The role of IT in the reshaping of marketing

Fiona Leverick
Robert Gordon University, Aberdeen, UK

The role of IT in the reshaping of marketing 87

Dale Littler and Dominic Wilson

Manchester School of Management, UMIST, Manchester, UK, and

Margaret Bruce
Department of Textiles, UMIST, Manchester, UK
Introduction If recent assertions are to be believed, the pace of implementation of Information Technology (IT) within organizations would appear to be relentless and its scope pervasive, with extravagant claims made in terms of ITs organizational benefits such as increased efficiency and higher levels of customer service. In particular, much literature has focused on the power of IT to facilitate and accentuate dramatic changes in organizational structures. Management practices associated with the increased utilisation of IT, such as business reprocessing, downsizing, the boundaryless organization and the knowledge based enterprise, have become a significant part of organizational language (see, for example, Quinn, 1992). IT has also been said to facilitate the way in which information is processed, with the potential to change the way in which decision making is undertaken, and even to effect a shift in the nature and scope of activities undertaken by the business. For example, IT at least promises dramatic repercussions for the form and content of inter-organizational relationships as well as intra-organizational communication; the bases on which organizations compete; the means of production; the process of distribution and service support; indeed for almost every aspect of accepted organizational activity. In reality, whether radical organizational changes have truly occurred alongside the implementation of IT systems is not clear. Few would disagree, however, that IT, because of the speed with which it can process, analyse and transmit huge amounts of data and present these in palatable, convenient and specific ways, offers at least the potential to facilitate significant change in the way in which organizations are structured and undertake activities. The extent to which these changes are realised and the form they take is likely to flow from a continuing process in which a number of parties, including, of course, IT suppliers and end users, play a role.
This paper is based on research financed by the Economic and Social Research Councils Programme on Information and Communication Technologies (PICT).
Journal of Marketing Practice: Applied Marketing Science, Vol. 3 No. 2, 1997, pp. 87-106. MCB University Press, 1355-2538

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It is the various organizational changes and refigurations potentially flowing from the implementation of IT which are the focus of this paper. These changes will be considered by addressing a particular area of organizational activity, that of marketing. This immediately raises the question of whether the use of IT in marketing is significantly different in any way from the use of IT in other functional areas of business and whether or not there are unique questions posed. Here, the focus on marketing is not to imply that it necessarily does possess uniqueness as an organizational activity. Rather, it stems partly from the interests of the authors, and partly because marketing, through its acknowledged position at the interface between the organization and its external environment, offers the ability to study the effects of IT on the relationship between organizations and the environment within which they operate. The remainder of this paper will explore the possibilities IT opens up for marketing and the extent to which shifts and changes in the nature and scope of marketing have occurred alongside the implementation of IT systems. Three areas in particular will be considered: changes in the nature of marketing activities; changes in the nature and use of marketing information; and changes in the structure and organization of the marketing function. The discussion draws both on existing literature and on a programme of empirical research undertaken by the authors in the UK as part of the Economic and Social Research Councils Programme on Information and Communication Technologies (PICT). A brief summary of research methods follows. Research methods The empirical research drawn on in this paper was a study of the use of information and communication technology by the marketing function. Its primary aims were: (1) To document the extent of ITadoption and the tasks for which IT is currently being used in marketing. (2) To investigate the changes in the scope of marketing activities and the manner in which they are carried out as a result of IT implementation. (3) To identify barriers to and driving forces towards the implementation of IT systems in marketing. (4) To examine likely future shifts in the nature of the marketing function occurring alongside the implementation of IT. These aims were addressed by a number of different and complementary research methods. In this paper, we draw primarily on the results of a Delphitype mail questionnaire survey of marketing practitioners undertaken between May and October 1994. The survey was undertaken in two stages. In the first stage, the aim was to collect as wide and unbiased a range of views and experiences of IT in marketing as possible. To this end, relatively unstructured initial questionnaires were sent to a sample of 100 UK based organizations in

sectors including financial services, consulting services, food and drink, public The role of IT in utilities and consumer electrical goods. Organizations in these sectors were the reshaping of selected at random from the Kompass trade directory. The questionnaire marketing required respondents to express their views in relation to a series of open ended questions dealing with their organizations current use of IT in marketing; accompanying changes in the nature and scope of marketing activities; the 89 current and likely future barriers to and facilitators of increased IT use in marketing; and their organizations projected IT use over the next two to ten years. The questionnaire was addressed to the marketing director in each case. 34 usable responses were received, a response rate of 34 per cent. A second stage questionnaire was then developed which consisted of a series of statements derived from the views expressed in the first stage questionnaire. The questionnaire was sent to the original 34 respondents, who were invited to express the extent to which they agreed or disagreed, using a Likert scale, with the statements listed. 29 of these made usable responses. In order to test the extent to which the questionnaire findings were applicable to a wider population, the second stage questionnaire was also sent to a further sample of 300 UK based organizations in the food and drink, consulting and leisure services, chemicals and engineering sectors, again drawn at random from the appropriate sections of the Kompass trade directory. 82 usable responses were received, a response rate of 27 per cent. In total, then, the findings presented here are derived from these 82 respondents and the 29 respondents referred to above, making a total of 111 organizations. In addition to the questionnaire survey, other components of the research have included qualitative personal interviews with IT users and suppliers and a further mail questionnaire survey aimed at discriminating between more and less effective IT applications. The results referred to here are by necessity only a snapshot of the findings. For a more thorough examination of both the research methods and results, see Leverick et al. (1995a, b, c and d); Littler and Leverick (1995), Leverick et al. (1996) and Morris (1995)[1]. IT and marketing IT and the marketing function Received wisdom would appear to suggest that only those organizations which fully embrace IT for their marketing applications will be able to compete effectively. Indeed, as long ago as 1988, Warren MacFarlan, Dean of Studies at Harvard Business School (quoted in Shaw, 1994a, and Gorski and Ingram, 1993) predicted that:
In five years there will be two types of company those who (sic) use the computer as a marketing tool and those who face bankruptcy.

Given statements such as this, it is perhaps not surprising that the adoption of IT for marketing applications has received much contemporary consideration (see Bowles, 1995; Gorski, 1995; Li, 1995; Talvinen, 1995; Chapman and Holtham, 1994; Hewson and Wilson, 1994; Palihawadana and Delfino, 1994;

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Woudhuysen, 1994), or that there has been significant investment in IT for marketing purposes. According to Shaw (1994b), UK expenditure on IT to support sales and marketing totals around 1.5 billion, which accounts for around 15 per cent of total IT expenditure by organizations, and is one of the fastest growing areas of IT investment. Various explanations have been forwarded for such substantial expenditure on IT in marketing. Like IT investments more widely, it may be driven by obvious environmental imperatives: the technology itself which excites interest by its very availability, as well as the promises it offers; the constant search to increase efficiency because of the impact of inter alia lower cost competition; the apparently increasingly rapidly changing marketing environment coupled with the corresponding growth in marketing information available to organizations; consumer demand for higher quality products and services; as well as pressure on organizations to improve customer service (see, for example, Baker, 1994; Hewson and Wilson, 1994; Conway and Elliott, 1994; Palihawadana and Delfino, 1994; Sksjrvi and Talvinen, 1993; Noyak, 1991). It may equally be the case that IT has come simply to be regarded as a prerequisite for competitiveness and this belief has itself fuelled developments in IT. Almost inevitably, suppliers will generate much hype in order to create a climate conducive to the greater acceptance of IT in marketing. Whatever the reasons for the heralded IT revolution in marketing, the apparently radical benefits flowing from its application have understandably captured the attention of practitioners and academics alike (Mazur, 1991; Fletcher, 1995; Wilson and McDonald, 1994). Fletcher (1995) highlights the benefits of IT for enhancing personal productivity; while Wilson and McDonald (1994) point to the benefits of IT based decision support systems. Others have noted its use to develop and augment relationship marketing (Schmitz and Rovner, 1992); and to improve the effectiveness of sales and promotion (Hewson and Wilson, 1994); as well as a means to improve product development. IT has been acknowledged as a source of product and service innovation; and more generally for improving the efficiency of marketing tasks and the decision making processes because of its ability to manage large volumes of data at greater speed (Fletcher, 1995; Arnold and Penn, 1987; Wightman, 1987; Kumar and Vrat, 1989). IT and the nature and scope of marketing Various authors have, however, gone further and looked at the types of organizational change, and the shifts in the nature and scope of marketing, that might occur during and following the process of implementing IT systems. It is worth noting at this point that there is much marketing literature referring to what is termed the impact or effect of IT on organizations, suggesting a oneway process in which IT is seen as an external force somehow impacting upon existing organizational processes. While the implementation of IT systems clearly has the potential to set in motion a number of, possibly quite radical, organizational changes, viewing these changes as clear cut events

caused by the impact of IT systems might be inappropriate. The introduction The role of IT in of an IT system in any part of an organization is a complex process. It is the reshaping of introduced by and affected itself by individuals within and outside the marketing organization: numerous stakeholder groups which themselves impinge on and shape the direction and content of the IT system and the resulting process of organizational change through a continuing process of negotiation and re91 negotiation. Concerns might also be raised over the direction of causation: it may be equally valid to suggest that organizational change itself impacts upon the nature and scope of IT systems as it is to conceptualise IT as causing organizational change. Setting aside such questions over the direction of causation, a number of writers have identified themes concerning the implementation of IT and the accompanying changes in the nature and scope of marketing. Fletcher (1995) refers to two major areas in which IT might shape marketing processes: changes to the marketing system, allowing, for example, the development of new products; and changes in the manner in which information is managed, potentially allowing for increased efficiency in marketing management tasks. Martell (1988) charts three major areas of change in which IT plays a major role: observable effects (changes in the manner in which marketing mix variables are employed); invisible effects (changes to the size and structure of the marketing function) and information effects (enabling the handling of higher volumes of and more complex marketing information). It is these themes with which this paper is concerned and in the remainder of the paper, each of the areas of change identified by Martell will be considered in turn. Changes in the manner in which marketing mix variables are employed. The areas in which IT systems can be applied to marketing are considerable and varied. Applications range from what Fletcher (1995) terms as personal productivity tools (spreadsheets, word processing and simple customer databases) to, for example, more sophisticated decision support systems (Wilson and McDonald, 1994). Higby and Farah (1991) and Shaw (1994b) have attempted to list the potential marketing applications of IT. Higby and Farah list applications including customer profile analysis, sales forecasting, budgeting, inventory control, order processing, pricing decisions, competitive analysis, price quotes, sales force analysis and statistical analysis, although some of these are clearly not applications unique to marketing. Shaw distinguishes between sales related applications, such as sales reporting, sales forecasting, sales order processing, product databases, lead tracking, telemarketing and sales route planning, as opposed to marketing related applications, such as customer databases, market research, competitor analysis and promotion campaign management/tracking. Baker (1994, p. 26) refers to Melkmans (1989) distinction between four broad areas of IT application to marketing activities, although the categories do not appear to be entirely clear cut:

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(1) IT to enhance operating efficiency. The application of IT to marketing activities already carried out in the organization, such as the maintenance of customer records; budgeting; preparing and making presentations; or analysing sales statistics. (2) IT and changed methods. The application of IT to enable the marketing department to carry out internal functions which were not possible before often extending (1) above using databases for segmentation and positioning studies; more sophisticated forecasting and modelling; better and faster communication with a field sales force. (3) IT for enhancing customer service. The use of IT to provide better and faster communication with customers; using customer data to reach conclusions on changing market needs and preferences. (4) IT and marketing innovation. Including the use of on-line databases; direct mail services; external segmentation packages such as MOSAIC and ACORN; and the provision of electronic banking services. Recent research, however, has suggested that far from the radical transformation of marketing promised by IT, the use of IT for marketing has thus far focused primarily on the routine and tactical; activities such as database management systems providing facilities including sales lead tracking and order taking (Hewson and Wilson, 1994). Indeed, it has recently been argued that the utilisation of IT per se by the marketing function is still a relatively recent phenomenon and is by no means as widespread as is sometimes claimed. Based on a survey of 65 organizations in the North-East of England, Palihawadana and Delfino (1994) described the use of IT for marketing as still quite patchy. They also concluded that IT for marketing was in its infancy (see also Shaw, 1994a), with all 65 respondents having adopted IT for marketing within the last five years. In addition, around half of these respondents stated that as a result of adopting IT, marketing practice had altered only a little or not at all, although clearly this finding has to be treated with some caution, given that marketing practice may have been driving the type of IT adopted and not vice versa. Kench and Evans (1991) reported that the extent of IT adoption for marketing varied considerably between organizations, dependent to an extent on company size and on dominant corporate culture. Our own empirical research produced similar findings (see Table I). The most frequent use by far of IT among the sample of 111 marketing respondents was to keep a database of existing customers (96 per cent of respondents), although quite clearly the nature of the database in question and the uses to which it is put are likely to vary considerably. The use of IT to analyse performance was also common, 81 per cent of respondents breaking down sales figures and 72 per cent performing product line analysis through IT. Other important uses of IT were in forecasting sales and profitability (78 per cent) and analysing survey data (67 per cent).

Application Keeping a database of existing customers Analysis of sales by market Aiding the marketing planning process Sales forecasting Profitability forecasting Product line analysis Analysing survey data Automation of the order processing process Direct mail Inventory management Customer segmentation Monitoring sales staff performance Analysing the effectiveness of promotional spend What if analysis Internal electronic mail communications Electronic funds transfer Tracking competitors Remote access to office systems for sales staff Electronic data interchange with customers Distribution management Electronic data exchange with suppliers Electronic data interchange with other business partners Product design Tracking customer attitudes Providing product information at POS for access by sales staff Sales force route management Providing product information at POS for access by customers n = 111

Per cent of respondents 96 81 79 78 77 72 67 66 64 64 59 58 57 51 51 49 44 42 40 40 35 34 34 33 33 26 13

The role of IT in the reshaping of marketing 93

Table I. Current use of IT

IT was also extensively employed in promotion, for direct mailings, presumably with more specific targeting; for customer segmentation and for assessing promotional effectiveness. Other less common uses of IT were to track competitors and customer attitudes, predominantly among the larger organizations; to provide product information at point of sale; and in the design of products. Our empirical research also examined the manner in which IT might be used in the future, asking respondents, in the two stage Delphi-type survey, to predict the nature of IT use within their organization two and five to ten years hence (see Table II). Here, at least, some extension in the range and

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Application Calculate profit contribution of specific products Calculate profit contribution of specific customers Direct marketing Customer segmentation Gather on-line external data Enable off-site working practices Calculate optimum price levels Measure promotion effectiveness Communicate on-line with field sales people Project management Electronic data interchange with customers Electronic funds transfer Electronic data interchange with suppliers Customer contact staff have on-line access to customer database Electronic data interchange with business partners Provide product information at point of sale for access by sales staff Customer lead tracking Administrative staff reductions Provide product information at point of sale for access by customers Electronic data interchange with retailers IT driven direct marketing most common promotional method Decrease external agency use Extended availability hours to customers Marketing staff reductions Increase external agency use IT driven telemarketing primary distribution channel n = 111

Now (%) 60 58 56 46 38 22 42 43 26 44 34 41 21 36 21 32 24 36 10 20 15 29 11 14 15 5

Within 2 years (%) 34 34 21 34 31 34 35 32 36 31 27 28 41 27 38 26 41 22 27 31 23 12 29 16 16 8

Within 5-10 years (%) 6 5 18 16 27 38 17 16 30 17 29 21 26 24 26 28 19 17 35 18 26 21 11 17 5 16

Not within 10 years (%) 3 4 4 4 6 6 9 9 9 10 11 12 13 14 15 15 25 28 31 36 37 47 54 65 72

Table II. Projected use of IT

sophistication of applications was envisaged. IT driven direct marketing was predicted by 95 per cent of respondents within five to ten years, with 64 per cent anticipating that it would be their most common promotional method in that period. Within two years, many considered that IT would be used for specific product and customer analysis (94 per cent and 92 per cent respectively); 77 per

cent to calculate optimum price levels. It was also envisaged that IT would be The role of IT in employed more to augment offerings and to improve the efficiency of the reshaping of transactions with customers and suppliers through the use of EDI. marketing All of these uses, however, might still be seen as relatively continuous: they do not involve particularly dramatic transformations in the nature and scope of marketing activities. Rather, they are themselves an extrapolation of existing 95 practice; whereas in theory at least IT offers much more dramatic possibilities: for example, those of radically affecting the form and scope of marketing as an organizational activity, the execution of the essence of marketing itself, namely, an intimate empathy with customers and users, and the interrelationship of marketing with a variety of external actors. Indeed, the scope for reshaping, redefining and restructuring marketing in an organization is possibly as wide as imagination allows. The gathering, systemisation and analysis of customer data permits consistent monitoring of attitudes and behaviour, the highlighting of sales opportunities, creative segmentation and specific targeting of sales messages. Strategic marketing can be enriched by more extensive scenario development and assessment. Information on individual customers is increasingly available and the emphasis could increasingly be on managers of customers who take on board a wide range of customer related responsibilities. Such conceptualisations reflect the increasing emphasis in marketing literature on so called relationship marketing (Schmitz and Rovner, 1992). Take this to its logical conclusion and the boundaries between organizations become increasingly blurred: the concept of the roving manager focusing on contact with specific customers is already a possibility. Space, territory, property and distance in the world of work may become increasingly redundant. This discussion again raises the question of whether such changes in the nature and scope of marketing are made possible by developments in IT or whether the developments in marketing practices themselves shape the nature and scope of IT systems. Furthermore, IT not only permits the development of innovative offerings, as already mentioned, but also can alter their means of development. For instance, IT enables the canvassing of a wide spectrum of consumer opinion to a variety of product designs; it even allows consumers to participate in product design; and, of course, IT allows manufacturing to respond to customer requirements, perhaps tapped in at the point of sale. Such experimentation can be extended to the development of, for example, store interiors; although the traditional concept of the store may be replaced, or more likely augmented by, innovations in distribution, such as the virtual store (Buckley, 1995) and other forms of generally home bound shopping. Nevertheless, many of these more adventurous IT applications apparently remain to be exploited. At this juncture, it perhaps worth noting that a priori it could be expected that there will be significant diversity in IT application and practice. The competitive process in itself stimulates variety as individual players seek advantages over their rivals through innovation, such as the pioneering investment or the adoption of new technologies, techniques and products. Even

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so, over time a conformity may be established as those practices which are seen to be more effective become widely known and accepted. However, the history of innovation in any case clearly indicates that diffusion of new technologies and the extent of their usage can be spread over many years. There is not a spontaneous awareness of the technology by all of the various actors in the social system to which it applies it naturally takes time for it to diffuse and for it to be perceived of as relevant and significant; whilst resource differences, previous commitments and varying external stimuli, such as competitive pressures, can all have an impact (Rogers, 1983). Furthermore, existing research has noted a number of barriers to the adoption of IT for more than routine and unadventurous marketing tasks. Business Intelligence (1990) lists poor appreciation at board level for the potential of IT for marketing; difficulty in justifying expenditure on IT on strategic grounds; and poor understanding of marketings requirements by IS departments; although many of these factors could clearly apply to the adoption of IT per se and are perhaps not specific to marketing. Palihawadana and Delfino (1994) report similar findings, identifying defining managers needs; resistance to change (although it is not clear whether what is meant here is resistance to change per se, or resistance to IT); obtaining reliable information; educating users; and budget constraints as major barriers to the adoption of IT in marketing. Our own empirical research also asked respondents to indicate the extent to which they had experienced barriers to the implementation of IT systems for marketing in the past and the extent to which these were likely to continue in the future. Only 21 per cent of the 111 respondents to the Delphi-type survey considered there to have been no major barriers to the adoption of IT for marketing purposes in the past, although 58 per cent felt that there would be no major barriers over the next five years or so. The various potential barriers identified by the remaining respondents are listed in Table III and were categorised by the researchers as technological barriers, organizational barriers, and personal barriers. A number of further barriers were identified which did not fall neatly into any of these categories and these are listed separately under the heading other barriers. As Table III shows, among the many other perceived barriers, the simple issue of IT skills comes into play. 69 per cent of respondents who did experience barriers had found the lack of information technology skills among marketing staff a major barrier to implementing IT in the marketing function, making this the third most frequently mentioned barrier noted overall, behind software and hardware limitations. Somewhat surprisingly, 52 per cent of respondents who anticipated longer-term barriers considered that this would continue to be a major barrier over the following five years making it again the third most frequently mentioned barrier, this time behind hardware and software costs. This appeared to be an issue across the spectrum of respondents and was not common to any particular size of organization or sector. As one respondent stated:

Barrier No barriers

Now (%) 21 Of the remaining 88 respondents

Next five years (%) 58 Of the remaining 47 respondents 38 23 76 72 44 30 36 18 33 52 * 29 14 13 * 20 31 18 n = 47

The role of IT in the reshaping of marketing 97

Technological barriers Limitations in available software Limitations in available hardware Hardware costs Software costs Organizational barriers IS function does not understand marketings needs Marketing function is a low priority for IT investment Organizational culture of resistance to change Organizational culture of resistance to IT Lack of top management commitment to IT Personal barriers Lack of IT skills among marketing staff Lack of an IT champion Resistance of other organizational functions to data sharing Resistance of marketing staff to IT Resistance of marketing staff to data sharing Other barriers Obtaining access to relevant information Unsuitability of creative activities to IT Fast pace of change in the marketing environment Customer resistance to information provision

73 73 66 54 48 45 44 35 35 69 44 36 27 14 48 27 * * n = 88

Note: Where * appears, the factor was not listed in the questionnaire survey as it was not mentioned by any of the respondents to the first stage open ended questionnaire. No figures are therefore available.

Table III. Barriers to IT use

Getting marketing staff to use end user computing is a problem as they have been traditionally kept at arms length from IT and its uses. Survey Respondent, Financial Services.

Perhaps then, for a combination of the reasons above, the somewhat unadventurous application of IT among the majority of our own research sample is unsurprising.

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Changes in the nature and use of marketing information. The information effects identified by both Fletcher and Martell are a consistent theme in much IT literature. In particular, the beneficial ability of IT to manage increasing volumes of data at increasing speeds is frequently referred to. The assumption is often made of a linkage between increased quantities of information and improvements in the decision making process (Arnold and Penn, 1987; Wightman, 1987; Kumar and Vrat, 1989). Other research, however, has questioned whether this is, indeed, the case. The necessary focus of IT systems is primarily on what Hackner (1988) terms as hard information (numerical information which can be quantified and processed), about which, he states, it is rarely possible to solve ill-structured or messy problems only by gathering and analysing vast volumes of hard information. (p. 48). Much managerial decision making is clearly reliant on softer influences such as intuition, managerial experience, ideas and visions. Stevenson et al (1990) similarly warn that marketing information systems lack the elementary creativity and imagination characteristic of human decisions. Further, there is little evidence to suggest that increased information reduces the uncertainty present in business decision making (Foxall, 1981), on the contrary, it may be that more information could actually increase uncertainty, especially if it proves to be contradictory, as can be the case (Leverick and Littler, 1994). In our own empirical research, respondents were asked to indicate whether the implementation of IT in the marketing function had been accompanied by any changes in the nature and scope of marketing activities. The results of this are shown in Table IV. Only 15 per cent of the 111 respondents to the Delphitype questionnaire reported no changes in marketing activities alongside the implementation of IT systems. Among the remainder of the respondents, the nature of the changes noted were numerous and wide ranging but three broad areas of change were identified by the researchers and we termed these activity changes, information changes and organizational changes in line with Martells (1988) typology. Concerning information changes, a variety of observations and opinions relating to the use of marketing information were recorded (see Table IV). Over 90 per cent of the 111 marketing professionals surveyed reported that following the implementation of IT systems, they were handling an increased volume of information and that the quality of this information had improved, although the precise manner in which this had occurred was less clear. 77 per cent of respondents reported that increased credibility was given to the results of analysis undertaken through IT systems, perhaps not surprisingly, given the ability of IT systems, compared to alternative analytical systems, to process vast and complex data with rigour, at speed, and in detail. 29 per cent of respondents considered that the implementation of IT systems had been accompanied by an over-emphasis of quantitative over qualitative data; and 25 per cent reported an increased reliance on IT. IT can enhance

Change Little or no change in marketing practice

% of respondents 15 of the remaining 85 per cent of respondents

The role of IT in the reshaping of marketing 99

Activity changes Improved efficiency Focus on profit contribution of specific customers/products Increased accuracy of customer targeting Made marketing more scientific IT systems shape way some activities carried out More equitable setting of branch sales targets Marketing decision making takes longer Information changes Increased volume of marketing information Improved quality of information Increased credibility given to results of analysis Over-emphasis of quantitative data over qualitative data Reliance on IT at expense of intuition and judgement Organizational changes Enhanced status/visibility of marketing function Increased demands on marketing by other functions Marketing controls activities previously carried out by others Less administrative staff employed Greater decentralization of activities Less marketing staff employed Decreased scope of activities carried out by marketing n = 111

87 83 74 68 65 46 11 91 90 77 29 25 59 59 47 42 34 20 9

Table IV. Changes in marketing practice following adoption of IT

scenario planning, which requires judgement and intuition to interpret. This point is made in the following statement by one of the survey respondents:
It is important to remember that people operate businesses. IT is a tool to run the business more efficiently not the other way round. Information must have a qualitative interpretation by the relevant manager. (Survey Respondent, Food Retailing Sector).

27 per cent of participants in the research suggested that the unsuitability of creative activities to IT systems was a barrier to the usefulness of IT for marketing (see Table III), consistent with the proposition, found in some marketing literature, that IT may somehow stifle creativity. Yet it should not be

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accepted without question that IT inevitably constrains creativity simply because it generates primarily quantitative information. IT systems do clearly tend to legitimise a certain language, as defined by architects of the system, and this is likely to influence power relationships within an organization. However, this is another issue. Whether or not IT constrains creativity must surely be dependent on the manner in which it is utilised; indeed, if users so wish, IT systems have the potential to allow for more creativity than would previously have been the case. As has already been discussed, IT can be used to generate a wide array of product concepts for customer assessment, produce many and varied scenarios for evaluation in marketing planning and so on. Moreover, there is no reason to conclude that attributes such as creativity and intuition should be ignored just because an IT system is in place. How IT is employed is very much dependent on the imagination of those involved in development, design and implementation. While not necessarily stifling creativity, the contribution of IT to decision making may however be constrained because of its requirements for structures, logic and selective data types that may only reflect a portion of intelligence employed in some decision contexts, especially those with more strategic and innovative dimensions. Not only can IT systems fail to capture the variety of intelligences that are drawn on by individual decision makers to form idiosyncratic impressions that shape the manner and form of decision making, but also they cannot embrace the socio-political context within which major decisions are formulated and implemented and which itself may shape the data employed and the manner in which the marketing information system is employed. At best, IT may only assist the existentialist nature of much managerial behaviour. Changes to the size and structure of the marketing function. A third area of change to which IT has been frequently linked is that of changes in organizational structure, for example the flattening of organizational hierarchies. We confine ourselves here primarily to changes in the composition and structure of the marketing function and its position in the organization as a whole. The potential for IT to become part of a process of reshaping in marketing activity has already been discussed. However, IT can be perceived as part of a wider process of adaptation and redefinition of organizations operating in an environment where there are powerful drivers to reduce costs and where there is an awareness of the opportunities IT raises with a tendency for competitors to exploit them. As Martell (1988) states, institutions can be viewed as complex information systems which connect people in a myriad of economic and social relationships and organizations are looking for structural forms which provide quick, flexible strategic responses to the constant changes in the marketplace. One question which arises in relation to this is whether or not there will be an erosion of the influence of marketing and of the marketing professional. This clearly could happen if a dominant paradigm of how IT should be used emerges and this is to use IT to allow the widespread dissemination of market

and customer information and a consequent flattening of the organizational The role of IT in decision making structure. Customer information can be accessible to all those the reshaping of who interface with customers; all can now be part-time marketers and the marketing integrity of the professional marketer and the marketing function may be increasingly challenged as marketing information is widely distributed throughout the organization and the power accorded to marketing by 101 contemporary market grounded ideology eroded. As Martell (1988) states, it may be that more effective information dissemination throughout the organization is bound to decrease dependency on the marketing department. The question then, according to Martell, is if and how marketing can retain its central position in the organizational network as the interface function between the organization and its customers. Our own empirical research provides some indication of the pertinence of these issues. 36 per cent of respondents had already made reductions in the numbers of administrative staff employed in marketing, apparently as a result of the adoption of IT, and 14 per cent had made reductions in staff numbers in other areas of marketing (see Table II). It is clearly difficult to attribute staff reductions to a single cause and it is perhaps unwise to read too much significance into these figures. However, they do appear to constitute a trend, especially in the light of further staff reductions predicted by respondents for two and five to ten years hence. It was also predicted that there would be an increase in the use of outsourcing, especially among service sector businesses and relatively small businesses, with, in particular, employees providing services via IT from home. Indeed, 94 per cent of respondents expect to use information technology to enable such off-site working within five to ten years. In addition, 34 per cent of respondents considered that the adoption of IT had been accompanied by greater decentralisation of activities within the organization, with an accompanying devolution of responsibility (see Table IV). The picture presented was not completely conclusive, however. 47 per cent of respondents considered that IT and the accompanying process of change had enabled marketing to control activities previously undertaken by other organizational functions and only 9 per cent of respondents considered IT to have decreased the scope of activities undertaken by marketing (see Table IV). Indeed, 59 per cent of participants in the research stated that the adoption of IT had increased the demands made on marketing by other organizational functions. Certainly some of these findings imply a degree, at least, of blurring of traditional functional divisions within organizations. Martell (1988) suggests the consequent need for both an organization and information strategy to answer such questions as: Should there be a marketing department? If so, positioned where and adopting which role? What degree of centralisation or decentralisation is applicable? What structure should be adopted?

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What data are required? What can be automated?

Yet to assume that the power of the marketing function will somehow be eroded as a result of increased dissemination of information within the organization is to make at least one major assumption: that information sharing through IT systems is itself unproblematic. This is clearly not the case (see, for example, Davenport, 1994). The proportion of respondents to our own survey considering the unwillingness of other staff to share data with colleagues to be a major barrier to the effective use of IT in marketing was of some interest. 36 per cent of respondents agreed that the resistance of other organizational functions to share data with the marketing department was a major barrier; 14 per cent of respondents had found the reluctance of marketing staff to share data with their own colleagues to be a problem (see Table III). The issue reduces only marginally in importance when the findings in relation to the next five years are considered. Although rarely mentioned in the literature on IT in marketing, these findings are in line with those of Conway and Elliott (1994). The issue of data sharing also emerged from the personal interviews undertaken, with one organization, for example, noting the reluctance in particular of salespeople to share data with others through a central sales IT system.
One of the problems was getting co-operation from people who actually handle contacts, their leads if you like, [to take them] across to a common pool. Part of the reason its difficult is that you have to persuade people that the information once handed across is actually of value and theyre going to get value back from joining this common pool of shared knowledge. Its been a question of hammering away, hammering away and I think as new people come into the company they accept the systems [and] you get a turnover of staff [too]. Survey Respondent, Consultancy Sector.

The outcome of this debate is not yet clear. It may be that marketings role is indeed eroded by the increasing dissemination of marketing and customer information throughout the organization, although for this to occur, there are clearly a number of barriers to be overcome. On the other hand, it may be that marketing is able to retain its position in the organization by adopting the role of guardian of the customer orientation, taking responsibility for defining the form and content of information that is an acceptable basis for organizational discourse. Conclusion The purpose of this paper has been to examine the various issues associated with IT implementation and its relationship to changes in the nature and scope of organizational activity. This was undertaken by considering these issues in relation to the marketing function. Three areas in particular were addressed: changes in the nature and scope of marketing activities; changes in the nature and use of marketing information; and changes to the role and position of

marketing within the organizational framework. Clearly these issues are inter- The role of IT in related, at least to some extent. the reshaping of Concerning the first of these three areas, it might be concluded that IT has, marketing up to a point, created new opportunities and led to marked changes in the role of marketing, the range of marketing activities performed and the manner in which these are undertaken. In terms of marketing activities, of particular note 103 were the major shift in emphasis from advertising to IT driven direct marketing and the growth of electronic communication, both within and between organizations. Indeed, IT driven telemarketing is firmly on the agenda with 29 per cent of respondents expecting this to become their priority for distribution within five to ten years (see table II). In other words, IT can influence a redirection of effort by changing the economics and effectiveness of what is feasible - direct marketing can be more focused to lead to more effective relationship marketing, some might argue. The impact of IT on the nature and quality of marketing decisions may also be significant. IT provides a wider range of information for decision-making but may in the process eclipse intuition, creativity and experience with a structured set of quantitative data electronically processed which may be given higher credibility per se. In addition, customer related intelligence may become more widely disseminated and so not remain the exclusive property of marketing, the implications of which could be widespread. Indeed, marketing itself might undergo a process of reconfiguration within the organizational setting. A major challenge to the marketing function comes from the restructuring towards customer oriented management. This, coupled with the more widespread dissemination of customer intelligence, could lead to other areas that interact with customers potentially taking over some of marketings tasks. This may broaden the scope of marketing within the organization but weaken the function of marketing. In our research, 14 per cent of respondents reported that information technology had already lead to marketing staff cuts and a further 33 per cent expected marketing staff reductions as a direct result of IT within five to ten years. Staff reductions were apparently accompanied by other trends in the organization of marketing, such as a flattening of the structure of the marketing function, with fewer decision-making layers, more extensive part-time and contractual arrangements, and increased teleworking. The future of marketing as a core organizational activity may also be eroded by off-site working and 84 per cent of respondents expected to use IT in this way over the next five years. The full impact of these changes is not yet clear. At one end of the spectrum of possibilities, it may be that they lead to marketing becoming more entrepreneurial; at the other end, it may mean an increase in formal procedures, as executive control is exerted over such new organizational forms. Another possibility is that marketing as a centralised function ceases to exist as some marketing tasks are diffused through the organization, or these are taken over by other newly emerging specialist areas, such as Customer Services.

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To conclude, it is clear from our research that the nature and substance of marketing is undergoing change, although there is little evidence as yet of the radical changes predicted in some quarters. Clearly IT has an active part to play in this reshaping, and it is likely to continue to do so in the longer-term. However, the extent of ITs role may be tempered by the time taken for IT to be perceived as relevant and significant. Resource issues, previous commitments and external forces, such as competitive pressures have an effect on the adoption of IT, in addition to the internal factors discussed in this paper. Much clearly depends on how the use of IT for marketing is interpreted and implemented by the various role players within the organization and this depends on their agenda. The acceptance and implementation of IT is undertaken within a complex selection environment of competing claims and preferences. That together with the dominant organizational culture, will affect the expression of IT as it emerges within the organization.
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