The Effectiveness of Case-Based Reasoning: An Application in Sales Promotions

This paper deals with Case-based Reasoning (CBR) as a support technology for sales promotion (SP) decisions. CBR-systems try to mimic analogical reasoning, a form of human reasoning that is likely to occur in weakly-structured problem solving, such as the design of sales promotions. In an empirical study, we find evidence that use of the CBR-system improves the quality of SP-campaign proposals. In terms of the creativity of the proposals, decision-makers who think highly divergent (i.e., who tend to generate many, and diverse ideas in response to a problem) benefit most from prolonged system usage. Creativity, in turn, is positively related to the (practical) usability of a proposal. These results suggest that the CBR-system is most effective when it is used as an idea-generation tool that reinforces the strength of divergent (creative) thinkers. A convergent thinking style, in which case the CBR-system has a compensating role, even has a negative impact on CBR-system usage. Increasing the decision-maker's personal belief in the usefulness of the system, e.g., by training or education, may help to alleviate this reluctance to use the CBR-system.marketing management support systems;sales promotions;case-based reasoning;weakly-structured decision making

Analogical Reasoning as a Decision Support Principle for Weakly-Structured Marketing Problems

Veel marketing problemen zijn zwak-gestructureerd. Vanuit de psychologie weten we dat analoog redeneren een effectieve manier is om dit soort problemen op te lossen. Dat wil zeggen: één van de eerste dingen die een manager zal doen wanneer hij geconfronteerd wordt met een dergelijk probleem is in zijn geheugen zoeken naar eerdere, soortgelijke ervaringen (of cases) die zouden kunnen helpen bij het oplossen van het probleem. “Case-Based” Redeneren (CBR) is een geavanceerde techniek, afkomstig uit het vakgebied van de kunstmatige intelligentie, die deze vorm van menselijk redeneren nabootst en gebruikt kan worden om de grote hoeveelheid, op ervaring gebaseerde marketing kennis aan te wenden voor het nemen van beslissingen. In een aantal experimenten onderzoeken wij de effectiviteit en efficiëntie van het beschikbaar maken van een CBR-systeem onder verschillende condities. Hiervoor gebruiken we het ontwerpen van “sales promotie” campagnes als zwak-gestructureerd toepassingsdomein binnen de marketing. Deze dissertatie laat zien dat analoog redeneren helpt om marketing beslissingen te verbeteren. Om precies te zijn: we tonen aan dat een CBR-systeem helpt om betere, creatievere “sales promotie” campagnes te ontwerpen en om ze efficiënter te ontwerpen. Bovendien laten we zien dat de effecten van de beschikbaarheid van een CBR-systeem afhankelijk zijn van: (1) de inhoud van de “case-base” (d.w.z., nabije analogieën versus verre analogieën), (2) de grootte van de “case-base” (d.w.z., een groot aantal cases versus een standaard aantal cases), en (3) de karakteristieken van de beslisser (d.w.z., creativiteit). Interessant is dat we vinden dat het effect van de beschikbaarheid van een CBR-systeem op de kwaliteit van de oplossing het grootst is voor beslissers die minder creatief van zichzelf zijn. Verder laten we zien dat beslissers problemen hebben met het inschatten van de bijdrage van het CBR-systeem aan de objectieve kwaliteit van hun oplossing. Tot slot formuleren we een aantal aanbevelingen voor managers die gebaseerd zijn op deze bevindingen, zoals “leg marketing kennis vast en maak het beschikbaar in de vorm van cases” en “verschillende typen beslissers hebben verschillende typen CBR-systemen nodig”.Many marketing problems are weakly-structured. From the psychological literature, we know that analogical reasoning is an effective problem-solving method in weakly-structured decision situations. That is, when confronted with such a problem, one of the first things managers will naturally do is to search their memory for previous, similar experiences (or cases) that could help to solve the problem at hand. Case-Based Reasoning (CBR) is a state-of-the-art artificial intelligence technique that mimics this kind of human reasoning and can be used to put the vast amount of experience-based marketing knowledge into action for decision making. In a series of experiments, we investigate the effectiveness and efficiency of CBR system availability under different conditions. We use the design of sales promotion campaigns as our weakly-structured application domain in marketing. This dissertation shows that analogical reasoning does help to improve marketing decision making. More specifically, we demonstrate that a CBR system helps to design better, more creative sales promotion campaigns and helps to design them more efficiently. Furthermore, we show that the effects of CBR system availability are dependent on: (1) the content of the case-base (i.e., near analogies versus far analogies), (2) the size of the case-base (i.e., large size versus standard size), and (3) the characteristics of the decision maker (i.e., creative ability). Interestingly, the effect of CBR system availability on solution quality is largest for decision makers with a low creative ability (i.e., a compensation effect). Moreover, we show that decision makers have difficulties in recognizing the contribution of the CBR system to the objective quality of their solution. Based on these findings, we provide a number of recommendations for managers, such as “capture, store and make knowledge available in the form of cases” and “different types of decision makers need different types of CBR systems”

The Effectiveness of Case-Based Reasoning: An Application in Sales Promotions

This paper deals with Case-based Reasoning (CBR) as a support technology for sales promotion (SP) decisions. CBR-systems try to mimic analogical reasoning, a form of human reasoning that is likely to occur in weakly-structured problem solving, such as the design of sales promotions. In an empirical study, we find evidence that use of the CBR-system improves the quality of SP-campaign proposals. In terms of the creativity of the proposals, decision-makers who think highly divergent (i.e., who tend to generate many, and diverse ideas in response to a problem) benefit most from prolonged system usage. Creativity, in turn, is positively related to the (practical) usability of a proposal. These results suggest that the CBR-system is most effective when it is used as an idea-generation tool that reinforces the strength of divergent (creative) thinkers. A convergent thinking style, in which case the CBR-system has a compensating role, even has a negative impact on CBR-system usage. Increasing the decision-maker's personal belief in the usefulness of the system, e.g., by training or education, may help to alleviate this reluctance to use the CBR-system

The harmful neglect of decision support systems

A serious disconnect between how users perceive decisionsupport systems and how these systems actually perform could lead to “harmful neglect” of such potentially performance enhancing business tools. On the bright side, something can be done about it

The Value of Analogical Reasoning for the Design of Creative Sales Promotion Campaigns: A Case-Based Reasoning Approach

Many marketing problems, such as the design of marketing communication campaigns and the development of new products, require creative solutions. Such problems are typically weakly-structured and underspecified (open-ended). The authors investigate the potential of analogical reasoning as a decision support principle for this type of problems. They carry out experiments in a case-based reasoning (CBR) environment. The application domain is the design of sales promotion campaigns.The authors demonstrate that providing decision makers with analogies leads to more creative campaigns. Providing analogies is most effective for decision makers with a low creative ability. Furthermore, solutions become better when decision makers have a larger set of analogies to choose from. Far analogies have the potential of generating more novel solutions than near analogies, but there is a higher threshold for using them. Interestingly, decision makers do not recognize the contribution of the analogies to the quality of their solution. On the practical side, the authors provide an effective tool for supporting decision making in weakly-structured marketing problem areas.decision support systems;analogical reasoning;creative design;analogieën;sales promotion campaigns