The Use of Models in Marketing

A model is an attempt to simulate reality. This implies (1) The identification of a number of variables (2) The specification of their inter-relationship (3) Presentation of this in a design form which puports to represent what action happens.

Forms of Model

• Intuitive
• Verbal
• Graphical
• Mathematical

Steps in model making

• Problem definition
• Collection and analysis of data
• Establishing criteria for results measurement
• Model development
• Model testing
• Development of working tools
• Integration into total company operation

Inhibiting factors

• User orientation
• Complex nature of marketing

Where do models have a role

In accounting for present market share hence sales and what will happen tomorrow if elements of the marketing mix change.

Disillusion and Adjustment

Reflects mistaken facts or assumptions and is compound by over reliance on predictive accuracy of model.

Limited role

They have a much more limited role that was originally intended.