The Marketing Book 5th Edition

Quantitative methods in marketing 217

Table 9.8 Uses of simulation and fuzzy sets in marketing (the method,

advantages, limitations and when recommended to use)

Method Based on Marketing applications Main advantages Main limitations

Simulation Conducting

experiments using a

model to simulate

working conditions of

the real system

(a) Marketing

planning

(b) Monitoring and

controlling

(Kotler and

Schultz, 1970),

marketing

operations

(c) Distribution,

consumer

behaviour,

retailing, staffing,

advertising

(d) Marketing training

(Kotler and

Schultz, 1970)

(a) A very felxible

and simple

method easily

understood by

managers

(b) Saves time and

resources

(c) Simulation has

found wide

applications in the

field of marketing

(a) Tedious

arithmetical

calculations

(b) Rather costly in

computer time

Fuzzy sets The technique is

essentially a factual

modelling process

that attempts to fine

tune the expression

of knowledge. It does

this by using a

linguistic scale

describing the

characteristics under

each of the main

dimensions of the

model to form fuzzy

sets; a hierarchical

aggregation of

information based on

fuzzy aggregation

operators; and a

conceptual hypercube

to determine the

rank and ranking size

of the outcomes.

Includes the concept

of membership

function (between 0

and 1)

Modelling consumer

behaviour, marketing

planning, new product

testing, perceived

price testing,

marketing

communication

effects research

(Zimmerman, 1991)

Flexibility which

accommodates a

degree of uncertainty

or fuzziness, in

diagnosis. This

fuzziness is indeed

lauded as realistic in

expressing human

judgement

Difficult measurement

scaling and estimation

of the bipolar

descriptors. Linguistic

scale for

characteristics

description.

Description of the

values for the

parameters of the

model