Research on Modeling Industrial Markets

An understanding of customers’ needs and preferences is the foundation of any successful marketing strategy. A marketing manager, however, who has to decide on the allocation of his or her marketing budget, needs to know more. Basically, there are two approaches to assessing the return on marketing investments: (1) studying customer buying behavior and the importance of decision criteria, and (2) studying customer response to variations in marketing efforts. Both approaches yield guidelines on what marketing instruments to use and in what quantities. Simply asking customers or experts to rate or rank a number of variables gives a first impression of the importance of decision criteria or the effects of marketing efforts. However, to gain more insight, we need models that link customer opinions or marketing efforts to actual preferences or even purchases.