Market modelling techniques are at the leading edge of market research technology, an increasingly important part of the technical armoury of marketing companies around the world. 'They cover a wide range of applications: from pricing research and concept development to brand image engineering and market testing. My aim here is not to to read out a highly technical treatise on the theory and mechanics of market modelling. I can do better than that - with a straightforward view of the fundamental principles underlying some key modelling techniques - and a demonstration of how they have been adapted for use in the Middle East. Supported by rapid developments in computer technology, market micro-modelling breaks away from traditional market research methodologies. Whilst they were largely confined to the descriptive (or at best diagnostic) micro-modelling allows market researchers to predict what will really happen out there, in the real world. The real world... this is the key point. Maybe it's the only point. It has been said before but I will say it again. Market places are not tidy, well-ordered vacuums where research theories can be put smoothly into practice. If they were, our lives would be simpler, but less interesting. Markets are essentially untidy places, subject to subtle undercurrents, cultural influences - and that irritating phenomenon known as the competition.
Modelling is a diverse and complex area. It is also a controversial one. For more than two decades, researchers have developed and adapted models of widely differing kinds, ranging from econometric systems designed to forecast changes at the global market level to theories about individual decision processes. There has been considerable activity and enthusiasm, among research practitioners and marketing managers as well as marketing academics. On the other hand, some researchers and marketing men have reacted with either indifference or scepticism. Models have been condemned as too complicated, both conceptually and methodologically; as necessitating long and costly procedures of data collection and analysis; as being difficult to implement; and as irrelevant for practical decision making. These criticisms have stimulated protagonists of the modelling approach to pay more attention to building usable models and to finding ways of getting models used. Successful case histories have been reported and two are quoted later in the chapter. The purpose of this chapter is to draw attention to some major issues in the area.
Our purpose in writing this paper is to rise above the level of technique and to begin a discussion of what makes market modelling work. What is being achieved with this field of technology, what is possible, and what form is modelling likely to take in companies just beginning to use it? What are the trends, so that we can avoid re-creating the past and move on to develop a future.
The subject of this paper is the basic research on the measurement of the effect of advertising on purchasing probability at the pre- and post-test stage for all media advertising which IVE has been carrying out systematically over the last eight years.