A Shotgun Marriage of Mathematics and Marketing?

C. MERLE CRAWFORD A Shotgun Marriage 37 of Mathematics and Marketing? III the management of many firms, especially in production, inventory control, and ware- oP corporate management is dedicated to housing. Mathematical models are set up to the continuing search for better ways of T describe common business situations, the doing business. Over the years this search intent being to provide a framework for has uncovered many new and valuable tools analysis and prediction in areas where the -scientific factory management, budgeting, complexity of many variables defies com- marketing research, data processing, and prehension by the mind alone. many others. To date, the marketing department seems Today, much attention is being given to to have found mathematics of little assis- mathematical tools, variously called opera- tance, and top management may well be tions research, management science, or bus- wondering whether the reluctance to use it iness mathematics. All indications are that comes as a result of ( 1 ) basic inconsistencies this approach is rapidly finding a p/ace in between the new tools and marketing problems or (2) a built-in reluctance on the part Mr. Crawford is Associate Professor of Marketing, of marketing executives. Stated more co- University of Michigan. gent/y, is there any justification for the SUMMER, 1966 C. MERLE CRAWFORD skepticism with which marketing executives marketing organization can spawn is often seem to be greeting the use of mathematical a measure of its success."1 models? Such striving for change is motivated My contention is that there is indeed justi- partly to put the company a step ahead of fication, which stems primarily from the lack competition, partly to match change intro- of realism among model builders (mathema- duced by competition, and partly to call the ticians) and from a lack of understanding significant turns in an industry before they and involvement by marketing executives happen. Yet the driving persistence of with this new science. Whether mathematics the need for change and innovation seems to will ever play a significant role in marketing have avoided the onslaught of mathematics, is yet to be determined. for the time being anyhow. As might be ex- Does this view make marketing executives pected, the executive will perceive little as- laggards? Should top management push sistance from mathematics on this important more to stimulate a speedup of the learning marketing function. He may find models to and involvement process? In some firms the assist in allocating the media budget, but he answer is yes, but generally it must be no, for probably will not find models to develop the simple reason that mathematics is not ideas for new products or over-all promo- yet ready for such a shotgun marriage. There tional platforms. are powerful and devastating roadblocks to Even the general area of decision making 38 communication between mathematicians must be greatly stretched to permit the and marketers, and, until they are dimin- premise that "Marketing management can ished, any forced application to marketing be viewed simply as the continuing attempt operations will reduce eflqciency, not in- to recognize and solve specific marketing crease it. These roadblocks to communica- problems. ''2 If decision-making techniques tion arise from the very nature of marketing are necessary, for example, to determine the and the top marketer's task, from the ma- next innovation in a particular industry, then thematical techniques and processes them- the executive would most assuredly be in- selves, from oral and written mistakes made terested in mathematical models. At present, by mathematical researchers, and from the however, they seem to offer little promise in sometimes rather unscientific posture of the this critical aspect of marketing. mathematical scientists. In sum, change, creativity, and innovation are the essence of marketing, and the executive might be pardoned his belief that mod- BLOCKS ARISING FROM els are fine in selected mechanical areas of NATURE OF MARKETING marketing, but not in these most critical ones. MODEL INABILITY TO HANDLE CBEATIVITY Mathematical models work best when ap- MODEL INABILITY TO HANDLE GOALS plied to mechanical functions, where all significant variables are tangible and quan- A basic premise in the development of most mathematical models is that they relate the tifiable. But the top marketing executive would probably say that his major function is creativity. As the editors of Sales Manage- 1 "Significant Trends," Sales Management (Aug. ment recently said: "Marketing's greatest 21, 1964), p. 81. strength is also one of its greatest weak- 2 H. V. Roberts in R. E. Frank, A. A. Kuehn, and W. F. Massy, eds., Quantitative Techniques in Mar- nesses. Its greatest strength is change; in keting Analysis (Homewood, II1.: Richard D. Irwin, fact, the amount of successful innovation a Inc., 1962), p. 3. BUSINESS HORIZONS I'elAtLRIAGE OF MATHEIVfATICS AND ~¢IARKETING.p goal of the enterprise to the topic under reports concerning the widespread adoption study. Such goals (for example, maximiza- of model building among business firms in- tion of long-term or short-term profits, or dicate no awareness of the many human rea- sales) must be few in number since they sons for such programs; rather, they infer serve as constraints in the system of equa- that the socially acceptable motivation of tions. increased business efficiency is responsible. The executive's problem is to understand But other motivations are possible, too. how one or a few such tangible goals can be Has the pride of the president ever been the selected from a complex system of goals to basis for a new system? Was there a desire control the calculation. The goals sometimes to impress the board of directors? During become quite personal, and are usually lush times, is there motivation from the "We geared to blend the desires of several indi- can afford it" school? Does it ever happen viduals, including the executive and others that a finn installs a computer system for the in the firm whose feelings must be consid- routine handling of accounting data, and ered. They also change frequently, as organ- then, finding huge unused capacity, decides izations themselves change. to use this idle time? Finally, has any de- Faced with this dynamic complexity of partment or division head ever used a new goal structure, model builders remain un- tool like mathematics in an effort to polish daunted, insisting that goals be spelled out his image among his peers or impress higher and quantified. The attitude seems to be, management? To the extent that the latter 39 "The equations must go on"-but the mar- reasons prevail, business use of models is keting executive may have left at intermis- not a testimonial to their helpfulness. sion. Second, every operating marketing unit consists of people, with the usual collection DIFFICULTY WITH THE HUMAN FACTOR of strengths, weaknesses, doubts, insecur- ities, drives, and ambitions. Even the best In two respects, current attempts at selling scientific solutions to problems must still go mathematical models for use in marketing throngh the human wringer before they can seem to ignore the human problem. First, be used; in fact, the problem statement it- !t SUMMER, 1966 C. MERLE CRAWFORD self, and much of the data and assumptions ing executives are easily repelled by "assis- used in the calculations, must pass through tance," which, as they see it, simply is not human minds and hands before the calcula- practical. For instance, a lengthy article on tions can even start. If problem solutions, model building, published a few years ago, like organizations, can be made to work ff listed the various mathematical approaches people want them to work, what, on balance, available, and began an explanation of the is the contribution of the new science to the first one (matrix algebra) as follows: "Past enterprise? Might the executive be pardoned records show that on the average it takes a concern over the aseptic, research labora- hour of sales effort and $1 of advertising ex- tory solutions to his problems? penditure to produce a sale in the first market; ,~ hour.., in the second market .... -3 This type of statement, perhaps necessary INAPPROPRIATENESS OF CASE HISTORIES for construction of a matrix algebra model, Mathematical enthusiasts are rapidly over- would appear strange to most marketing coming the problem of a lack of case his- executives since, though they might dearly tories drawn from the marketing field. All want such information, they simply do not too often in the past, illustrations have been have it. drawn from nonprofit areas such as the gov- C. West Churchman, a staunch proponent ernment, the military, and so forth. To the of mathematical models in marketing, re- 40 marketing executive, there is little connec- cently put the danger this way: "Hence, tion between managing a nonprofit opera- there must be a real concern about the relia- tion and staying alive in his business; the bility of mathematical models.., one great sooner he hears of relevant marketing case risk of being able to think rigorously is that histories, the sooner will his interest we may continue to go down the wrong path- heighten. way, forgetting the assumptions that started the thinking process in the first place. "4 Although further development of mathe- MATHEMATICAL TECHNIQUES matical techniques may eliminate most of these troublesome assumptions, a peculiar It is, of course, impossible to differentiate tendency still remains in the thinking of unequivocally between problems in apply- model builders that assumptions are neces- ing a particular technique and the problems sary to achieve understanding by executives, of understanding those who attempt to ex- that a complete model is too complex for plain the technique. In the case of mathema- comprehension.

Load more