Summary Principles of marketing engineering

ISBN-10 1425113141 ISBN-13 9781425113148
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This is the summary of the book "Principles of marketing engineering". The author(s) of the book is/are Gary L Lilien, Arvind Rangaswamy, Arnaud De Bruyn. The ISBN of the book is 9781425113148 or 1425113141. This summary is written by students who study efficient with the Study Tool of Study Smart With Chris.

Summary - Principles of marketing engineering

  • 1 The Marketing Engineering Approach

  • Marketing engineering

    a systematic approach to harness data and knowledge to drive effective marketing decision making and implementation through a technology-enabled and model-supported interactive decision process

  • conceptual marketing

    when a decision maker relies solely on his or her mental model, without using any support system

  • automated marketing

    to automate the decision process using a spohisticated information system

  • In an organizational setting, the ME approach requires the design and construction of decision models and the implementation of those models in the form of marketing management support systems (MMSSs)

  • ME aids managers by providing a platform to ask "what if", enabling them to assess the opportunity costs  associated with their decisions and determining the potential value of alternatives they choose to reject. 

  • Managers can observe only the consequences of actions they have actually taken; however, ME helps them understand whether they might have made better decisions to begin with

  • 1.1 The emerging marketing decision environment

  • Exhibit 1.1 The marketing Engineering approach to decision making helps transform objective and subjective data about the marketing environment into decisions and decision implementations

  • 1.1.1 Trends that favor marketing engineering

  • Trends that favor marketing engineering

    • The ubiquity of high-powered personal computers connected to networks
    • An exploding volume of date
    • Reengineering marketing
    • higher standards of accountability
  • The ME approach offers several opportunities for using information technologies to develop a marketing decision platform thoughout an organization. It supports the identification of new business opportunities, offers a common analytic foundation for driving marketing decisions, incorporates the latest insights and practices associated with a particular area of marketing decision making, and integrates actions with decisions, all of which we can serve to enhance strategically important metrics. 

  • A data-driven support tool answers "what if"questions on the basis of a quantified market response model. A knowledge driven decision support tool captures the qualitative knowledge available about a particular domain.

  • 1.2 tools for marketing engineering

  • dumb models

    make little sense as marketing models because they are silent about the nature of the relationship between marketing inputs and outputs

  • smart model

    the spreadsheet embeds an equation or "response model", which the manager uses to consider the effect of advertising or decreases in advertising are justified

  • 1.2.1 market response models

  • market response models

    the basic tools of marketing analytics, the ingredients that can transform a dumb spreadsheet model into a smart one. 

  • 1.3 Market response models translate marketing inputs, competitive actions, and environmental variations into observed market outputs within the framework of a marketing decision model. 

  • 1.2.2 types of response models

  • Marketing models can be characterized in several ways:

    • By the number of marketing variables
    • By whether they include competition
    • By the nature of the relationship between input and output variables
    • By whether the situation is static or dynamic
    • By whether the models reflect individual or aggregate response
    • By the level of demand analyzed
  • 1.2.3 dynamic effects

  • Responses to marketing actions rarely take place instantly.

  • carryover effects

    refer to the influence of a current marketing expenditure on sales in future periods

  • delayed-response effect

    arises from delays between when marketing dollars are spent and their impact

  • customer-holdover effect

    arises when new customers created by marketing expenditures remain customers for many subsequent periods (customer retention rate/customer decay rate)

  • new trier effects

    in which sales reach a peak before setting down to a steady state (are common for frequently purchased products, for which many customers try a new brand but few become regular users)

  • stocking effects

    occur when a sales promotion not only attracts new customers but also encourages existing customers to stock up or buy ahead (leads often to a sales drop)

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