Marketing Modeling
By Lim Thou Tin
Implementation of information technology within organizations has appeared to be relentless in scope and pervasive with beneficial contribution in terms of increased efficiency and higher levels of marketing experience. Are you benefiting from the use of information technology in marketing? The power of information technology to facilitate and accentuate dramatic changes in organizational structures affecting all functional departments is well acknowledged. Management practices associated with the increased utilization of information technology, such as business process re-engineering, knowledge management and business performance management have become a significant part of organizational lingo. Globalization requires organizations to response to a more complex environment of greater consumer power and sophistication, increasing competition and technology innovation. The marketing department is not shielded from such complexity and has to respond to decisions on research, forecasting, production, personnel, sales, supply chain, organizational strategy and operations management besides marketing strategy and marketing mix.
The increasing complexity of organizations led to the demand for more scientific, rational, systematic methods of decision making, which are more consistent and the decisions made can be supported and analyzed after the event in order to improve future decision making. Marketers need to think both qualitatively and quantitatively. The application of quantitative techniques to marketing has for some offers offer a wealth of opportunities to explore data afresh and gain new insights into marketing phenomena and others as a “challenge”.
Models, in general, are described as a scaled-down representation of the real world (see Figure 1).
Real World and Model
Figure 1
A marketing model may seek to represent the problem describing it in terms of iconic/graphical or symbolic/mathematical terms. The system model is described as abstract, simulating reality by feeding in data and predicting the likely outcome. They can be deterministic or probabilistic – their usefulness can be established by comparing their predictions with reality; the probability of outcome being as predicted is independent of how risk and uncertainty have been built into the model. The most popular type of modeling technique appeared to be to use the computer spreadsheets to interrogate a complex symbolic model and then to use a graphical user interface to present the results in spreadsheets. This would seem to reinforce the theme of a general preference for pictures as opposed to numbers which tends to be more difficult to be visualized which supports the notion that “a picture paints a thousand words”. For instance, a brand manager would be using a chart showing movement in percentage share of the market, the buyer uses economic batch quantity tables, and the managing director cash flow calculations.
The above article is contributed by our trainer, Kate Chan. As a firm believer in experiential learning, she has enhanced the professional and personal development of many through engaging their active involvement. Her topics on English proficiency, business writing, presentation, customer service, interpersonal communication, corporate image, thinking on your feet, time management, stress management and leadership have benefited professionals across different industries.
The modeling process takes upon the following process:
- Selection of an area of application
- Analysis and recording of objectives, tasks and processes
- Specification of requirements
- Definition of the logic of the model
- Putting the arithmetical model into a spreadsheet
- Implementation – bringing the model into use
- Maintenance and development
The above article is contributed by our trainer, Lim Thou Tin. His area of involvement includes helping organizations to plan their corporate IT to building and management of their decision support systems, corporate knowledge and e-commerce portals. His consulting work includes working with both the financial and services industries to help them to develop corporate, financial and knowledge models to address their decision-making needs.
Thou Tin will be conducting the following public learning courses at the Marketing Institute:
• Marketing ROI - 28 & 29 Aug and 2 & 3 Oct 2008
For more information on the course, please contact Angelina or Su at 6327 7586 or 6327 7588, or email seminars@mis.org.sg
The views expressed in the above article do not necessarily represent those of the Marketing Institute of Singapore. No responsibility is accepted by the Institute or its staff for the accuracy of any statement, opinion or advice contained in the article. All articles on our website are copyright and no part may be reproduced without prior written permission of the Marketing Institute of Singapore.
