'n Prysbesluitsteunstelsel vir die kunsmisbedryf
Jacobs, Andries Johannes
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1. INTRODUCTION: With the production and marketing processes in the fertilizer industry under pressure, price is being seen as the only variable of the marketing effort that can generate income and for that reason it is being closely examined under the magnifying glass. In the fertilizer business milieu where competition become more and more intense the demand for correct and timely price decision making is increasing, in order to deal with the complexity and degree of difficulty of factors such as: cost orientated pricing, price examination according to market change in conjunction with other marketing instruments and price variances according to product and market segments. The effect of the pro-active strategic and tactic approach towards price decision making is that fertilizer producers require specific action orientated information regarding the different pricing activities. The fact that price decision makers in the fertilizer industry have no access to computerized and integrated decision support systems, means that decision support functionality such as the following is absent: human interaction with the manipulation of data, ease of data gathering, the use of financial and statistical models and the selection of alternatives for timely decision making. This abstract provides an overview of the study and is organized as follow: ASTRACT: Objectives of the study -> Method of research -> Findings -> Conclusion. 2. OBJECTIVES OF THE STUDY: 2.1. Primary objective: The objective of the study is to provide a functional user specification for a price decision support system (with the focus on the user interface and satisfying of the functional business process requirements) that will provide specific action orientated information to support the price decision making process in the fertilizer industry. 2.2. Secondary objectives: The following secondary objectives can be outlined in support of the primary objective: • To investigate the theoretical concepts of decision support systems, in order to provide that part of the application that is visible to the user and act as basis for technical design phase; • To investigate the theoretical principles of the price decision making process that is focused on the understanding of the application domain; • To investigate the theoretical principles of the price decision making process activities, such as: market segmentation, price objectives, price variables, pricing methods, price policies, and price adjustments in order to assure completeness of user requirement specifications and that design is according to functional and quality specifications, and • To investigate the existing price decision support systems in the fertilizer industry, to secure user consensus regarding the objectives of the price decision support system and to ensure ownership for the user specifications. 3. METHOD OF RESEARCH: 3.1. Literature: Investigations to date have revealed that no formal functional specification regarding a price decision support system for the fertilizer industry exists. Information system orientated methodologies regarding functional information system specifications is commonly available in information system literature. Marketing orientated price decisions is also available in literature. The focus of this study is to contribute to the subject discipline by integrating the information system and marketing disciplines. In the literature study the focus was on decision support systems, market segmentation and price objectives, price variables, pricing methods, price policies, price adjustments and models. 3.2. Empirical study: An empirical study was conducted to gather information regarding: the socio-demographic characteristics of fertilizer suppliers and price decision makers; the format in which fertilizer price decision maker use price decision support systems and the degree to which the theoretical concepts regarding decision support systems, price and price decision making has been applied in the fertilizer industry. The objective of the empirical research was not aimed at determining the relationship between the different price decision making activities in the price decision support system. 3.3. Study population: The population for the empirical research comprises of fertilizer producers and blenders of produced fertilizer in the Republic of South Africa. The target population can be described as fertilizer producers (both producers and blenders) that make use of price decision support systems. All 20-fertilizer producers were included in the empirical research. From a provincial perspective the target population included the following provinces: Gauteng, North West, Northern Province, Mpumalanga, KwaZulu-Natal, Eastern Cape and Western Cape. Swaziland and Lesotho were also included. The response rate was 90 percent. Questionnaires valid for data-analysis and processing were 75 percent. It must be emphasised that the 90 percent response was achieved after questionnaires for a second time was distributed to 50 percent of the respondents. 4. FINDINGS: In order to provide facts that clarify the study opportunity description, findings are focused on the following: FINDINGS: Price decision support systems -> Price decision making process -> Price decision support system components. 4.1. Price decision support system: Although fertilizer producers are still focused on the financial and management era, they have access to technology that will allow them to share in the growing information era. The use of statistical models have been selected as motivational reason for the use of price decision support systems but the limited knowledge of marketing managers on the subject of statistical models is a contributing factor to the limited availability and use of computerized price decision support systems. The selection of alternative price proposals and time savings in the price decision making process are the motivational reasons for the future use of price decision support systems but the functionality is currently unrecognizable because price decision support systems are not being operated on a terminal approach. 4.2. Price decision support process: The price decision making process for the price decision support system for the fertilizer industry consist of the following activities: selection of the market segment, selection of price objectives, analysis of price variables, selection of pricing method, selection of price policies and selection of price adjustments. There is no agreement between fertilizer producers with regard to the presence and existence of activities of the price decision making process. The only factors commonly used in the price decision making process are the analysis of price variables and the selection of price adjustments. 4.3. Decision support system components: The use of MsExcel en Lotus 123 and the limited computer literacy of users hampered the creation of a user-friendly interface. The limited use of external and personal data had to do with the following aspects: limited use of intermediates, limited computer literacy in the use of statistical models, the limited availability of statistical models in current systems and the fact that price decision making in the fertilizer industry is focused on parameters that vary little over time. The limited availability of computerized price decision support systems to take care of modelling functionality limited the number and extent of variables in the decision making process and moves the focus in price decision making from strategic planning towards day-to-day operational planning. The limited availability of computerized price decision support systems to handle statistical models move the focus to the use of management functional models which is financial orientated in nature and not towards scientific models that can assist with the analysis of price variable data and opportunity finding and -solving. 5. CONCLUSION: With the general system theory as focus the price decision support system for the fertilizer industry should be based on the environment as system and the fertilizer producer as subsystem of the environment. Sub-systems of the fertilizer producer include senior management as management level sub-system, marketing as functional area sub-system and price as marketing instrument sub-system. The development of the price decision support system for the fertilizer industry should be viewed as a software system developed with decision support system generators and tools with a nature that is non-procedural and data- and modelling orientated focused on answering the question of “what-if". The decision support system should also facilitate ad hoc price decision support opportunities and result computing of group supported interdependent activities. The application domain for the development of a price decision support system for the fertilizer industry should include the following price decision making process activities: market segmentation, price objectives, analysis of price variables, pricing methods, price policies and price adjustments. In order to ensure user consensus and ownership, the price decision making process activities that should be included in the price decision making process for the fertilizer industry that represents the functional user requirements are: the input selection criteria through the action language medium, the functional component from where data is sourced, the functional component from where models and pre-formulated calculations through the enquiry facility can be selected and the decision support information that should be available through the display language medium. The technical design of the decision support system for the fertilizer industry should include the following sub-systems: communication management, data management, model management and knowledge management.