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Don't be intimidated by marketing mumbo jumbo.

One of the most difficult challenges marketing people face from top management is the need to quantify the probability of future events ("crystal-balling"). What are the odds that the current recession will end by midsummer? What are the odds that we will get a particular big job? What are the odds that we'll lose an important customer if we raise prices by 10%?

Most sales and marketing people in our industry understand that the value of quantifying depends on the accuracy of the numerical facts gathered, non-measurable data at hand, and the opinions of whomever must interpret and apply the findings.

They don't, however, understand management's need for a lot of numbers that have little relation to the realities of day-to-day marketing of castings. Just because the boss reads about Decision Theory and modeling, he expects his sales and marketing manager to quantify variables, measure options, build models and grow decision trees. He should be able and have the time to simulate, extrapolate and statisticate.

Such sophisticated techniques as Decision Theory have indeed established a place in both consumer and industrial marketing where staff specialists are available to do the legwork. Even though such techniques are not used much in our industry, casting marketing people should have some familiarity with new marketing methods and the language involved. However, it does not take a rocket scientist to know that customer behavior, for example, profoundly complicates, if not sinks, much of Decision Theory and many modeling techniques.

If you are serious about the marketing profession, whether it involves castings or widgets, you must keep your number thinking sharp. Don't be proud of being mathematically dumb. Otherwise, you will find yourself lagging well behind the nimble thinking of other people in your company, your customers and your competitors. All you really need for "numbers savvy" is an easy-to-follow book on basic mathematics. A knowledge of algebra and random numbers is really not required to understand today's more advanced marketing theories.

Grasping the basic concepts of modeling simulation will be an absolute requirement if you are at all serious about marketing. And applications of operation research, linear programing, game theory, probability theory, queuing theory, Monte Carlo methods, decision trees and CPM are going to be around for a long time. So, when people throw these terms at you, it will pay to know what they are talking about and to have at least a rudimentary knowledge of what these terms involve.

With continuing advances in electronic data processing, all business (including yours) will become even more obsessed with numbers-expenditures, costs, revenues, profits-and with number judgments. All will call for more and more scrutiny, interpretation and analysis. Marketing people particularly must be able to deal intelligently and effectively with numbers and to handle intricate and ramified chains of reasoning.

Again, you don't have to be a mental giant or know higher math to understand what is happening with numbers. But you do have to have a grasp of basic math. And don't let them dazzle you with esoteric terms that appear to throw the marketing function out of reasonable and practical perspective. Marketing Jargon

Here is a brief summary of the meaning of some of this jargon, which may help improve your marketing credibility quotient.

Simulation is essentially a "let's pretend" device where an activity is laid out on paper or with a computer to test strategies and potential outcomes. Where the solution of a problem is involved, a long sequence of choices called a "decision tree" is utilized. Branches of the tree represent major decision alternatives. Used in linear fashion, simulation can provide a great deal of flexibility in structuring a solution.

One type of simulation is PERT, which establishes a sequence of steps to accomplish an objective. Using PERT, these steps are arranged to identify priorities and establish a time line for each of the steps involved. Simulation has all sorts of marketing applications: maneuvering against competitors, pricing, managing assets, facilities utilization and more. it has become the scientific poker game of business.

Models are graphic representations of a situation, proposal or problem. They can be predictive, descriptive, behavioral or quantitative. Models come in all sizes and shapes and in all degrees of complexity. Currently in vogue are mathematical decision models made up of equations. Changing any of the numerous weighted variables in these equations serves to alter the outcome. Models don't really produce decisions; rather, they provide structured information to help marketing people make the right choices. Next: More on "Marketing Mumbo Jumbo"
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Title Annotation:Marketing
Author:Warden, T. Jerry
Publication:Modern Casting
Article Type:column
Date:Jun 1, 1991
Words:751
Previous Article:Discussions emphasize practical information.
Next Article:Chill testing: the effect of carbon equivalent.
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