Marketing Models: Past, Present and Future

Abstract

We all build models all the time. When we think about how a listener i5 likely to respond to what we say, we are using a "model" of that person's response (which we update every time we run an "experimentw-that is, have a conversation). We link cells together in spreadsheets at the office; we draw maps to provide directions for others. Every good salespersoi~ has a model of how a customer is likely to respond to different types of selling propositions. And every time we say, "I think that the best thing to do in that situation is X," we have used some model-based approach to determine that X was likely to be a better action than Y in that particular situation. However, we seem to use the same word, model, for a variety of things. What I will try to describe is how I classify formal models in marketing. I will then identify what areas of marketing have attracted notable quantitative model building efforts in the last decade and what the achievements in those areas have been. I will close with a look ahead.