The importance of information.

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Chapter 9 – Information as a Commidity

  1. The importance of information

Almost overnight, it seems, success in almost any field has become impossible without information technology. In manufacturing, health care, education, policing, retailing, banking, farming and thousands of other fields, information is as valuable a resource as capital or people. Information is gathered about market trends, buying preferences, customer profiles; computers analyse, summarise and present this data to managers who use it as the basis for decision-making.

Accessible, accurate and up-to-date information can help to ensure that decisions of all kinds are likely to be correct, from how many thousands of a particular toy to manufacture in time for Christmas, to whether or not to open a new factory.

  1. Case study

  1. Collecting and analysing data

Data can be collected for a specific purpose, or it may be collected for one purpose and then used for some other purpose. If it is personal data, then care would have to be taken not to contravene the Data Protection Act (‘Data must not be used for any reason incompatible with its original purpose’).

Tesco’s, for example, collects huge amounts of data on customer buying patterns through its Loyalty card. This massive amount of data can be analysed in thousands of different ways to help predict likely sales, or to suggest new marketing ploys. For example, a probably apocryphal tale is told of how a computer analysis of sales data showed that large numbers of disposable nappies were bought by men in their 20’s and 30’s on Friday evenings. This led the astute manager to position cans of beer in the same area of the store as nappies, on the basis that most men would pop a few cans in their shopping trolley as they were passing. Sales of beer rocketed!

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  • Discussion:  

  1. Information as a commodity

Have you ever wondered why YOU in particular, or your family, are targeted for particular mail advertisements? Every time you make a credit card purchase, enter a competition or order goods by phone or mail, information about who you are and the products you bought goes onto a database. This information can be used to direct advertising to the people who are likely to be interested in particular products.

  1. Usefulness of data

Data is of poor ‘quality’ if it is out-of-date, inaccurate or incomplete. Companies who sell ...

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