Market Information and Knowledge Management 1

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Market Information and Knowledge Management

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Introduction

The Buzz Words We Hear Today:Information EconomyInformation AgeInformation Society

In fact, information, by itself, is being viewed as a resource for gaining competitive advantage.

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Introduction

On the flip side, we often hear:Marketing is too important to be left to the marketing department.WHY?Are all of you here focusing on marketing not talented or trained enough?

Marketing and Technology Co-alignment: A Necessity

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Examples

COSMOS

SABRE

ECONOMOST

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COSMOSFederal Express’s COSMOS customer service system tracks every

movement of every package in the network (through handheld computers carried by all employees who handle packages). It has become the basis for the firm’s continuing ability to differentiate itself in an increasingly competitive market. Thecompany is now providing customers with terminals and/or software so that they can tie into systems directly – in effect enabling Federal Express to manage its own shipping department, thus creating huge customer switching costs.

Glazer (1991)

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SABREAmerican Airlines’ SABRE reservation system, in addition to its well-

documented role in retail travel agencies, is the basis of both the firm’s successful frequent flier program and its ability to implement “yield management” or flexible and dynamic pricing. The system has now been extended to in-house corporate travel departments and help organizations manage their travel and entertainment operations.

Glazer (1991)

Market Information and Knowledge Management 2

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ECONOMOSTMcKesson, the pharmaceutical wholesaler, implemented its

pioneering ECONOMOST system by placing terminals in drugstores and trying them into McKesson’s central computer. Originally designed to expedite order processing and control inventory, the system rejuvenated the wholesale drug distribution industry (not coincidentally resulting in the elimination of dozens of competitors). McKesson is now effectively managing retail drugstores for its clients by selling back to them summaries of information collected daily.

Glazer (1991)

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Topics of Discussion

Defining Information and Assessing Information QualityMarketing Information and Knowledge ManagementOrganizational Information Processing Explicit and Tacit KnowledgeThe Case of KPMG

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Information

Data that has been structured so as to endow it with meaning.

Current trends:Increase in amount of information.Increase in speed of information transmission.

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ConsequencesBlurring of product-market boundaries.

Example: Consumer Electronics and Computer Manufacturers.

Changes in Organizational Roles.More outsourcing, especially IT.

Porter’s value chain analysis?

Breakdown of functional boundaries within firms.

Marginalization of the role of marketing.

Justify existence by linking to Bottomline.

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Information Continuum

Info

rmat

ion

as W

ealth

Gen

erat

ing

Ass

et

Transaction Based Information Systems (e.g., SABRE)

Information Independent Products (e.g., McDonalds)

Information critical for marketing effort but not part of product per se (e.g., most consumer nondurables)

Information used in product customization (e.g., Panasonic Bicycles)

Information forms secondary part of product (e.g., American Hospital Supply)

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Information Quality

AccurateRelevanceClarityTimeliness

Market Information and Knowledge Management 3

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Increasing ReturnsRETURN ON ASSETS

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8

ASSET LEVEL

RE

TU

RN

Physical AssetInformation

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Examples: Increasing Returns

Products that have high network externality

Interstate highway systemFax machines

When fixed costs are high and variable costs are low (Ford Motor Company).Organizational culture

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Market Information and Knowledge Management

Focus on information from the Market.ConsumersCompetitorsExternal Stakeholders, in general.

Examples:Buyer behaviorCompetitive signals and reactions

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Market Information and Knowledge Management

DomainsNew Product DevelopmentNew Product MarketingCustomer Relationship ManagementSegment, Target, Position (STP)Designing Marketing Mix ElementsMarket Structure…

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Organizational Information Processing

Processes through with information is created, disseminated and used in firms. Encompasses organizational learning

Exploration

ExploitationVicarious Learning

Collateral Learning

Experiential Learning

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Organizational Information Processing

Assimilation

Transmission

ConceptualInstrumental

Utilization

Market Information and Knowledge Management 4

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Explicit and Tacit Knowledge

Why did you decide to get a Marketing Degress?Explicit Knowledge: Can be easily articulated and passed on to others (e.g., technical skills)Tacit Knowledge: Embedded in organizational socio-cultural systems that create barriers to imitation.

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KPMG: One Giant Brain

Objective:“… deliver the collective know-how of all our professionals, any time, any where on the map.”“We don’t produce widgets, we are the quintessential knowledge-based organization; we are one giant brain.”

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Knowledge Manager (KMan)

The conference (Tacit Knowledge)“It was a repository of experiences, ‘lessons learned,’ information, and documents submitted from throughout the firm, and reviewed for quality by content experts.”

The Library (Explicit Knowledge)Keywords searchable abstracts.

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Knowledge Web (KWeb)

Knowledge capture and disseminationAccess to internal and external databasesMessaging and collaboration toolsInternet linkagesPlatform for creating various application software

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Knowledge Management Process

AcquisitionLibrary Management Activities

IndexingFilteringLinking

DistributionApplication

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Keys to Success

Adapting organizational structures

Embedding knowledge sharing environment in organizational culture.

Market Information and Knowledge Management 5

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Summary

Defining Information and Assessing Information QualityMarketing Information and Knowledge ManagementOrganizational Information Processing Explicit and Tacit KnowledgeThe Case of KPMG

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Conclusion

We view every aspect of marketing with the “Information” lens. Our objective is how to best manage this informationWe hope that soon somebody important will say:

Marketing is too important NOT to be left to the marketing department!