Simulations are increasingly helping to estimate market response by studying the product’s complex relationships. They help in examining complex problems to create dynamic marketing strategies.
Marketers from top manufacturing firms are increasingly using simulation to compute a large number of interrelated variables and environmental conditions to assess the performance of a product or campaign.
The marketer is an active participant in the entire simulation process as they can tailor the simulation in a variety of situations to check the responses. The master plan behind the use of computer simulation in marketing management is to reproduce marketing behavior in an artificial environment and observe the probable effect of changes in external variables. Such observations help to evaluate and measure the implications of alternative marketing strategies. Experts from the marketing background rely on simulation models to conduct experiments on the screen instead of experimenting with the real market.
Different initial assumptions and experimentation help marketers to estimate the impact of various campaigns on the market and derive the “best” course of action accordingly. The reason for the growing popularity of simulation models for marketing is their ability to examine alternative marketing strategies rapidly, relatively cheaply, without much investment in resources. Simulation as a marketing game, therefore, enables marketing managers to obtain realistic experience in decision making by analyzing strategies to comprehend the competitive behavior in a simulated environment.
MNCs are moving to the Total Market Environment Simulation (TOMES), which is the most complete and comprehensive simulation system, analyzing the entire marketing environment containing populations of consumers, distributors, retailers, and salespeople. This helps firms to manage competing companies in the simulated environment to aid several marketing decisions.
Simulation techniques are applied to multiple aspects of marketing management to aid decision making by gaining insight into a system as a guideline for research. It provides a flexible computer-based training device, demonstrating the anatomy of the industrial buying process, testing its sensitivity to marketing inputs. Investing in the development of simulation processes help industries to set up a guideline for future research, stressing on areas where potential results seem to be essential to understand the industrial buying behavior.
Simulation cleans up the communication process by enabling data-based predictive interactions in the marketing system involving transfers of policy statements, promotional information, performance feedback information, orders, and payments, along with the product and service flows. At the core of the B2B marketing processes it’s the buying organization, which demands adequate knowledge of the buyer’s behavior and expectation. Simulation helps in estimating industrial buyer’s decision process and probable response to various marketing variable.
Leading manufacturing firms are welcoming the micro analytic simulation process to have a parsimonious representation of microstructures that enables smooth handling of highly complex microstructures. By encompassing assumptions and knowledge regarding market behavior, the micro analytic systems provide means of relating to management actions triggering a purchase.
The judicious application of computer simulation techniques into the marketing processes aid decision-making, improving managerial understanding of handling complex marketing problems. Simulations ultimately help in evaluating and selecting alternative marketing strategies to enhance decision making, ensuring the success of management’s marketing policies.