A tactical model for resource allocation and its application to advertising budgeting

Models for optimal product positioning have received considerable attention by marketing researchers and marketing scientists over the past decade. Typically, optimizing models take the viewpoint that the manager wishes to find a specific vector of product attribute levels that, in the face of competitors' product profiles, maximizes the firm's market share (or, perhaps, return) over some designated planning horizon. This class of models emphasizes long run strategic modeling. In contrast, the authors introduce a tactical, short-term model, called SALIENCE, whose purpose is to allocate sales efforts in such a way as to increase the relative importance of attributes for which the sponsoring firm's current product has a (possibly temporary) differential advantage. In this case emphasis is on short-run, tactical decision making. We describe the SALIENCE model, both informally and mathematically. The model is applied, illustratively, to a real (disguised) study of overnight air shipment delivery.