What are the roles of information in business?
The roles of information in business are essentially three-fold. One is to use information to make purchasing decisions. Another is to use information to make selling/marketing decisions. A third is to use information to make human resources decisions. There are other roles for information, however, I believe these are the three main roles of information in business. Let’s consider a typical retail food business and how it normally uses information:
A food retailer would use information to plan its inventory purchases. A supermarket’s desire is to have on hand, at all times, the food products that its clientele want. Therefore, the company would look at the following information to base its inventory purchases on:
1. Past sales trends and what products have sold for them best in the past weeks, months, and years.
2. Customer surveys to ascertain what customers’ currently want.
3. Industry trade reports that detail what consumers are after and what their changing desires are. For example, today, more customers are looking for organic, and “clean label’ foods.
4. What its competitors are marketing and if they are actually successful in selling these items.
5. Reports from its suppliers on what products are on trend and selling well throughout the supermarket/food retailer industry as a whole.
A food retailer would useinformation to plan its selling and marketing programs. It would seek information that tells them what advertising gives them the “most bang for their bucks”. In other words, this information would tell the supermarket if they should allocate money to print advertisements, radio, TV, or Internet advertising.
Furthermore, a food retailer would use information from industry experts to help them formulate marketing and promotions initiatives. They might use this information to institute in-store promotions such as baking and cooking demonstrations. Conversely, they may take their promotional efforts out into the community to spread the word about their business. This could be through setting up display booths at local community events or at regional trade shows.
The retailer would also use information gathered to come up with prices for their products. They can use information to decide what items to feature as specials, what items to premium price, and what items to freeze prices on.
Human resources decisions
A food retailer would use information to make human resources decisions such as how many employees to have on hand at peak hours and off hours, depending on sales. A business would consider the current labor rates and also the cost of training new employees. This is vital information they need to ensure they don’t over extend their budget as concerns payroll.
A business needs people to run effectively, and these employees must be trained properly and be rewarded properly for their efforts or a business will experience too much employee turnover, which is costly. Therefore, a business would use information to ensure it has qualified staff that can serve its customers well.