In this presentation, we have tried to see the usual applications of operations research in the marketing field. This field is in quick evolution. Among the most promising uses, we can cite: - the decision theory applied to operations with technical and commercial risks which escape from probability laws - the integrated systems of control and predictive planning in advertising and marketing fields that will probably give a new statute to test markets - investigation of the exposure concept (advertising and commercial) and the notion of response curve of a market versus exposures (consumers - advertising, sales promotion) (retailers - agents visits) - the behaviour studies of households in the consumer panels by statistical observations which will permit to simulate the market attitudes in relation with the launching strategy of the products. Those scientific approaches will be developed if the marketing executives are trained to take the best of a better organisation.
I think this has been a most interesting Seminar because it has brought together people who are approaching this area of Operational Research in Marketing from a number of different directions, or with a number of different objectives.
Before reporting upon the discussions of the different contributions, I would like to make some general remarks which result from our discussion group Nr. 3 and which do not refer to the one or the other specific report.
The degree to which operational research will be accepted as a management tool depends very largely upon whether or not operational researchers can sell their discipline and skill to management. So far all signs are that OR men have as yet failed to do so. In common with continental countries operational research in Britain has penetrated few organisations; the nationalised industries and a handful of multi-national companies employ a substantial number of operational researchers. The main conclusions from the Seminar are: 1. Operational research equates with a way of thinking; 2. Many people are in fact using OR techniques without realising it; 3. Management needs to be converted, not to accept the definition of OR but accept OR as an everyday tool particularly to evaluate alternative plans.
Operative market surveying is an important branch of market research; it has for quite some time been so neglected that several of the methods currently applied are not sufficiently developed and, indeed, hardly proven. For this reason the standard of our market monitoring system 24 does not cater to present day-today requirements and much less so to the emerging new conditions of our economy. In order to bring about substantial changes in these conditions, scientists and market researchers will have to work in close co-operation. What we need in the first instance are clear definitions of the tasks and of the objectives that are associated with the work of operative market research.
The distinction between operational research (OR) and market research is a clear one. The task of operational research is to predict and compare the outcomes of alternative management plans and decisions; the distinctive approach is to develop models which are representations in scientific, possibly mathematical terms, of the relevant factors and relationships of the system being managed. Often, but not always , a model is evaluated on a computer. Initially, such a model throws light on the effect of different management decisions; eventually with progressive refinement, it should predict them with more and more accuracy. On the other hand, the primary task of market research is to collect, summarise and sometimes interpret information about the world external to a marketing company - particularly data about the purchasers and potential purchasers of the company's products. Statistical analyses are sometimes made, but market research reports do not generally include the evaluation of alternative plans to assist the decision-making of management.
The distinction between operational research (OR) and market research is a clear one. The task of operational research is to predict and compare the outcomes of alternative management plans and decisions; the distinctive approach is to develop models which are representations in scientific, possibly mathematical terms, of the relevant factors and relationships of the system being managed. Often, but not always, a model is evaluated on a computer. Initially, such a model throws light on the effects of different management decisions; eventually with progressive refinement, il should predict them with more and more accuracy. On the other hand, the primary task of market research is to collect, summarise and sometimes interpret information about the world external to a marketing company - particularly data about the purchasers and potential purchasers of the company's products. Statistical analyses are sometimes made, but market research reports do not generally include the evaluation of alternative plans to assist the decision-making of management.
This year has seen not only the continued growth of market research in the U.K. hut also a number of developments which consolidate the scientific status of the profession. On a more general level two related developments are of considerable interest for the future. The first of these is the increasing interest that is being shown in an operational research approach to marketing and in the formulation of marketing models.
Management decision in the field of advertising is typically concerned with problems such as the size of the advertising budget, how the outlay should he distributed over time and within regions, what type of messages should be used and what media should be used to deliver them. Most of the published work in this area has appeared within the last three years, and there is every reason to believe that a great deal of the work which has been, or is being done, has never been publicly described. The few examples referred to in this paper are intended to illustrate some of the kinds of work which is being done.