Aids to evaluate the market response and profit impact
of marketing policies
In most cases market response to a marketing effort is S-shaped. This means
that, compared to a previous period, one can estimate the needed effort
in order to maintain the same market response and one can identify the
lower and higher limit within which the market response can vary given
different amounts of marketing effort.
We use Internet programming facilities like the Java and Javascript
language in order to obtain a communication tool that pools together market
response estimations from several managers and develop through an interactive
process a more reliable and managerially acceptable estimation
of the market response.
Participative modelling using new world wide communication technologies
can go further than simply estimating market response. We have developed
and published on the web a prototype model called "FIDELISATOR"
for assessing the profit impact of different bank marketing mix strategies,
combining traditional "offensive mix" elements (product, price, promotion,
place) with newer "defensive" or "customer retention" mix elements (quality
programs to increase satisfaction scores, switching costs and relationship
communications). Models that can be communicated are a very efficient instrument
for assessing complex market situations. They help isolate the essential
problems to be solved and foster managerial creativity.
We are building a comprehensive simulation model that we called "STRATEGY".
It develops ideas initiated in the "FIDELISATOR" model but brings much
more detail so that the model becomes realistic and can be used to simulate
real world decisions. The simulation can be used either to explore several
scenarios and determine policy impacts or it can serve as a pedagogical
game to be used in indoor teaching programs for bank managers organised
with the participation of academic moderators.
Our beta versions can work either ON-LINE as Java or Javascript programs
on the Internet or they can work OFF-LINE as programs written in C++ on
personal computers.
