Marketing and Operational Research

My impressions are that in the United Kingdom, surprisingly few O.R. scientists have published papers relating to marketing. The U.S. O.R. society, INFORMS, publishes a journal devoted to quantitative marketing, but there is no comparable interest in the U.K.. Over the years, I have had one or two encounters with projects relating to some aspect of marketing, but have never got a sense that marketing departments use O.R. advice very much. Some of the projects have started with the adage "Half the money spent on advertising is wasted -- but nobody knows which half; if you knew which half, you would make a fortune."

In my postgraduate course we came across a problem which I have never seen written up, perhaps because the problem was trying to build a model to explain some anomalous data and the parameters would have been a commercial secret. So here, nearly forty years after it happened, is a summary.

For many years, the dominant company in the U.K. market for potato crisps was "Smith's". They held over half the market. Then a new brand was launched, called Golden Wonder. Over the subsequent few months, surveys were carried out to try to measure brand awareness. The problem was that the percentage answering the question "What was the brand of crisps that you last bought?" with "GW" was far lower than the percentage market share for GW. Why?

The answer was inertia and lack of awareness of the brand. Purchasers would ask for a "packet of crisps" and since most shops (and especially bars) only stocked one brand of an item that occupied a lot of storage space, the purchasers accepted what they were given and did not associate their purchase with a brand -- and Smith's had been the leading brand for so long that the association was "Smithscrisps" as one word.

So, as students, we were asked to re-work what the consultants had done, and build a model to link the growth over time of the sales and the growth over time of the awareness. It taught us about building and fitting nonlinear models, and a little about the vagaries of our fellow humans. But it could never have been written up as a paper!