by

W. H. BLOODWORTH

Project Consultant
Consumer Goods Distribution Study Project Management Consultation Services

Whether marketing is defined in general terms such as the American Marketing Association's "the performance or business activities that direct the flow of goods and services from producer to customer or user" as "the creation of time , place and possession utilities for products and services" or in greater detail as to the nature of the customers, products, sales and distribution channels employed, and marketing approaches and functions, the actual work of marketing is primarily concerned with:

      1. Data and information collecting and storing

      2. Data and information processing and presentation 

      3. Planning and decision making

      4. Communicating

      5. Measuring

 in addition, of course, to the actual physical handling of goods and materials.

These points may appear to apply to other functions as well as marketing. Perhaps this means that, With mass distribution moving the products of mass production to millions of customers of all sizes, types and kinds, the integration required has wade impractical the drawing of sharp lines between the functions. In many businesses the same accurate record of sales made to consumers are essential to manufacturing, engineering and finance, as 'Well as 'Marketing. If anything I say seems to apply equally as well to other functions as to marketing, it is only because it appears to me to be a teamwork area, from a marketing viewpoint.

In the past, research, engineering and other sciences have contributed much more to advances in materials, designs and manufacturing than directly to marketing. Now, with high speed electronic computers making possible for the first time rapid, accurate and economical handling of the tremendous amount of data and information included in Marketing, we hope for more benefits from science for that function. However, we realize that the way to do this is not just to mechanize the present methods and procedures. You in the Industrial Computer Section, Operations Research and Synthesis, and others will have to help us develop new marketing systems to properly use these tools just being made available.

Some of the apparent uses of high speed electronic computers and computer section personnel would be:

6.

1. Data and Information Co11ecting and Storing

   a. Cooperation in making available a common machine language for use throughout the Company.

    b. Use of Shannon-Wiener information theory and best techniques to permit use fewest possib1e bits in transmitting and storing data and information.

    c. Ability to retrieve data electronically as , independent of the rate at which the computer itself can accept it.

   d. Sufficient data storage capacity to record the millions of sales orders, cancellations,. stock and inventory transactions made annually throughout the Company. F or instance, by 1965 the Appliance and Te1evision Receiver Division expects to sell ever 8,000,000 units per year. Most Of these will be individual transactions insofar as the ultimate customer is concerned.

   e. Provide rapid access (in the order of 0.25 seconds) to current data, so that customers can be informed immediately concerning the availability and promise of shipment on items not in stock in a particular area, products may be ordered or shipped immediately as required, decisions may be based -on current data, etc. Sylvania Electric, among others, is doing much of this now, with a UNIVAC, near here at Camillus.

2. Data and Information Processing and Presentation

   a. Using the data and information fed into the system, automatically as programmed or scheduled, perform all the routine or repetitive clerical functions, scheduling, ordering, billing, etc., work which can be rigorously thought through or planned.

   b. Using mathematical and statistical methods, such as multiple and partial correlations and regressions, forecast sales, inventory and material requirements, wake area potential determination, distributor or retailer number, size and location, determinations, etc.

   c. Automatically processing and tabulating raw data into reports and presenting them when, 'Where, how and to whom scheduled.

   d. Use sales and production records for automatic  replenishment for distributors and/or retailers, and overall optimum inventory control where required.

   e. Use of data and mathematical methods such as linear programming in ca1culating the Optimum. method of transportation for all products and locations, game theory and Monte Carlo methods for determining sales methods and strategies, advertising, etc. Sylvania, duPont, Sohio among others are doing some of this.

3. Planning and Decision Making

   a. Ability to mate ,routine decisions in eases where all the factors can be rigorously specified and where the decision is the function of an established policy. Such decisions may vary in complexity from automatic replenishment to those involving complicated functions. This automation of routine decision making can release managerial talents for decisions involving intangible factors. .

   b. Ability to test or simulate operating conditions by the use of mathematical models to aid managers by determining the probable consequences of alternative methods of operation.

4. Communications

   a. Be the nerve center of an electronic communications system linking all the essential or important elements of the distribution systems.

An example of this is the American Airlines Reservation Inventory Control and Flight Information System. It consists essentially of a Teleregister Corporation special purpose computer, storage and filing system, data transmission system, and agent input-output units.

With it any agent can almost instantly

   (a) Obtain information en available space

   (b) Make reservations for available space 

   (c) Make cancellations of any reserved space

   (d) Obtain flight information on any flight

This results in better service than would be possible

manually, with the saving of about l0 per cent over manual cost,.

5. Measurement

   a. Using statistical and mathematical methods. weight the factors entering into results obtained from managerial and individual contributor performance s. advertising promotions , sales  techniques. etc. This to mate possible objective 'evaluation of performances and results for use in planning, quota and compensation setting and inventory control.

In short, marketing, which is essentially a job of communications, finds itself in a position to make great strides forward by using these revolutionary advances in data processing.