respect to its further
development and perfection of the system.
Second aspect of MIS development is its implementation using modern ICT. That
implies another concept of knowledge and activities that must be put in function of the same
goal. Structure of marketing IS from this perspective are four basic components: database,
base of methods, model base and communication relations. To integrate MIS to computers it
is necessary to use certain resources: data model and process model.
CUSTOMER DATABASE
Customers database, including data on active or potential customers can be created for
one product, part or whole assortment of company's products. This is emphasized for
understanding that its forming can be slow and expensive process, but it does not mean that it
can be useful only when it is completely finished. In time, it will contain historical data as
well as present data, and when they work in synergy with predictive models, database can be
use for forecasting.
Database worth increases in time. In the beginning it consists only of data gathered on
basis of systematized researches and notifications regarding basic customer data. Afterwards,
present randomly gathered data on single customers are entered. In that meaning, database is
used not only to store and help reusing of past and present data, but also to create new
approach in data gathering. When it exists, every data about customer or user has a place to be
stored and can be eventually reused.
Database for pesticide distribution in observed company is created first by entering all
registered distributors of chemical and other products regarding agriculture (about 100 of
them present in Serbian market), all agricultural companies and processing factories (around
600 of them present in Serbian market). Next in queue were activities for entering data about
small retailers that distribute products for plant protection. This company had two different
clusters of customers, companies and individuals, so data for them have different structures.
MARKET SEGMENTATION AND CUSTOMER DATABASE
Customer database gives much better insight for origin, needs, requests, buying
possibilities status, history etc. Regarding aggregation of those data and possibility of
database on any of those attributes there is almost endless criteria for customer segmentation
in created database. Segmentation in pesticides sales market includes geographical distinction,
commercial status and ownership structure distinction.
Commercial status distinguishes four segments: (1. sales on gross (other distributors),
2. mills, 3. retail, 4. individual producers). Significance of each segment is not equivalent, as
told before, but each is equally analyzed and overlooked. Status of customer can be one of
segmentation criteria. Status can be determined on basis of cooperation and contact history.
First, we can distinguish its loyalty, stability and status of customer. These segments differ in
need for marketing and advertising activities. If we don't accept this fact we can have loss of
resources from marketing budget. Anyhow, segmentation in customer database can make
planning and tracking marketing and sale activities on target markets easier.
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DATABASE AND DIRECT MARKETING
Database marketing is not a sale technique, it is approach of planning, realization and control
of marketing activities base on customer database. To fulfill this function, database must have
at least two parts: operational and analytic. Basic sources of those data are [2]:
analytic data
operative data
Planning systems
Sale systems
Customer
database
Customer service
systems
Financial systems
Marketing
systems
Fig. 1: Data in customer database
This database will make possible layout of highly focused marketing campaigns towards
individual or single institutional customer. This will create intensive or programmed
marketing communication with potential and resident customers which will keep their level of
loyalty high and disable opponents to enter that market segment.
Database has names, functions, addresses and direct phones of people who participate
or make decisions of pesticide buying. Mailing Comp. module has data on advertising and
marketing activities that were undertaken in relation with customer. It links marketing
activities and customer by relations that exist between them. This way not only commercial
effect, but also communication cost can be analyzed for each customer.
Aims and goals of this project are not only increase in level of product offer, but also
direct contact with potential customers, and access to data about their possibilities, needs and
objections. On that ground differentiation of marketing strategies regarding each segment and
further appliance of this project on new segments will be proposed. Practically, goals of
participants on this project will be:
• Increasing insight of customer needs and wishes;
• More efficient management of customer resources (frequent deliveries, direct shipments,
advices, advertising material for final retailer);
• Better understanding of local markets;
• Insight in opponents actions;
• More efficient sale activities;
• Direct influence on business advertising in that market segment.
PRODUCT DATABASE
Product database has all data on all registered pesticides in Serbia. Those data are
gathered and updated using licenses for pesticide distribution, issued from department of
agriculture in Serbia. Data structure is complex and involves product name, product group
(herbicide, insecticide, acaricide… ), active substances, producer name, formulation creator,
general distributor, price, etc.
Special value to this database is added through Active Ingredients module that has all
data on active substances, based on Bayer nomenclature. Active material is grouped on
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indications on which it reacts. Further value of this database is from module Indications that
has all data on weed, insect and fungus species. In implementation of this module, Bayer
nomenclature is also used, ensuring compatibility with other modules. This module has
information on more than 100 000 indications.
Such structure enables that data is used not only for marketing, but also as an expert
system that gives competent advice to pesticide users. As an example, if user makes request
regarding crop indication, as corn leech, module Active Ingredients will list all active
substances that have effect on such disease, and further module products will list all products
that have that substance, appliances and approximate price, so user can optimize costs on
disease prevention. As example, 'Decis 2,5 EC' is product that works on 27 more indications.
This prevents practice to treat each indication with different pesticide, and decreases
prevention costs. As special products, agricultural crops by Bayer standards are also included
in database. Module that uses very important function in research, planning and control of
market use is module country planted area that has data on sawn fields by plants and buyers or
potential buyers of pesticides. Its importance is increased by module that covers accomplished
sales.
MIS IMPLICATIONS ON MARKETING CONCEPT
Information systems, especially automation of its realization and functions by IT has
not considerably changed basic orientation of marketing concept. Goals and carriers of
marketing activities are just insignificantly changed. Considerable changes can be seen just on
level of basic marketing operations and partly on level of its strategic planning. Following
table covers observations on previous premises. Table has three key phases of marketing
development, created on basis of change of IT role and IS in major operations realization. We
can conclude that basic changes in last phase of development are result of DBM and direct
marketing appliance, as we described in previous text.
Marketing area
Traditional
Computer supported
marketing
Behaviouristic
Attracting
Adjusted
By market
Divided data
MIS
Segmentation
Demographic
Database
Advertising
Imposing
Interactive
Promotions
Mass
Iterative
Pricing
Internal
Negotiation
Sales
Local data on
Marketing and sales as
management
sales
partners
Distribution
Intermediate
Direct
Multi-channel
New products
Natural
Led by customers
Marketing expansion
Table 1. Comparison of traditional and MIS supported activities
CONCLUSION
Process of MIS creation is complex and long lasting, regarding IT basis development.
This paper presents results of such procedure as final database of customers and products.
Particularities of database used for pesticide distribution are described. Database is relational,
and it can be used for planning, realization and control of customer base activities, but also
and for pesticide based activities. Change in operative marketing activities (advertisement and
sales), regarding using of database as basis for DBM and direct marketing is especially
emphasized.
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LITERATURE
1. Stone, M. and Show R.: Database Marketing for Competitive Advantage, Long Rang
Planing,
2. Vol.20, No2, 1987.
3. O'Connor, J. and Galvin, E.: Marketing & Information Tehnology, Pitman Publishing,
London, 1997.
4. Nash, L.E.: Database Marketing - The Ultimate Marketing Tool, Mc-Grow-Hill. Inc.,
New York 1993.
5. Hanić , H.: Marketing informacioni sistem, Ekonomski fakultet, 1998.
6. Filipović , V.: Marketing i tržiš te, Fakultet organizacionih nauka, 1997.
7. Marshall, K.P. and La Motte, S.W.: Marketing Information System: a marriage of systems
analysis and marketing management, Journal of Applied Business Research, Vol.8, No.3,
Summer 1992.
CONTACT ADDRESS
Prof. dr Ž ivko Dulanović , Fakultet organizacionih nauka, Jove Ilić a 154, 11000 Beograd
Serbia&Montenegro, [email protected]
Oponent: doc. Ing. Ľudmila Nagyová , PhD.
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