The Age of Marketing Engineering

Lilien, Gary L.; Rangaswamy, Arvind; Matanovich, Timothy
March 1998
Marketing Management;Spring98, Vol. 7 Issue 1, p48
This article deals with marketing engineering, a computer decision model for making marketing decisions. The basic premise of marketing engineering is that the model-building process improves decisions in five ways. Specifically, managers can: improve consistency of decisions, explore more decision options, assess the relative impact of variables, facilitate group decision making and update subjective mental models. In some situations, decision options might be few, but the variables affecting the decision model can provide a manager with framework to explore each decision option more fully and glean the impact of each of the causative variables. Modeling provides focus and objectivity to group decision making by externalizing ideas and relationships that reside within the minds of decision makers. In the same way that an explicit agenda helps direct meetings, the model or the results from a modeling effort can help a group deliberate and converge on a decision. When managers are exposed to decision models, the update their own internal models in subtle but significant ways. Formal models require that key assumptions be made explicit, or their structure may require new ways of thinking about a familiar problem, resulting in learning that may affect future decisions. Marketing engineering is not a panacea for coping with complex and uncertain decision environments. But it helps capture the essence of marketing phenomena in well-specified models, and it improves our ability to make decisions that influence market outcomes.


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