Vg. Morwitz et Dc. Schmittlein, TESTING NEW DIRECT MARKETING OFFERINGS - THE INTERPLAY OF MANAGEMENT JUDGMENT AND STATISTICAL-MODELS, Management science, 44(5), 1998, pp. 610-628
Citations number
33
Categorie Soggetti
Management,"Operatione Research & Management Science","Operatione Research & Management Science
The launch of a new product or service via direct marketing is nearly
always preceded by a test of that offering. Such a ''live'' test, cond
ucted with a subset of the entire list of customer prospects, can some
times be useful in a ''go/no-go'' decision regarding a full-scale laun
ch of the offering. More commonly, the test is used to direct the offe
ring more effectively toward the market segments that appear most prom
ising. Specifically, test results are used and useful to determine whe
ther a particular rental list of customer prospects should indeed be r
ented, and (for both rental and in-house lists) which specific custome
r segments should be contacted with the offering. This paper examines
the effectiveness of managers' decisions related to designing a test a
nd interpreting test results both conceptually-based on the literature
of heuristics and biases in expert judgments-and empirically, for two
new direct marketing offers. The paper describes how an interplay of
management judgment and statistical models can lead to increased profi
ts for new direct marketing offerings.