A strategic framework for artificial intelligence in marketing
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CONCEPTUAL/THEORETICAL PAPER
A strategic framework for artificial intelligence in marketing Ming-Hui Huang 1 & Roland T. Rust 2 Received: 3 March 2020 / Accepted: 29 September 2020 # The Author(s) 2020
Abstract The authors develop a three-stage framework for strategic marketing planning, incorporating multiple artificial intelligence (AI) benefits: mechanical AI for automating repetitive marketing functions and activities, thinking AI for processing data to arrive at decisions, and feeling AI for analyzing interactions and human emotions. This framework lays out the ways that AI can be used for marketing research, strategy (segmentation, targeting, and positioning, STP), and actions. At the marketing research stage, mechanical AI can be used for data collection, thinking AI for market analysis, and feeling AI for customer understanding. At the marketing strategy (STP) stage, mechanical AI can be used for segmentation (segment recognition), thinking AI for targeting (segment recommendation), and feeling AI for positioning (segment resonance). At the marketing action stage, mechanical AI can be used for standardization, thinking AI for personalization, and feeling AI for relationalization. We apply this framework to various areas of marketing, organized by marketing 4Ps/4Cs, to illustrate the strategic use of AI. Keywords Artificial intelligence . Machine learning Marketing strategy . Standardization . Personalization
. Mechanical AI . Thinking AI . Feeling AI . Relationalization . Segmentation . Targeting
Artificial intelligence (AI) in marketing is currently gaining importance, due to increasing computing power, lower computing costs, the availability of big data, and the advance of machine learning algorithms and models. We see wide applications of AI in various areas of marketing. For example, Amazon.com’s Prime Air uses drones to automate shipping and delivery. Domino’s pizza is experimenting with autonomous cars and delivery robots to deliver pizza to the customer’s door. RedBalloon uses Albert’s AI marketing platform to discover and reach new customers. Macy’s On Call uses natural language processing to provide an in-store John Hulland and Mark Houston served as Editors for this article. * Ming-Hui Huang [email protected] Roland T. Rust [email protected] 1
Department of Information Management, College of Management, National Taiwan University, 1, Sec. 4, Roosevelt Rd, Taipei 10617, Taiwan
2
Center for Excellence in Service at the Robert H. Smith School of Business, University of Maryland, 3451 Van Munching Hall, College Park, MD 20742, USA
. Strategic AI marketing . . Positioning . 4Ps . 4Cs
personal assistant to customers. Lexus uses IBM Watson to write its TV commercial scripts, “Driven by Intuition.” Affectiva, based on affective analytics, recognizes consumers’ emotions while they are watching commercials. Replika, a machine learning-based chatbot, provides emotional comfort to consumers by mimicking their styles of communication. It has even been asserted that AI will change the future of ma
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