Canadian Cases in Marketing

Abstract

problems is delineated in the early chapters to aid the reader in placing scientific decision making in perspective. Standard basic quantitative techniques are then presented. Included in the review are outcome arrays, the idea of utility and payoff tables, evaluation criteria, and sensitivity analysis. Most importantly, the author depends primarily on basic techniques and their implicit assumptions. Thus, the difficulties in using these techniques are discussed. The second half of the text presents the role of models in the functional areas of marketing. An understanding of the models requires a knowledge of algebra and elementary calculus. Most of the essential material draws only on algebra while the more specialized material requires calculus. This latter area is presented in technical notes where it does not upset the flow of the book. Unfortunately, the author does not include the application of computer sciences to marketing problems. However, this is the only major exclusion of this text, and the area is covered in other monographs. Product decisions are centered on the selection and development of new products. The use of factor utility arrays and probability matrices in new product selection permits the author to synthesize much of the qualitative work that has been reported. Network theory is then used to guide the product through the various development stages. Market analysis and test marketing a product are covered in the traditional manner. Purchasing decisions are considered under conditions of certainty and risk. In addition, both the static and dynamic price situations are included. Since the material in this chapter depends quite heavily on calculus, the technical note presented enables the reader who is unfamiliar with the mathematics used to grasp the meaning of the material covered. Pricing decisions are initially presented via the economist model approach. The section on the use of decision trees in arriving at a price introduces the more practical techniques to solve the problem of setting a price. Competitive bidding strategies, including the use of decision trees, are discussed as a conclusion to this chapter. Two chapters are devoted to exploring the quantitative approach to advertising and promotion decisions. The standard topics of allocation of funds, measuring effectiveness, and competitive strategies are included. Of special note are the sections devoted to the estimation of the parameters of the dynamic advertising model and the use of Markov processes in promotion. Channel of distribution decisions is the concluding topic of the text. In this chapter, transportation and allocation techniques are used to solve problems arising in physical distribution. In summary, this book is useful as a text in an introductory quantitative marketing course and for the practitioner interested in reviewing basic scientific techniques applied to marketing. EARNEST B. UHR State University of New York at Albany