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Power as a predictor of industrial complaining styles in a buyer/seller relationship; the buyer's perspective.

The challenge of competition has put growing emphasis on customer retention and strategies such as relationship marketing. This not only poses questions of development of appropriate marketing strategies but also raises concerns about business ethics and the need to incorporate ethical considerations in strategy. Here we offer you a precis of an article focusing on the links between customer complaints and the power wielded by the marketer, followed by selected references to other articles which focus on the theory and practice of relationship marketing

Building the wise computer

There is a difference between intelligence and wisdom. In simple terms intelligence is an innate, fundamentally unchanging faculty while wisdom is, in part, a function of time - we tend to get wiser as we get older. No one denies that senior managers need considerable intelligence. But at the same time much of their contribution comes from their wisdom and experience.

If we accept the significance of wisdom in successful strategy-making then any computer that contributes to such a process needs elements of that wisdom. Assuming of course we don't just see the computer as a source of intelligent information available to the executives and their advisors.

When we look closely at the areas where computers have had the greatest impact they are either routine operational matters or tactical decisions. The setting of strategy, the provision of leadership and the long-term mission of an organization are, as Duan and Burrell suggest, dominated by "high uncertainty," a "loose casual structure" and "incomplete and dispersed knowledge". In short, strategic decision making is the realm of intuition. And intuition relies on wisdom rather than facts. We talk of something "not feeling right" or "not the right direction for the organization" without any expectation that such instincts need substantiation by facts.

Is this intuition based on experience an ineffective way of determining strategy? Certainly the marketing scientist argues so. Yet the great "scientific" insights into strategy have come in how to arrive at a strategy rather than what to decide. For some there exists a holy grail somewhere. A simple in concept yet complex in formula method for businesses to develop strategies appropriate to the environment of the time.

Like those science fiction authors who saw the ever greater sophistication of scientific market research enabling detailed predictions of the future the advocates of databased strategic review have confidence in the ability of science to resolve our marketing problems. Culminating, no doubt, in something akin to John Brunner's idea of a US presidential election decided by a scientifically determined single voter.

This article argues that the successful incorporation of computers into strategic planning needs a hybrid solution. Duan and Burrell note the differences between those who see expert systems as a (future) tool for strategy-making and those skeptical of such claims. They go on to assert that the expert system needs combining with a decision support system for an effective solution.

Yet, as the authors make clear, the problem still remains. Yes, expert systems can "learn" and in that way acquire a kind of computer wisdom. But it is, to use a common term these days, only a "virtual" wisdom, not a real wisdom in the same way that computer intelligence is a "virtual" intelligence. And, since wisdom is an intangible aspect of mind, pinning down what makes one person more effective than another could prove difficult. Without such a definition we rely on the vicarious measurement of wisdom making the computer still more susceptible to error.

As Duan and Burrell observe " we get the knowledge out of the head of an expert in order to put it into the computer, will be critical in determining the success of an expert system." This knowledge acquisition process becomes more difficult when, as Duan & Burrell say, knowledge is "...not just facts" and expressing how decisions are made in a way the computer can swallow is difficult. In the end we rely on a possible expert (remember that tomorrow's decision may fail where yesterday's succeeded) describing a decision-making process only slightly understood.

By adding a decision support system we get back to the realm of manageable facts. The computer works with real data and nobody expects it to come up with a strategy. Instead it gets on with what computers are good at: analysing data and ordering facts so people can grasp the implications of large data sources. Combine this with an expert system where the machine gets better over time (at least in theory) and we have the makings of a useful planning tool. Rather than try to create some kind of artificial wisdom to match artificial intelligence we have a way of improving environmental understanding and in doing so the quality of strategic decision making. Instead of trying to replace the strategic planner with a "black box" we try to accelerate how those planners become wise.

Duan and Burrell take the debate about expert systems and the use of computers to aid strategic decision making one step further. They do not provide a definitive answer, nor would it be fair to expect them to - but they do show that the groundwork of strategic planning is a place for computing. Since computers are best at tactical and operational problems it makes sense to use them in streamlining and improving the operation of a strategic planning process. What they can't do is even begin to replace the intuitive process of taking risks - a process at the heart of strategic planning.

It may be that in the not too distant future computers will take on aspects of wisdom. But to do so they require sentience and understanding - what the theologian might call a soul. It is this aspect of the human mind that creates wisdom. And, as we all know, having an enormous brain does not guarantee good decision making. Other less defined areas of our psyche contribute as well.

I'm afraid we'll have to carry on making our own decisions rather than hope for computers to rush to the rescue. Even with efficient and effective systems such as that proposed here we will fall back on those aspects of our mind we understand least well - intuition, emotion, prejudice and, above all, wisdom.

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Further reading

Customer-focusing receives attention in several articles in the Marketing suite. Retail credit usage as a source of information on consumers' purchasing behaviour with a view to fostering customer loyalty is explored in Journal of Consumer Marketing, Vol. 23 No. 2, 1996.

Student banking comes under the spotlight in an article in International Journal of Bank Marketing which emphasizes the value of retention economics in gaining competitive advantage. The article points out that university students' accounts are a particularly illustrative case given their lifetime value in terms of future revenue streams. See International Journal of Bank Marketing, Vol. 14 No. 3, 1996.

But what of ethics in all this? The moral nature of business is frequently debated but should there not also be ethical evaluation of business practices such as relationship marketing? For an analysis from the viewpoint of ethical theories, and a framework for the ethical analysis of relationship marketing principles, see European Journal of Marketing, Vol. 30 No. 2, 1996. Interestingly, the article also suggests that a code of business ethics for relationship marketers could ultimately improve competitively and profitability.
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Title Annotation:The Global Forum for Marketing and Logistics
Publication:European Journal of Marketing
Date:Nov 1, 1997
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