Abstract
Response models can be used to improve organizational effectiveness through a process involving three steps: (1) intervention, (2) implementation, and (3) improvement (Schultz and Henry 1981). Intervention takes place when management recognizes a need for change in the way decisions are made and activity to meet that need is initiated. One example would be the development of a marketing decision model to aid in planning and forecasting. If the resulting model actually changes the way decisions are made, we can think of the model as having been implemented. If, in addition, the model improves the decision process, we would call this implemented model successful. Successful implementation is the goal of marketing science.
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Notes
For other views on learning from experience, see Einhorn (1982) Fischoff (1982), and Chi and Glaser (1985).
This concept in marketing is from Parsons and Schultz (1976); it should not be confused with “representativeness” as used in the decision analysis literature (cf. Tversky and Kahneman 1981).
Also see Nisbitt et al. (1982) and Pitz and Sachs (1984).
This argument applies with particular force to a well-defined task such as planning and forecasting; however, other aspects of decision making may require innovation and hence “inconsistency.” See Hogarth (1982).
The Bass growth model contains two coefficients representing external and internal influences, respectively (Lekvall and Wahlbin 1973 ). When a multiplicative response term for a marketing decision variable is introduced into the Bass model, the implication is that the decision variable affects both coefficients identically. Simon and Sebastian (1987, pp. 453–54) argued that there is no behavioral substantiation for this hypothesis.
Devinney (1987) pointed out that the fact that costs have declined may have nothing to do with learning but may be driven by their reaction to competitive pressure, especially competitive entry. Since entry and learning yield similar observable effects, an identification problem exists that precludes single-equation estimation of learning effects.
Deal squares advertising in the performance index as a way of capturing the diminishing returns to scale of advertising expenditures. It would seem more appropriate to modify the sales response functions. Case (1979, pp. 171, 200) gets a squared advertising term as a result of the normalization of a specific sales response function.
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© 1990 Kluwer Academic Publishers
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Hanssens, D.M., Parsons, L.J., Schultz, R.L. (1990). Improving Marketing Decisions. In: Market Response Models: Econometric and Time Series Analysis. International Series in Quantitative Marketing, vol 2. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-1073-7_8
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DOI: https://doi.org/10.1007/978-94-009-1073-7_8
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-6972-4
Online ISBN: 978-94-009-1073-7
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