Integrating strategic thinking and simulation in marketing strategy: Seeing the whole system (original) (raw)
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2003
System dynamics models have been used to address strategic questions in many hundreds of companies and government agencies around the world over the past 40 years, including a broad range of organizations in the transport sector. However, this technique remains less well known than other approaches among potential client organizations and within the simulation community. This paper provides a pithy tutorial on the system dynamics method and the modeling process, uses transport sector case examples to illustrate how such models have been valuable in practice, and compares key characteristics of system dynamics to discrete event simulation. We close with some guidance on factors to consider when selecting an analysis approach that is appropriate to the problem under study.
Marketing systems: A Listen, Learn, Leverage Framework
Journal of Macromarketing, 2020
Macromarketing provides the conceptual ground to understand marketing dynamics in a systems setting. Social marketing offers an implementation platform through which collective behavioral change may be accomplished. Qualitative system mapping from systems thinking delivers potentially powerful tools for macromarketing and social marketing in their nonlinear causality pursuits. The central theme of the paper is to unveil the marketing dynamics of a complex problem. A MAS informed social marketing systems approach is presented through an inter-disciplinary case study to address the complex challenge of increasing influenza vaccination rates in a hospital systems setting. We identify the dominant behavioral and structural dynamics blocking the desired collective behaviors which present potential opportunities to interrupt the system's current trajectory. We capture the paradoxically contradicting group choices to systemic outcomes. We show how highly participatory understandings can act as the basis for integrated multilevel, multi-stakeholder interventions to alter the evolutionary patterns over time and space in a system. We conclude that the listening, learning and leveraging processes of undertaking qualitative marketing systems dynamics mapping for collective behavioral change are a potent way forward.
Applications of system dynamics in marketing: Editorial
Journal of Business Research, 2008
This special issue of the JBR illustrates a range of applications of modeling and simulation from the system dynamics perspective to problems in marketing and related areas. The papers pertain to the diffusion of new products and technologies, advertising effectiveness, management decision-making, forecasting, project dynamics, and innovation and leadership. Papers presented in this special issue were selected from submissions to attend a two-day workshop on applications of system dynamics in marketing, held at the
System dynamics for business strategy: a phased approach
System Dynamics Review, 1999
Detailed, calibrated system dynamics models oer an eective tool for supporting business strategy. They correspond to the business lines and planning approaches of the organization, serve as an important check on the adequacy of the model as a representation of the system, provide accurate assessments of the cost±bene®t tradeos of alternative strategies, and allow results to be more easily sold to others. However, detailed models also have disadvantages: they are complex, can be more dicult to understand, and run the risk of becoming``black boxes''. This paper discusses a four-phased approach to consulting that, building from other system dynamics modeling styles (``systems thinking'' and small, insight-based models), oers an eective means of developing detailed models while simultaneously educating the client. The approach is illustrated with case examples from the credit card and aircraft industries.
Marketing competition on a new product introduction - a structural analysis using systems thinking
International Journal of Markets and Business Systems
Launching a new product on the market is a strategic activity that needs specific investments and a specific organisation. There are multiple factors that determine the success of a new product on the market but their direct effects are not often very well observable (marketing for example). With this study, we analysed the systemic structure underlying the dynamics related to the introduction of a new product on the market. In particular, we built a qualitative model based on the systems thinking methodology of causal-loop diagrams (CLDs), starting from the main structure and assumptions of the well-known Bass model. The model provides a systemic perspective on the interdependencies among various aspects that interact in important organisational areas. The presented causal-loop diagram tries to describe the systems structure which is intrinsic to the introduction and diffusion of a new product on the market, and how ultimately the related dynamics could be managed.
STRATEGIC MARKETING PLANNING: CHALLENGING THE DOMINANT PARADIGM
This paper contends that the conventional rational and sequential model of strategic marketing planning is flawed in that it fails to take into account the subjective and discontinuous worlds of marketing managers. It is proposed that in order to better understand marketing decision-making and planning in organisations, a phenomenological perspective should be adopted which moves away from universal, prescriptive systemic- based approaches. Further research, utilising the phenomenological interview, should aim to examine the local circumstances and practical reasoning used by marketing managers in their ‘life-worlds’, as they go about making marketing decisions.
Strategy research and the market process perspective
1998
We argue that strategizing fundamentally concerns disequilibrium phenomena, such as discovery, innovation, resource-combination, imagination-in short, entrepreneurship. Therefore, the understanding of strategizing is likely to be led astray by drawing too heavily on equilibrium theories. Arguably, the three dominant economic approaches to strategy-the Porter industry analysis approach, the new industrial organization, and the ressourcebased approach-are characterized precisely by their strong reliance on equilibrium methodology. ...
An introduction to the viable systems approach and its contribution to marketing
2012
Organizations are increasingly challenged by dynamism and turbulence that determine conditions of complexity in decision making. The aim of this paper is to highlight the need for a general frame of reference for management and marketing and to justify why adopting a systems approach is adequate at both theoretical and practical level. Specifically, the purpose of this paper is to explain why a systems approach is needed to understand business and market dynamics, and why the VSA may represent a good integrator of management and marketing theories and practices. The paper begins with a brief review of systems theories that have been proposed in the general context of management and marketing. It proceeds by illustrating the fundamental principles and concepts of the VSA and its contribution to marketing. The paper closes by discussing future research avenues and suggesting implications for researchers and practitioners.
… Targeting, Measurement and Analysis for Marketing, 2003
This paper contributes to the literature concerning the marketing strategy process. It reviews the extant literature in this field, drawing out areas of consensus and gaps in that literature. The principal gaps identified concern non-rational strategy making processes and the combined implications of internal and external contingencies. Using well-established theories from the sociological perspective of the organisational behaviour literature, this work proposes relevant questions for future research in this field.
Marketing dynamics: How to Create Value for Customers
compare data, and analyse the characteristics of offerings from a variety of globally accessible sources. Thanks to social networks, they can do this 24 hours a day, seven days a week. While competitive advantage was once based on low costs, differentiation and focus, today it is linked to quality, speed and innovation. In the past, the key drivers of growth and development were cheap labour and capital, whereas today they are knowledge, ideas, innovation and technological advancement. Where the Internet is concerned, technological trends involve digital communication and virtualisation. Mechanization and automation are now considered trends belonging to the old economy. While organisations had a bureaucratic and hierarchical structure in the old economy, in the new economy they are organised and networked. The tendency is to move away from mass production towards flexible production that enables manufactures to more readily adjust to the specific needs of consumers. Now relationships with other organisations in the marketplace are based on partnerships rather than on competition. Special attention is given to knowledge and research, which are seen as key sources of progress. 1.2. Development of the business concepts Marketing theories have developed parallel with, or proactively to, successful business practices. The first and so-called Classical School is linked to the period from the beginning to the middle of the last century. It was based on the comprehensive observation of the behaviour of actors in the market, and its teachings relied on classical economics and sociology to explain and understand market regularities. A newer way of looking at the marketing phenomenon was linked to studying market regularities from the perspective of marketing effort. This approach was connected with the Managerial School, which focused the behaviour of individuals by applying knowledge and techniques from the social sciences. The next school, the Consumer Behaviour School, focused on the behaviour of individuals regardless of whether consumers were physical or legal persons. It also applied knowledge BUSINESS CONCEPTS 9 While many organisations held on to the production concept, many others began to practice the sales concept. They focused on maximizing their sales over the long term, because they were over-capacitated and needed to sell their products. Their reasoning was along the lines that they needed to sell what they produced, rather than produce what the market wanted. The sales concept involves engaging specially trained sales personnel whose efforts are paralleled by considerable investment in proactive activities aimed at providing information to consumers and encouraging them to buy products. Varying degrees of success and market dynamics encouraged a new way of thinking and helped to introduce the marketing concept. Products were no longer seen as the result of production capacities, but rather as the outcome of market needs. More and more organisations began to focus on researching the needs of the market and take these needs into consideration. Unlike the early market that was predominantly a seller's market, the market was now becoming a buyer's market. Relations on the market were becoming more complex, and competition was growing. In such conditions, demand on the market-that is, consumer needs and wants-became a vital reference point. The objective was no longer to ensure increasingly greater production and sales, but rather to meet consumer needs to the largest extent possible. This led to the marketing concept. The marketing concept in business is about identifying and satisfying the needs and wants of consumers on a selected target market and doing so more efficiently than the competition. The purpose is to generate income for an organisation. Business operations are based on developing long-term cooperation with consumers, delivering value to consumers, and meeting the needs and wants of consumers beyond their expectations. Hence, organisations began focusing their interest on consumer needs and wants, and on making their offerings different from those of their competitors. To achieve this, all activities, including production and finance, needed to be integrated within each organisation. This historical review of the development and characteristics of business orientations gives rise to the question: Which concept is the most suitable in business operations? While many argue that the marketing concept, based on consumer needs and wants, can be the only "winning combination", the fact is that this does not necessarily have to be so. There are BUSINESS CONCEPTS 11 factors can be classified as factors that exert an indirect effect and factors that exert a direct effect. The former can be found in the macro marketing environment and the latter in the micro marketing environment. Factors that have an indirect effect come from an organisation's macro environment and are linked to the special features of the culture of a given environment, the level of technological development, the power of economic forces, the importance and role of ecology, the influence of political factors, demographic trends, the legal framework of operations, the characteristics of the natural environment and other factors. Four factors in the macro environment are considered as having the greatest impact on organisations. These are politics, economics, social factors and technology, and they are analysed using PEST (political, economic, social and technological) analysis. 10 Section 2.2 looks at the individual features of factors in the macro environment and examines PEST analysis.