MCS 2020 chapters notes 1-6 .doc

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Marketing and Consumer Studies
MCS 2020
Nicole Mc Callum

Chapter 01 – The Information Age • Textbook Readings o Apology to the Reader (p. xiii – xiv) o Instructions for Use (p. xvii – xviii) o 1.1: Welcome o 1.2: Information as Commodity o 1.3: Information Overload o 1.4: The Attention Economy o 1.5: Learning the (Digital) Economy • Learning Objectives o Acknowledge the three key components of any information system: information, technology and people o Understand how various departments create, organize, store, retrieve, and share information within an organization o Identify key information roles within an organization (e.g. CIO, CTO, CSO) o Explain how information is like (and is not like) a commodity o Recognize the factors that contribute to information overload (and strategies for combating it) o Understand the basic tenets of the attention economy thesis o Discuss the validity of the digital native/digital immigrant divide • Key Terms o Reverse engineering o Request for Tender / Request for Proposals o Chief Information Officer o Chief Knowledge Officer o Chief Security Officer o Chief Technology Officer o Chief Privacy Officer o Commoditization of Information o Information Economy o Attention Economy o (Lack of) Information scarcity o Information overload o Digital natives o Digital immigrants o Just in time learning vs. Just in case learning o Access management o Internet  Privacy o Database o Pattern recognition o Demographic data/ marketing o Intellectual Property o Copyrights & Trademarks o Electronic Commerce o Technology Trends • INFORMATION AND MANAGEMENT • Sales and Marketing o Sales  Selling goods and services • Customer management • Lead tracking • Sales forecasting o Marketing  Promotion of goods and services • Advertising • Special events • Campaign management • Public Relations (PR) o Represents the company to the public  Customer service  Complaint management (external)  Media relations  Press releases • Accounting & Finance o Accounting  Quantitative financial information • Budgeting • General ledger • Cash management o Finance  Strategic financial issues • Investments • Business analysis • Financial reporting • Human Resource o Management of employees:  Recruiting  Compensation  Assessment  Development and training  Complain management (internal)  Strategic personnel planning • Operations Management o Operations Management  Concerned with the production of goods and services • Inventory management • Quality management o Logistics  Delivery of goods • Supply chain management • Fleet maintenance o Purchasing (or Procurement)  Acquiring goods for production • Suppliers relations • Requests for tender/requests for proposal • Testing assessment • Research & Development (R &D) o Developing new goods and services for the market  Managing intellectual property  Prototyping  Product testing  Reverse engineering  Research • Management Information Systems o Information technology  Maintains vital information infrastructure • Access management • Data preservation • Data maintenance • Hardware & software acquisition • Training • Technical support • Key Information Personnel o CIO – Chief Information Officer  Oversees I.T. across the organization  Aligns I.T. goals with strategic plan o CTO – Chief Technology Officer  Ensures efficiency of the technology  May lead the R&D efforts in hi-tech firms o CSO – Chief Security Officer  Secures I.T. systems and networks  Guards again hackers o CPO – Chief Privacy Officer  Responsible for ethical and legal use of information  Aware of government legislation o CKO – Chief Knowledge Officer  Collects, maintains and distributes company information  Designs systems for people to share and reuse information • THE INFORMATION ECONOMY • Information Economy o Information facilitates transactions  Manufacturers, distributors, retailers, customers o Information improves decision-making  Business: Deliver better goods and services  Customer: Select appropriate goods and services o Information provides competitive advantage  Better information = better performance • Commodity o Information is bought and sold like a commodity  Commodity: article of trade and commerce • Usually describes something tangible  Examples: wheat, corn, crude oil, gold, aluminum o Business models are based on selling information  Examples: data brokering, intellectual property, market research o Information is a commodity  Can be bought and sold  Can be manipulated into ‘new’ products  Subject to quality control and depreciation o Information is not a commodity  Is not tangible  Is not manufactured  Is not completely consumed  Is not limited in quantity • Attention economy o Economics is about scarcity  Choices we make to distribute finite goods  How supply meets demand • Scarce = more valuable • Abundant = less valuable o Information is not scarce  Nor are: capital, labour, talent, ideas o Attention is scarce  We are limited in what we can attend to o Attention economy  Focused mental engagement  Awareness to attention to action  Time and effort o Rheingold’s Rules  Pay attention  Pay attention to where you pay attention o More attention = more success  Business need to attract (and keep) attention • DIGITAL NATIVES AND IMMIGRANTS • Information Overload o Information Overload  Having too much information to make a decision  Receiving too much information to stay informed  Either condition contributed to mental stress o Causes  Information • Quantity, formal, granularity, source  Technology • Ease of distribution, channel, redundancy  People • Pressure to be ‘always-on’, multitask o Information Overload: Symptoms  Develop a lack of desire to learn  Tolerate a greater level of error  Utilize poor search strategies  Contribute superficial analysis  Cannot separate details from the big picture  Cultivate an overconfidence in our ability to find, analyze and use information effectively o Information Overload: Strategies  Information • Improve the quality in formation we retain • Improve organization and description • Reduce duplication  Technology • Automate information retrieval • Filter out irrelevant content  People • Identify information needs • Improve our ability to evaluate information • Digital Natives (our generation) o Control their information consumption o Manage information tasks with technology o Expect information to be instantly relevant, applicable, and free o Create and contribute content readily o Reveal more personal information online o Build communities online based on shared interests o Express themselves through personalization • Natives vs. Immigrants (previous generation) o Digital natives  Choose multimedia and images over text  Comfortable with multitasking  Prefer access information randomly  Learn information ‘just in time’ o Digital immigrants  Choose text over multimedia  Comfortable with focused tasks  Prefer linear and sequential routes to information  Learn information ‘just in case’ • Organization Culture o Traditional organizations  Command and control hierarchies  Levels of bureaucracy  Structured authority  Low tolerance for personal intrusions o Digital native expectations  Fewer organizational boundaries  Access to technology for work and play  Multiple modes of (informal) communication  Flexibility on time and task Chapter 02 – Information Concepts • Textbook Readings o 2.1: What is Information? o 2.2: Knowledge Hierarchy o 2.3: Knowledge Continuum o 2.4: Information Transfer o 2.5: Noise o 2.6: Explicit vs. Implicit (experiment worksheet optional) • Learning Objectives o Differentiate between symbols, data, information, knowledge and wisdom o Compare and contrast different definitions for ‘information’ o Explain the process of ‘understanding’ o Describe how information is transferred between sender and receiver o Acknowledge the effect of noise on signal transmission and message communication o Distinguish between explicit and implicit messages o Recognize the importance of context when interpreting information o Identify the reservoirs in which knowledge resides in organizations o Define the fundamental components and functions of databases o Understand data relationships and other considerations related to database design • Key Terms o Symbols o Data o Information vs. Information record o Knowledge o Wisdom o Understanding o Interpolative vs. Extrapolative o Deterministic vs. Non-deterministic o Probabilistic vs. Non-probabilistic o Noise o Sender / Source o Receiver / Destination o Medium / Channel o Message o Vickery Information Transfer Model o Implicit vs. explicit o Feedback o Knowledge transfer o Knowledge reservoirs o Database vs. Database Management System (DBMS) o Primary key o Entity integrity • BUILDING BLOCKS OF KNOWLEDGE • Information is… o ‘Data that has been organized and communicated’ o ‘A record of resolved uncertainty’ o ‘Information demotes any stimulus that alters cognitive structure in the receiver’ o The cognitive state of awareness (as being informed) given representation in physical form (data). This physical representation facilitates the process of knowing. o The meaning that a human assigns to data by means of the human conventions used in their representation. • Symbols o Basic element in information sharing  Creation, transmission, reception o Graphical representations  Visual short forms  Unspeakable o Semiotics (semiology)  Study of signification and communication • Data o Record of observed facts  Unorganized  Not necessarily related  No meaning on its own  Exists in multiple forms  Does not require direct human observation o Communicated by combing symbols  Arranged according to rule, convention, or system • Braille, Morse code, Ancient Hieroglyphics, Grammar • Information o Ordered data  Related facts have been aggregated  Organized and connected to provide meaning  Processed by humans o Relationship and interaction is essential  Relationship to other data  Interaction with the receiver of the data o Information vs. Information Record  Information • Content or message • Can be given away and retained simultaneously  Information record • Carrier or container • Form (medium of the message)  Examples • A class photograph • Digital songs (mp3) • Knowledge o Assimilated information o A deterministic process  All knowledge has sufficient causes  New knowledge is based on antecedent events (what has happened before)  Links to previous ideas, events, observations, knowledge o Knowledge informs decision-making in business • Understanding o Synthesizing new knowledge with previously held knowledge o Interpolative  Inserts meaning between concepts  Connects ideas  Concerned with the relationship between new and old o Probabilistic  Interested in the probabilities of future phenomena  Using knowledge to project the future • Wisdom o Applies moral ethical judgment to understanding o Principle-based (uniquely human) o Extrapolative  Expands beyond what is known o Non-probabilistic  Not concerned with probabilities of specific event o Non-deterministic  Not concerned with natural laws or cause • INFORMATION AND KNOWLEDGE TRANSGER • Robust definition of information o ‘A stimulus originating in one system that affects the interpretation by another system of either the second system’s relationship to the first or of the relationship the two systems share with a given environment’ o ‘A system may be a mechanism, an organism, a community or an organization’ • Information Definition o Information must make an impact  Affects interpretation o Involves multiple ‘systems’  Originating system  Receiving system o ‘Systems’ are connected  Direct relationship  Indirect relationship (shared environment) • Understanding o Synthesizing new knowledge with previously held knowledge o Interpolative  Inserts meaning between concepts  Connects ideas  Concerned with the relation between new and old o Probabilistic  Interested in the probabilities of future phenomena  Using knowledge to project the future • Understanding as a Process o • Information transfer o Three basic components  Sources of message • The sender  Channel of the message • The medium  Destination of the message • The receiver • Vickery Information Transfer Model o • Vickery Model o Sender’s perspective  Move receiver to K(2) o Receiver’s perspective  Combine information with knowledge state o Improve information transfer with feedback loops  Alter the channel  Alter the message • Pragmatic approach • Semantic approach • Technical approach • Noise o Pattern Interference  Extra bits of data that interfere with the pattern of knowledge • Too much information (overload) • Conflicting signals (interference)  Missing bits of data that make the pattern incomplete or difficult to discern • Missing details (lack of connection) • Dropped packers (unsuccessful transfer) • Knowledge Transfer o ‘Knowledge transfer is the process through which one unit is affected by the experience of another’ o Transfer across groups (not individuals)  Benefits the organization as a whole o Measured by:  Increase in performance and productivity  Increase in knowledge and expertise • Reservoirs of Knowledge o Knowledge Resides:  Members (social network) • Experience, expertise, ‘know-how’  Tools (combination of technologies) • Software, hardware, machinery  Tasks (sequence of routines) • Operating procedures, best practices, processes  Various combinations of members, tools & tasks • Division of labour (member-tasks) • Division of technical expertise (member-tool) • Division of technology (task-tool) • DATABASE MANAGEMENT SYSTEMS • Database, DBMS & Applications o Database  A collection of related data  Organized to facilitate data searching and retrieval o Database management Systems (DBMS)  Software that manages data  Managed by database administrators o Application Software  Enables users to modify and retrieve data  Used by employees within the organization o • Database Systems o Key considerations:  People • Administrators and regular users  Information • Data and organizational structure  Technology • Software and hardware o People interact with information (e.g: databases) through the technology (e.g. DBMS software) • Database Functions o Enter data  Uses database forms  Enforces data standards with a data dictionary o Query Data  Permits general keyword searching  Enables facet searching o Report Data  Permits single use output  Automates repetitive reporting • Database (Key Components) o Entity – something you collect data about  E.g. books o Attribute – individual pieces of information about an entity  E.g. ISBN, title, author, pages, format o Record – collection of related attributes about a single entity o Entity = Table = Noun  People o Attribute = Column = Adjective  SIN, name, phone number o Record = ROW = Proper Noun  An individual person o Note: A database will have many entities  Relating entities is the key strength of a database • Thomas Net (example) o Entities  Manufacturers, industries, key executives, etc… o Attributes (for manufacturers)  Company name, address, description, industry, etc… o Record  An individual company • Ellsworth Adhesives o Web: • Entity Integrity / Primary Key o Each entity has an attribute that uniquely identifies each record (also known as primary key)  E.g. Student ID number • Distinguishes one student from another • Database Advantages o Program-data independence o Minimal data redundancy o Improved data consistency and sharing o Enforcement of standards o Improved data quality & accessibility o Reduced program maintenance • Database Disadvantages o May require specialized personnel  Database administrators, designers, coders o Costly to install  Conversion of existing data o Complex to manage o Need for regular backup and data recovery policies Chapter 03 – The Information Environment • Textbook Readings o 3.1: What is Technology? o 3.2: Information Systems o 3.3: Efficiency and Effectiveness o 3.4: Competitive Advantage o 3.5: Technology as Utility o 3.6: Switching costs (experiment worksheet optional) • Learning Objectives o Compare and contrast disruptive technology with sustaining technology o Distinguish between the categories of information systems (TPS, MIS, DSS, & ESS) o Apply efficiency metrics and effectiveness metrics when evaluating an information system o Recognize that different information systems are needed to solve different problem definitions o Explain the function of specific business information systems (CRM, SCM, ERP, ERM, etc.) o Know how information management contributes to competitive advantage, value creation and organizational decision making o List, describe and apply Porter’s Five Forces Model as related to MIS o Distinguish between proprietary technology and infrastructural technology o Understand real and perceived switching costs • Key Terms o Technology o Disruptive technology / Disruptive innovation o Sustaining technology / Sustaining innovation o Technological determinism o Hardware vs. Software o Applications o Transaction Processing Systems o Management Information Systems o Decision Support Systems o Executive Support Systems / Executive Information Systems o Efficiency vs. Effectiveness o Benchmarking o Productivity metrics o Quality metrics o Customer Relationship Management (CRM) o Supply Chain Management (SCM) o Enterprise Resource Planning (ERP) o Supplier Relationship Management (SRM) o Partner Relationship Management (PRM) o Employee Relationship Management (ERM) o Information systems o Competitive advantage o Porter’s Five Forces o Proprietary technology vs. Infrastructural technology o Technology as commodity o Switching costs • INFORMATION SYSTEMS • Information Systems o Information needs to be  Accurate  Timely  Relevant o Systems need to allow users to:  Add (and modify) information  Access (and retrieve) information  Restore (and archive) information o Design need to consider:  Information  Technology  People  System Objectives o ‘An information system employs technology to manipulate information and leverage the talents of people in pursuit of an objective’ (page 45) • Information Systems (Functional Areas) o Transaction Processing Systems (TPS)  Records routine transactions o Management Information Systems (MIS)  Provides internal data summaries o Decision Support Systems (DSS)  Contributes to analytical decision making o Executive Support Systems (ESS)  Aka: Executive information Systems (EIS)  Supports strategic planning o • I.T. Metrics: Efficiency & Effectiveness o Efficiency (“Do things Right”)  Measure the performance of the I.T system • Speed, processing capacity, availability • Examples: throughput, transaction speed, system availability, information accuracy o Effectiveness (“Do the right things”)  Measure the impact that I.T. has on business • Customer satisfaction, employee processes • Examples: usability, customer satisfaction, conversion rates, return on investment (ROI) • Baseline Metrics o High efficiency does not equal high effectiveness  Systems must strive to achieve both o Measure again benchmarks  Baseline values the system seeks to attain o Benchmarking  Continuously measuring the system results  Comparing to optimal performance (benchmark)  Identifying steps to improve performance • Disruptive vs. Sustaining Technology o Disruptive technology (disruptive innovation)  Improves products or services in radical new ways  Unexpected by the market  Threatening to existing market leaders • Displaces or marginalizes existing product or service o Sustaining technology (sustaining innovation)  Improves products or services  Does not upset the market • Revolutionary – improvements are unexpected • Evolutionary – improvements are expected • Customer Relationship management o CRM is a business strategy aiming to understand and to anticipate the needs of existing customers and to seek new ones who might potentially be interested in products or services. o CRM: Purpose  Differentiate customer treatment according to individual preferences  Anticipate a customer’s unspoken needs  Add a human element to the purchase  Move from a product or service-based approach to the an experienced-based one o CRM: Components  Operational CRM • ‘Front-Office’ CRM • Areas where direct customer contact occurs  Analytical CRM • ‘Back-Office’ or ‘Strategic’ CRM • Data is analyzed to make decisions • Goal is to increase loyalty and profitability o Operational CRM  Customer interaction applications • Direct customer contact (‘Touch-points’)  Inbound contacts • Email, web support, call centre  Outbound contacts • Direct sales, telephone sales, surveys o Analytical CRM  Data-Marts • Small archives of data for specific purposes  Data warehouses • Collection of data-marts  Reports & Applications • Uncover relationships in the data  Feedback Loop • Direct response to customers • Debate 1 – Employee Monitoring o Company is growing faster than anticipated  Need to hire new employees o Human Resource department is strained  Recruiting and hiring employees  Training new hires  Develop additional policies and procedures o Managers are concerned  Inefficient operations  Employees misusing company time and resources o Recent issues identified by HR  Using company internet for personal activates • Shopping, email, gambling, social networking, etc…  Drain on company bandwidth • Excessive downloading (music & video)  Employee downloaded data to her iPod • Claimed she needed it to work from home  Unauthorized use of open computer terminals • Accessing pornographic material o In the past…  Allowed employees to manage themselves  Tolerate some personal activities at work  Relied on employees’ common sense o Upper management is concerned  Cannot allow behaviour to undermine the business  Cannot afford inefficiencies or data theft  Cannot risk accusations of harassment o Potential solution  Implement employee monitoring technology • Software monitoring, hardware monitoring (cameras)  Use technology to enforce the existing polices o Controversy  Technology may avert major scandals • Protect the business  Technology may lower staff morale • Increase employee stress o What should we do?  For use of technology to monitor employees – Group A  Against use of technology to monitor employees – Group B • INFORMATION AND COMPETITIVE ADVANTAGE • Supply Chain Management (SCM) o Integrates all processes related to production and delivery of the final product o Purpose: manage inventory, production, delivery o Key departments:  Production management, logistics, purchasing o Reasons:  Increased production efficiency  Better inventory management  Better coordination and communication • Enterprise Resource Planning (ERP) o Integrates all departments and functions into a single I.T. system (or set of integrated systems) o Purpose: manage all internal information o Key Departments:  Account & Finance, HR, Production Management o Reasons  Coordinate previously incompatible applications  Facilitate global information sharing  Avoid fixing legacy systems • Additional Systems o Supplier relationship management (SRM)  Analyze vendors based on performance  Optimize supplier selection o Partner relationship management (PRM)  Manage alliances with partners and resellers  Expand your market coverage o Employee relationship management (ERM)  Manages employee development  Training, compensation and career management • Management Information Systems (MIS) o Management information systems (MIS) is the function that plans for, develops, implements, and maintains IT hardware, software, and applications that people use to support the goals of the organization. o MIS: Organizational Goals  An organization should: • Determine what information it requires • Acquire the necessary information • Organize the information in a meaningful fashion • Assure the quality of the information • Provide tools so that employees can access the information o MIS for Decision-Making  Decision making • Transforming data into ‘actionable information’  An information system must: • Collect and summarize organization data • Enable sophisticated data analysis • Facilitate sifting and sorting of information • Protect corporate information o MIS for Value Creation  Value creation • Business as a series of processes – each process adds value to the product or service  An information system must: • Provide flexible means for adding to existing information • Be accessible and responsive • Identify processes that are ineffective and inefficient o MIS for Competitive Advantage  Competitive advantage: • When a organization’s customers place greater value on its product that the competitors’  An information system must: • Handle information that is essential to the organization • Be hard to duplicate • Provide a unique collection of information • Porter’s Five Forces: For evaluating competitive advantage:  Buyer Power  Supplier Power  Threat of Substitutes  Threat of New Entrants  Rivalry among Existing Competitors o Buyer Power  High when there are many choices in the market  Low when there are few choices in the market  To create Competitive Advantage: • Reduce buyer power • An organization must make itself more attractive • Give the buyer a reason to purchase from you o Loyalty programs o Deep discount prices o Membership fees o Supplier Power  High when there are few suppliers to buy from  Low when there are many suppliers to buy from  To increase Competitive Advantage: • Reduce supplier power • Increase number of supply sources • Find alternatives • Keep options open for supplying goods o Reverse auction o Threat of Substitutes  High when there are many alternatives  Low when there are few alternatives  To increase Competitive Advantage: • Reduce the threat of substitutes • Make it difficult for customers to choose alternatives • Switching costs o Cancellation or switching fees o Customer perception of ‘cost’ of moving to a new company o Threat of New Entrants  High when it is easy for new competitors to join  Low when it is difficult for new competitors to join  To increase Competitive Advantage: • Reduce threat of new entrants • Make it difficult for competitors to offer similar products of services • Increase entry barriers for new entrants o Customers expect a baseline experience in the industry o Rivalry among Existing Competitors  High when competition is fierce  Low when competition is complacent  To increase Competitive Advantage: • Reduce rivalry • Increase efficiencies to compete on price • Anticipate customer needs and meet expectations o Collect and analyze customer data o Information is the key to beating competitors Chapter 04 – Information Fluencies • Textbook Readings o 4.1: Information and Technology o 4.2: Literacy and Competency o 4.3: Knowledge Creation o 4.4: Explicit and Tacit Knowledge o 4.5: Evaluating Information • Learning Objectives o Define and distinguish between technological competency and information literacy o Differentiate between explicit and tacit knowledge o Evaluate information (e.g. secondary research) more effectively o Explain the knowledge spiral concept (socialization, articulation, combination, internalization) o List and describe the characteristics of high quality information o Define and distinguish between the five main tools for data collection o Understand sampling (probability and non-probability) and population o Choose appropriate instruments to collect primary data o Distinguish between market research and market intelligence • Key Terms o Technological competency o Information literacy o Communication o Knowledge production o Information navigation o Information characteristics o Explicit knowledge o Tacit knowledge o Knowledge spiral o Socialization o Articulation / Externalization o Internalization o Combination o Evaluating information o Bias o Secondary research o Customer visits / Face-to-face o Focus groups o Surveys o Experiments o Sample vs. Population o Probability sampling vs. Non-probability sampling • LITERCY AND COMPETENCY • Technological Competency o Describes competence with tools  Skill-based abilities  Competency may vary depending on the tool • Installing a wireless network, using Facebook apps, etc… o Describes a broader u
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