The Marketing Book 5th Edition

220 The Marketing Book

decisions, the reason being the high cost incur-
red in hiring sales clerks whose services are
almost irreplaceable. Since these sales clerks
work in situations which can be systematically
regulated and accurately observed, techniques
can be used to provide management with
information so that the optimal size of the
salesforce can be ascertained. A queuing model
to determine the optimum number of sales
clerks to be assigned to a floor in a department
store so as to maximize profitability can be
determined. Attention should be focused on
five main variables:

1 The number of potential customers arriving

and requesting service per unit time.

2 The amount of time required by a sales clerk

to wait on a customer.

3 The number of items purchased per customer

per transaction.

4 The incremental value to the retail

establishment of each item sold (i.e. profits).

5 The amount of time the customer is willing to

wait for service.

Most research articles state that the use of

queuing theory is mainly concentrated on

Table 9.9 Applications of artificial intelligence methods in marketing

(basic content, advantages, limitations and when recommended to use)

Method Content Marketing

applications

Advantages Limitations

Artificial

intelligence

A computer

program to

express the

reasoning process

by modelling

relationships

among various

variables (see

checklist in text)

Marketing

research, test

marketing, pricing,

site selection,

tourism marketing

and international

marketing (Curry

and Moutinho,

1991)

Flexible, able to

explain reasoning

of interactions

Difficulties in

construction of

the expert system

model

Neural

networks

Use of structured

input and output

data to develop

patterns that

mimic human

decision making.

Employs a

statistically based

procedure of

iteratively

adjusting the

weights

Consumer

behaviour (Curry

and Moutinho,

1993), price

modelling (Ellis et

al., 1991), media

planning (Kennedy,

1991) and market

segmentation

Capable of

retraining. Able to

bring together

psychometric and

econometric

analyses

Low accuracy.

More difficult to

interpret than the

expert systems

above