Decision Making in Marketing Communications

It has been a long while since Operations Research (OR) was first expected to play an important role in company decision making rationally and quantitatively. Although the concept and methodology should be applied to the Marketing Communications field, it doesn't seem to be common yet.

We can assume the following hypotheses/reasons why OR is not fully utilized in Marketing Communications:

• Data accumulation problems (not conducting appropriate research for econometrics)
• Data interpretation issues (data is considered as a "result", not regarded as a "future indication")
• Data allergies (metrical approaches like data modeling/mining are too complicated to believe)
• Too much confidence born from own feelings and experiences (unexpected results of research are ignored)

 From my experience in this industry, the Marketing Communications field, such as 'advertising', seems to strongly show the above trends. This field requires "innovation and creativity", as a result, it is likely to undervalue past data and research outputs. These are exact characteristics which Anzoff and Simon indicated as low structural problems due to irregularity and demand of strong creativity.

However, Marketing Communications play a significant role in establishing the brand identity, which impacts mid and long term businesses and always garners strong attention from stakeholders due to the high cost volume. Therefore, we should consider more appropriate decision making approaches. Nowadays, it is said that the average administration period for a CEO in the United States is 36 months; contrarily, that of a CMO (Chief Marketing Officer) is under 24 months. I think that one of the reasons for this is the opaque process of decision making (lack of enough examination and definition of KPI, responsibility). Thus finally this is likely to deteriorate the healthy growth of the brand.

 It is becoming a complicated job to control the decision making process exhaustively due to diversification of marketing tasks and the increase of information. However, now marketers are required to develop the skills of "flexible handling of various information and advance scenario making for decisions" Naturally, businesses need a 'result', but we can not expect continuous growth only based on that. This is because our standpoints for evaluation and implication from now into the future will be differentiated based on whether we have a pre and post consensus for our 'best choices'.

OR is one of factors which verifies business opportunities and risks. Taking this into account along with marketers' beliefs and experiences, the decisions will be more persuasive and accountable. In other words, OR is one of the factors (support elements) for 'best' decision making. It may be able to decrease some of the emotional barriers I mentioned earlier if we can regard OR as that. As a recent Prospect Theory, people's choices are affected by emotions and are not always logical (we are not economic-man). And our decision making within the business arena is the same. Considering this, we should make decisions more carefully and exhaustively. This kind of process will be a great asset for the brand.

How to support the decision making process structurally and involve many stakeholders fairly is the challenge we relish in our consulting work.

Written by Keiichi Ozawa (Director)

Please contact us with questions or for more detailed information.
spiindex@spi-consultants.net