Topics: Marketing, Operations research, Decision theory Pages: 34 (7319 words) Published: April 8, 2013
Decision Support Systems 38 (2005) 495 – 509

A user-friendly marketing decision support system for the product line design using evolutionary algorithms
Georgia Alexouda *
Department of Applied Informatics, University of Macedonia, 156 Egnatia Str, POB 1591, Thessaloniki 540 06, Greece Received 8 December 2000; received in revised form 6 September 2003; accepted 13 September 2003 Available online 28 October 2003

A marketing decision support system (MDSS) is presented. It has a user-friendly and easy to learn menu driven interface. Its purpose is to assist a marketing manager in designing a line of substitute products. Optimal product line design is a very important marketing decision. The MDSS uses three different optimization criteria. It examines different scenarios using the ‘‘What if analysis’’. Also, it finds optimal solutions only for small sized problems using the complete enumeration method and near optimal solutions for real sized problems using evolutionary algorithms. The user is not forced to be familiar with the underlying models.

D 2003 Elsevier B.V. All rights reserved.
Keywords: Marketing decision support systems; Product line design; Evolutionary algorithms; Heuristic methods; NP-hard problems

1. Introduction
More and more managers are faced with a rapidly
changing and highly competitive marketing environment. Marketing managers are forced to become more competitive through better decision making.
A decision can be considered as the output of a
productive activity whose inputs include intellectual
efforts of an individual or a group of individuals,
computing hardware and software, data, etc. The
advances in computer technology and the computerbased techniques for handling information allow the development of decision support systems, than can
play a crucial role in the progress of a firm [7].

* Tel.: +30-2310945898; fax: +30-2310891290.
E-mail address: (G. Alexouda).
0167-9236/$ - see front matter D 2003 Elsevier B.V. All rights reserved. doi:10.1016/j.dss.2003.09.002

There is an obvious need for tools, which can
improve marketing decision making. Many efforts
have been made to develop suitable software tools,
that can act as consultants for marketing managers.
There are many opportunities for applications of
information systems in the marketing area. The modern information technology and information systems can assist a company to manage the increasing information flow and improve its quality. There is a growing interest in the use of marketing decision

support systems (MDSSs) designed to be used in
complicated marketing decision making problems
An MDSS is defined as ‘‘a coordinated collection
of data, models, analytic tools and computing power
by which an organization gathers information from
the environment and turns it into a basis for action’’


G. Alexouda / Decision Support Systems 38 (2005) 495–509

MDSSs can be classified according to the questions they deal with. An MDSS has a functionality level 1, when it can answer questions of type ‘‘What
happened’’. These MDSSs can provide information
about customers, sales, competitors, etc. An MDSS
has a functionality level 2, when it can answer
questions of type ‘‘Why did it happen’’. These
MDSSs can analyze the effects of own and competitors’ marketing actions. They analyze causes of changes in the market. An MDSS has a functionality
level 3, when it can answer questions of type ‘‘What
will happen if’’. These MDSSs can forecast the effect
of marketing actions by using mathematical models to
compute the outcome of different actions. An MDSS
has a functionality level 4, when it can answer
questions of type ‘‘What should happen’’. These
MDSSs intend to find the best marketing strategy in
a given situation [41].
The product decision is one of the most important
decisions in marketing, because it is costly and...
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