Abstract
The purpose of this paper is to critically compare a neural network technique with the established statistical technique of logistic regression for modeling decisions for several marketing situations. In our study, these two modeling techniques were compared using data collected on the decisions by supermarket buyers whether to add a new product to their shelves or not. Our analysis shows that although neural networks offer a possible alternative approach, they have both strengths and weaknesses that must be clearly understood.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bessen, Jim. (1993). “Riding the Market Information Wave.”Harvard Business Review (Sept.–Oct.), 150–161.
Breiman, L., J. Friedman, R. Olschen, and C. Stone. (1984).Classification and Regression Trees. Belmont, CA: Wadsworth.
Briesch, Richard, and Dawn Iacobucci. (1993). “Using Neural Networks to Compare Theoretical Models: An Application to Persuasive Communications.” Working paper, Northwestern University, Department of Marketing.
Chatfield, Chris. (1993). “Neural Networks: Forecasting Breakthrough or Passing Fad.”International Journal of Forecasting 9, 1–3.
Freeman, J., and D. Skapura. (1991).Neural Networks: Algorithms, Applications and Programming Techniques. Reading, MA: Addison Wesley.
Kass, G.V. (1980). “An Exploratory Technique for Investigating Large Quantities of Categorical Data.”Applied Statistics 29(2), 119–127.
Mazanec, Josef. (1992). “Classifying Tourists into Market Segments: A Neural Network Approach.”Journal of Travel and Tourism 1(1), 39–59.
Rao, Vithala R., and Edward McLaughlin. (1989). “Modeling the Decision to Add New Products by Channel Intermediaries.”Journal of Marketing 59, 80–88.
Robins, Gary. (1993). “Neural Networks.”Stores (January), 39–42.
Rumelhart, David E., and James E. McClelland. (1986).Parallel Distributed Processing (vol. 1). Cambridge, MA: MIT Press.
Schwartz, E. (1992). “Where Neural Networks Are Already at Work (Special Report).”Business Week, November 2, 136–137.
Sharda, R. (1994). “Neural Networks for the MS/OR Analyst: An Application Bibliography.”Interfaces 24 (March–April), 116–122.
Tam, Kar Yan, and Melody Y. Kiang. (1992). “Managerial Applications of Neural Networks: The Case of Bank Failure Predictions.”Management Science 38(7), (July), 926–947.
Wasserman, Philip D. (1989).Neural Computing: Theory and Practice. New York: Van Nostrand Reinhold.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Kumar, A., Rao, V.R. & Soni, H. An empirical comparison of neural network and logistic regression models. Marketing Letters 6, 251–263 (1995). https://doi.org/10.1007/BF00996189
Issue Date:
DOI: https://doi.org/10.1007/BF00996189