Abstract
In Chapter 1, we defined a model as a representation of the most important elements of a perceived real world system. In this chapter, we consider a number of ways of representing these elements, the differentiating dimension being the ‘degree of explicitness’. As such, we distinguish implicit models, verbal models, formalized models, and numerically specified models. The different methods of representing systems will be illustrated with an example.
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References
See also Montgomery and Urban (1970, p. 9), and Leeflang and Koerts (1973, p. 212).
A descriptive model, as the name indicates, describes a situation or a decision making process. The notion of a descriptive model will be discussed in Sections 4.1 and 7.1.
The ultimate model is a logical flow model, but this was constructed on the basis of verbal descriptions of the elements of the model and their interactions. The notion of a logical flow model will be defined in Section 2.3.
For an analysis in depth of satisficing behaviour, see March and Simon (1958), and Cyert and March (1963).
A limit price has the property that prices above its value will stimulate entry by competitors, whereas lower prices will discourage entry. For an introductory discussion, see Palda (1969, pp. 166–167). At a more advanced level, we refer to De Bondt (1975, 1976).
See for other examples: Boyd and Massy (1972, pp. 17–21), Montgomery and Urban (1969, pp. 9–12).
Taking into account the fact that many firms determine advertising spending on the basis of past sales performance. While this runs contrary to the general belief that advertising is a determinant of sales and not the other way round, fixing the level of the advertising budget as a percentage of past sales nevertheless remains a common corporate practice. See Schmalensee (1972, Ch. 2).
The procedure is reminiscent of Walrasian ‘tâtonnements’. The models developed by Walras (1926) are good examples of formalized models.
The restriction p>0 is added, because otherwise nonrealistic solutions could be obtained.
See, for example, Montroe (1972), and Naert (1972).
For a detailed presentation see Montgomery and Urban (1969, pp. 29–53).
The terms ‘numerically specified marketing model’ and ‘marketing model’ will be used interchangeably from now on unless otherwise indicated.
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© 1978 H. E. Stenfert Kroese B. V.
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Naert, P.A., Leeflang, P.S.H. (1978). Classifying marketing models according to their degree of explicitness. In: Building Implementable Marketing Models. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6586-4_2
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DOI: https://doi.org/10.1007/978-1-4615-6586-4_2
Publisher Name: Springer, Boston, MA
Print ISBN: 978-90-207-0674-1
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