Table Of ContentINTELLIGENT SUPPORT SYSTEMS
FOR MARKETING DECISIONS
INTERNATIONALSERIESIN
OPERATIONSRESEARCH& MANAGEMENT SCIENCE
FrederickS. Hillier,SeriesEditor StanfordUniversity
Weglarz,1./PROJECTSCHEDULING: RecentModels, AlgorithmsandApplications
Sahin,I.&Polatoglu,H. /QUALITY, WARRANTYANDPREVENTIVEMAINTENANCE
Tavares,L.V./ADVANCEDMODELSFORPROJECTMANAGEMENT
Tayur,S.,Ganeshan,R. &Magazine,M./QUANTITATIVEMODELINGFORSUPPLY
CHAINMANAGEMENT
Weyant,J./ENERGYANDENVIRONMENTALPOLICYMODELING
Shanthikumar,J.G.&Sumita, U./APPLIEDPROBABILITYANDSTOCHASTICPROCESSES
Liu,B.&Esogbue, A.O. /DECISIONCRITERIAANDOPTIMALINVENTORYPROCESSES
Gal,T.,Stewart,T.1.,Hanne,T. / MULTICRITERIA DECISIONMAKING:Advancesin
MCDMModels, Algorithms, Theory, andApplications
Fox,B.L./STRATEGIESFORQUASI-MONTECARLO
Hall,R.W. /HANDBOOKOFTRANSPORTATIONSCIENCE
Grassman,W.K./COMPUTATIONALPROBABILITY
Pomerol,J-c.&Barba-Romero,S./MULTICRITERIONDECISIONINMANAGEMENT
Axsater,S./INVENTORYCONTROL
Wolkowicz,H.,Saigal,R.,& Vandenberghe,L.{HANDBOOKOFSEMI-DEFINITE
PROGRAMMING: Theory,Algorithms,andApplications
Hobbs,B.F. &Meier,P./ENERGYDECISIONSANDTHEENVIRONMENTAGuide
totheUseofMulticriteriaMethods
Dar-EI,E./HUMANLEARNING:FromLearningCurvestoLearningOrganizations
Armstrong,J.S./PRINCIPLESOFFORECASTING:AHandbookforResearchersand
Practitioners
Balsamo,S.,Persone,V.,& Onvural, R.IANALYSISOFQUEUEINGNETWORKSWITH
BLOCKING
Bouyssou,D.etal. / EVALUATIONANDDECISIONMODELS: ACriticalPerspective
Hanne,T./ INTELLIGENTSTRATEGIESFORMETAMULTIPLECRITERIADECISIONMAKING
Saaty,T. &Vargas, L./MODELS, METHODS, CONCEPTSandAPPLICATIONSOFTHE
ANALYTICHIERARCHYPROCESS
Chatterjee,K.& Samuelson,W.{GAMETHEORYANDBUSINESSAPPLICATIONS
Hobbs,B.etal. /THENEXTGENERATIONOFELECTRICPOWERUNITCOMMITMENT
MODELS
Vanderbei,R.I.{LINEARPROGRAMMING:FoundationsandExtensions, 2ndEd.
Kimms,A./MATHEMATICALPROGRAMMINGANDFINANCIALOBJECTIVESFOR
SCHEDULINGPROJECTS
Baptiste,P.,LePape,C.&Nuijten, W./CONSTRAINT-BASEDSCHEDULING
Feinberg,E.& Shwartz,A./HANDBOOKOFMARKOVDECISIONPROCESSES: Methods
andApplications
Ramik,1.& Vlach,M.{GENERALIZEDCONCAVITYINFUZZYOPTIMIZATION
ANDDECISIONANALYSIS
Song,J. &Yao,D./SUPPLYCHAINSTRUCTURES:Coordination, Informationand
Optimization
Kozan, E.& Ohuchi,A.{OPERATIONSRESEARCH/MANAGEMENTSCIENCEATWORK
Bouyssouetal.{AIDINGDECISIONSWITHMULTIPLECRITERIA: Essaysin
HonorofBernardRoy
Cox,LouisAnthony, Jr.{RISKANALYSIS:Foundations, ModelsandMethods
Dror,M., L'Ecuyer,P.& Szidarovszky,F./MODELINGUNCERTAINTY:AnExamination
ofStochasticTheory. Methods, andApplications
Dokuchaev,N./DYNAMICPORTFOLIOSTRATEGIES:QuantitativeMethodsandEmpiricalRules
forIncompleteInformation
Sarker,R., Mohammadian,M.&Yao, X./EVOLUTIONARYOPTIMIZATION
Demeulemeester,R. &Herroelen,W./PROJECTSCHEDULING:AResearchHandbook
Gazis, D.C./TRAFFICTHEORY
Zhu,J./QUANTITATIVEMODELSFORPERFORMANCEEVALUATIONANDBENCHMARKING
Ehrgott,M.&Gandibleux,X./MULTIPLECRITERIAOPTIMIZATION:StateoftheArtAnnotated
BibliographicalSurveys
Bienstock,D./PotentialFunctionMethodsforApprox.SolvingLinearProgrammingProblems
INTELLIGENT SUPPORT SYSTEMS
FOR MARKETING DECISIONS
Nikolaos F. Matsatsinis
Technical University of Crele
Yannis Siskos
Technical University ofC rele
SPRINGER SCIENCE+BUSINESS MEDIA, LLC
Library of Congress Cataloging-in-Publication Data
A C.I.P. Catalogue record for this book is available from the Library ofCongress.
Matsatsinis, Nikolaos & Siskos, Yannis/ INTELLIGENT SUPPORT SYSTEMS FOR
MARKETING DECISIONS
ISBN 978-1-4613-5415-4 ISBN 978-1-4615-1147-2 (eBook)
DOI 10.1007/978-1-4615-1147-2
Copyright © 2003 by Springer Science+Business Media New York
OriginaIly published by Kluwer Academic Publishers in 2003
Softcover reprint of the hardcover Ist edition 2003
AlI rights reserved. No part ofthis work may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, microfilm ing, record ing, or otherwise, without the written
permission from the Publisher, with the exception of any material supplied
specificalIy for the purpose of being entered and executed on a computer system,
for exclusive use by the purchaser ofthe work.
Permission for books published in Europe: [email protected]
Permissions for books published in the United States of America: [email protected]
Printed on acid-free paper.
Contents
Preface Vll
PARTI - MarketingDecisions
DecisionAnalysisand Support 3
2 The Structure ofMarketingDecisions 21
3 StrategicMarketingDecisions 61
PARTII - IntelligentSupportSystems 83
4 Information Systems 85
5 Decision SupportSystems 111
6 AdvancedDecision SupportSystems 171
7 IntelligentDecision SupportMethods 221
8 IntelligentDecision SupportSystems in Marketing 273
9 New ProductDevelopmentMethodology 339
10Analysis and Design ofMARKEX 367
11 Applications inMarketing 403
References 423
Index 509
Preface
The recent collaboration of Multicriteria Analysis, Decision Support
Systems and Artificial Intelligence in Marketing, has yield particularly
significant results in strategic marketing decisions, especially in decisions
related with new product development and formation of penetration
strategies. The aimofthis book isto coverthe gap ofinternational literature
concerningthese results.
The first applications ofArtificial Intelligence in Marketing appeared in
1986, with the publishing of the work of Choffray and Chapin, and
Rangarwamy, Burke, Eliashberg, and Wind. These research efforts have
focused, on one hand, on the pure scientific direction (type oflogic process,
knowledge structure, etc) and on the other hand on the support ofmarketing
decisions, which has been developed more extensively. In this book, the
effort is to record and analyze current operational intelligent marketing
decision support systems. Furthermore, the proposed multicriteria
methodology for new product development decisions approaches the entire
process as a process of integrating new product development decision
makers with intelligentdecision supportsystems.
An early attempt involved the design ofa new methodology for market
analysis and new product design, proposed by Matsatsinis and Siskos, based
on the study of consumer behavior. This methodology has been
implemented by an intelligent decision support system, named MARKEX,
and has been successfully applied to aseriesofreal world marketsurveys for
new product development. The developed system combines the ability to
manipulate effectively qualitative and quantitative data through the system's
marketing models. The implementation ofthe methodology is accomplished
by using several forecasting, dataanalysis, multicriteria analysis, and branch
choicemodels.
Vlll Preface
Throughoutthis book, the following subjects are studied:
- Thetheoretical background required for the developmentofIntelligent
Decision SupportSystems in Marketing, suchasdecision theory,
marketingdecisions, multicriteriadecision analysis, information systems,
decision supportsystems, intelligentdecision supportmethods.
- Currenttrends ofIntelligentDecision SupportSystems in Marketingand
short presentation ofsome characteristicsystems.
- A new multicriteriamethodologyfor new productdevelopmentand
formation ofmarket penetration strategy, based onthe analysis of
consumer's behavior.
- The implementation ofthis methodology, through an IntelligentDSS.
- The procedures followed for knowledge elicitation, acquisition, and
representation ofthe system's knowledge bases as well asforthe
developmentofa heuristic brandchoicemodel.
- Fundamental issuesofmodern technologies such as intelligentagents.
- The system's multicriteriamethodologyand function through the
presentation ofareal-world application concerningthedevelopmentofa
new product.
As innovative points ofthis book, the following may beconsidered:
- The proposed multicriteriamethodology for new productdevelopment
decisions and choiceofmarket penetration strategy, based onthe
qualitative study and analysis ofconsumer's behavior.
- Thedevelopmentofan IntelligentDSS that implementstheabove
mentioned multicriteriamethodology.
- The presentation oftheessential scientificbackground in which the
multicriteriamethodologyand the system are based on.
- Theanalytical presentation ofall the utilized models.
- The analytical presentation ofthe system's knowledge bases concerning
the choice ofdataanalysis method, the assessmentoffirm's financial
status, andthe choice ofbrand choice model.
- The presentation ofaheuristic algorithm for brand choice model
selection.
- The presentation ofthe results ofasurveyon existingIDSSs in
marketing.
- The presentation ofcurrenttrends in the developmentofweb-based DSSs
and othermodern technologies such as intelligentagents, neural
networks, heuristics, etc.
- The presentation ofreal-world cases ofnew productdevelopment
decisions, in which the methodologyand the systemwhereapplied.
In addition to the above, the book differs from other books, also in the
following points:
- Itfocuses on a certain category ofDSSs, namely on IDSSs .
Preface
IX
- Itstudiestheirapplicationand function in a singleportion ofmarketing,
which deals with the developmentofnewproducts based on the studyof
consumers' behavior.
- The bookexaminestheapplication ofmulticriteriadecision analysisfor
qualitative analysis ofdata, consumers' behavioranalysis, criteria
analysis, and marketsimulations.
In the first part of the book (Part I - Chapters 1, 2, and 3) the basic
concepts of multicriteria analysis theory, marketing decisions and strategic
decision making in new productdevelopment situationsareexamined.
Part II, presents basic concepts from the fields of information systems
(Chapter 4), decision support systems (Chapter 5) and intelligent decision
support methods (Chapter 7). In Chapter 6, specialized categories ofDSSs,
such as multicriteria DSSs, web-based DSSs, Group DSSs, Spatial DSSs,
etc, are presented. Chapter 8 studies the current situation in IDSSs in
Marketing, formed trends, and short presentation ofsome typical systems of
thiscategory. In addition, a listofIDSSs in Marketingalong with their most
importantfeatures, which isthe resultofan extensive survey, is presented.
Part III, begins with the proposed multicriteria methodology for new
product development (Chapter 9). Chapter 10 presents the analysis, design
and developmentofthe IntelligentDecision Support Systemthat implements
this methodology. This chapter also presents the system's models and
knowledge bases. Finally, in Chapter 11 the methodologyand thefunction of
the system are presented through a real-world application concerning the
developmentofanew product.
I
PART I. MARKETING DECISIONS
Chapter 1
Decision analysis and support
1. INTRODUCTION
The continuous and enormous increase in the complexity of
organizations renders the decision making almost an impossible task to be
managed by individual decision makers and generatedthe necessityfor more
efficient and effective administration and management procedures. In order
to satisfythese requirements new scientific fields haveemerged orexpanded
like management science, operational research, applied economic sciences,
behavioural sciences, etc. The evolution ofthese research fields led to the
systematic and scientific analysis and handling of administrative and
managerial problems.
This immense development of new methodologies and expansion of
existingscientific fields was augmented bythecontributionofthe:
- Rapid progressofcomputerscience in hardwareand software, and
- Evolution incommunication and networktechnologies.
The vast complexity of decision-making problems resulted in the
expansion and augmentation of the role that humans play in the decision
making processes. The shift offocus from models and numbers to human
decision makers led, in the beginning of 70's, to the emergence and
flourishing ofanewscientific field known as Decision Science.
The goal ofthe decision science is to studyall the factors and procedures
that can direct to a desirable decision. Decisions are reached through the
elaboration ofa set ofhighly complex processes, which aim at studying and
extensively analysing the consequences ofthe decision alternatives and then
at synthesizing the goals and intentions ofthe involved parties in order to
find acommonlyacceptable solution.
