Dss effectiveness in marketing resource allocation

Publications Professor Rangaswamy joined Penn State in He has previously been a faculty member at the Wharton School, University of Pennsylvania and at the J.

Dss effectiveness in marketing resource allocation

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We focus on identifying whether and how DSSs influence the decision process e. We study two specific marketing resource allocation decisions in a laboratory context: We find that decision makers who use high-quality, model-based DSSs make objectively better decisions than do decision makers who only have access to a generic decision tool Microsoft Excel.

However, their subjective evaluations perceptions of both their decisions and the processes that lead to those decisions do not necessarily improve as a result of DSS use.

And expert judges, serving as surrogates for top management, have a difficult time assessing the objective quality of those decisions. Our results suggest that what managers get from a high-quality DSS may be substantially better than what they see. Our results also suggest two ways to bridge the perception-reality gap: For example, we must all determine our budget for food, necessities, and leisure activities and allocate those budgets within those categories.

We must also determine how much of our time we will work each week and how much of our remaining time we will spend with our children, surfing the Internet, watching television, and the like. Firms continually face such resource allocation challenges.

They must determine how much to spend on new product development and how to allocate those funds across projects and time. Charitable organizations must determine what their development budget should be and what past donors or prospects to target.

Manufacturers must decide how much plant capacity to invest in and where that capacity should be placed.

This taxon- ers who must resolve problems, and the characteristics omy of IS success measures applies to the DSSs we of the available DSSs, especially how appropriate they study: We address both the individual and the orga- are for the tasks faced by the decision makers. nizational impact of DSSs and distinguish two cate- A priori, we can. Lilienetal.: DSSEffectivenessinMarketingResourceAllocationDecisions InformationSystemsResearch15(3),pp–,©INFORMS helpedformSimon’s( Key words: DSS; marketing models; decision quality; decision process; resource allocation ***** Introduction The determination and allocation of a budget (of time or resources, financial or otherwise) is a pervasive human activity.

While it would seem then, that in an area of such importance, we would have substantial and definitive evidence about the benefits and costs of using decision support aids for resource allocation in various application domains, such is not the case.

For example, Agarwal et al. Indeed, there appears to be only modest evidence to support the belief that model-based DSSs can help improve business decisions of any sort Sharda et al.

We focus here on one domain for specificity: And while there is some evidence of the effectiveness of model-based systems to support such decisions, the adoption rate of such systems by firms remains far below potential Wierenga and Van Bruggen Is the apparent low level of adoption of decision support models in marketing because of their inherent lack of value, because their value perceived or actual is not sufficiently high for the adopting organization to incur the costs that the adopting individuals may be forced to bear, or because of some combination of these factors?

We study these issues by exploring how DSSs influence the decision process e. We study two specific marketing resource allocation decisions, i. We define a DSS as a packaged software application that uses analytical models to transform business data into numerical and graphical reports to help users make business decisions more easily and effectively.

In our conceptualization of DSSs the presence of built-in analytical decision models is essential, distinguishing a DSS from a more general-purpose tool like Excel. Also, DSSs for resource allocation differ on analytical model sophistication, ranging from relatively simple descriptive response models to sophisticated normative optimization models providing problem-specific recommendations.

In this study, we investigate the effects of two quite sophisticated DSSs for resource allocation. There have been several studies on the effects and effectiveness of marketing DSSs, including DSSs designed for resource allocation.

Only a few studies have examined how a DSS affects the decision process, and the few that have, have not investigated how the DSS influences both the process and the outcomes. The studies report mixed results regarding DSS effects on outcomes.

Most studies in the marketing literature report that DSSs improve marketing resource allocation decisions, with the notable exception of the study by Chakravarti et al.

However, the broader DSS research reports mixed findings in laboratory studies on the effects of DSSs on decision outcomes see Sharda et al. Of the 11 studies that Sharda et al. We note three issues with respect to the past studies.Abstract: This paper concerns the design of decision support systems (DSSs) which help financial managers in evaluating proposals for strategic and long-range planning.

With the proposed two-phased DSS, projects are first selected from a given pool according to greedy heuristics based on the project’s preferences as well as the project’s efficiency.

Title: DSS Effectiveness in Marketing Resource Allocation Decisions: Reality vs. Perception Created Date: Z. This study investigates decision support systems (DSS) by assessing the factors that enhance their perceived effectiveness and their impact on performance.

This was achieved by using a simulation exercise with senior graduate students who developed DSS and reported on the systems created. This taxon- ers who must resolve problems, and the characteristics omy of IS success measures applies to the DSSs we of the available DSSs, especially how appropriate they study: We address both the individual and the orga- are for the tasks faced by the decision makers.

nizational impact of DSSs and distinguish two cate- A priori, we can. DSS Effectiveness in Marketing Resource Allocation Decisions: Perception vs () Cached. {DSS Effectiveness in Marketing Resource Allocation Decisions: Perception vs}, journal = {Reality’, Information Systems Research}, year = { ds effectiveness marketing resource allocation .

2. Approaches for Resource Allocation The process of marketing resource allocation consists of two stages. In stage one, a model of demand is estimated.

Dss effectiveness in marketing resource allocation

This model empirically assesses the impact of marketing actions on consumer demand of a company‟s product. Ideally, the model also includes competitive activities.

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