Chapter 5 – Decision Support Systems: Introduction
I. Learning Objectives:
Upon completing this chapter, the student should be able to:
1. Define the difference between secondary data and primary data.
2. List the advantages and disadvantages of working with secondary data.
Advantages:
3. Define what is meant by a marketing information system (MIS) and a decision
support system (DSS).
4. Identify the components of a decision support system.
• Data System – processes used to capture and store data from internal and
5. Discuss knowledge management.
An effort to systematically collect organizational knowledge from employees and
make it accessible to others.
II. Chapter Outline:
Research window 5.1 : “Big Data” Visualized: More than One Billion Served
Chapter 5 – Decision Support Systems: Introduction
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A. Secondary Data
1. Advantages and Disadvantages of Secondary Data
2. Types of Internal Secondary Data
1. The Evolution and Design of Information Systems
2. Customer Relationship Management
1. The Data System
2. The Model System
3. The Dialog System
D. Knowledge Management
1. Limitations of the Systems Approach
2. Intelligence Gathering in the Organization of the Future
E. Summary
F. Key Terms
III. Answers to Review Questions
1. The emphasis of the project approach is on conducting projects to address
2. The most significant advantages offered by secondary data are time savings and
money savings for the researcher. Two disadvantages that commonly arise when
3. A marketing information system is a set of procedures and methods for the
regular, planned collection, analysis, and presentation of information for use in
4. In a decision support system, the data system includes the processes used to
capture data, and the methods used to store data, coming from a number of
external and internal sources. It is the creation of the database. A model system
5. Knowledge management expands the concept of an information system by
including the management of knowledge that resides in employees’ heads and
IV. Instruction Suggestions:
1. It is helpful to begin this discussion by emphasizing the difference between
2. One particularly good way of emphasizing the difference between secondary and
primary data is to discuss how each might be applied to the same information
(2) how it might be gotten using each approach. Below are examples of
information in each area that might be needed:
Background:
company identification? location? brief history?
Chapter 5 – Decision Support Systems: Introduction
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affiliates? how company is organized? when did it last alter its structure?
shares outstanding? ownership (insides, institutions, major
shareholders)?
Finance:
statistics and performance analysis? sales by division? profitability by business
unit?
banks/investment banking firms used?
stock market data? current market value?
ratios and industry comparisons?
cash flow analysis? assets and return on assets? capitalization? working
capital?
Products:
products and services offered? market position by product? product
strengths?
new product introductions?
R&D expenditures and apparent interests of technical personnel?
patents held and pending?
product features and quality? technical sophistication?
Pricing:
Markets:
market segments served? markets targeted? degree of penetration? segment
growth?
how does company view the direction of the industry?
markets and geographic areas targeted for expansion?
advertising, marketing, and sales efforts including budgets and ad agencies
used?
foreign trade? recent orders? government contracts?
Facilities:
location? size? domestic vs. foreign?
capacity? capacity utilization? announced capacity expansions?
product mix by plant? shipments and profitability data?
capital investments? equipment purchases?
number of production lines and shifts?
3. Then discuss the general philosophy and problems of a marketing information
systems approach to marketing intelligence. Here it is useful to discuss in
4. Then contrast decision support systems and marketing information systems. It is
helpful to emphasize the key characteristics that differentiate the approaches,
i.e., the ability of managers to interrogate the system in real time rather than