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Well, to answer in short, simple way, we can start from defining Marketing Mix Model which is analytical approach that uses historical information to quantify sales impact of various marketing activities; it specifies effectiveness of marketing elements in terms of its contribution to sales - volume, volume/effort, sales/cost and ROI.
Knowing that I would say - it depends on industry and nature of products. E.g. for FMCG industry - I would go for stochastic, on the other hand for banking/insurance - deterministic.
Using deterministic model can be very hard at certain product stages or particular markets. But I believe we should endeavour to perfection at every aspect.
Full agree with MRS Katarzyna in her answer
Our world is full of models:
A deterministic model assumes certainty in all aspects. Examples of deterministic models are timetables, pricing structures, a linear programming model, the economic order quantity model, maps, accounting.
Probabilistic or stochastic modelsMost models really should be stochastic or probabilistic rather than deterministic, but this is often too complicated to implement. Representing uncertainty is fraught. Some more common stochastic models are queueing models, markov chains, and most simulations.
For example when planning a school formal, there are some elements of the model that are deterministic and some that are probabilistic. The cost to hire the venue is deterministic, but the number of students who will come is probabilistic. A GPS unit uses a deterministic model to decide on the most suitable route and gives a predicted arrival time. However we know that the actual arrival time is contingent upon all sorts of aspects including road, driver, traffic and weather conditions.
A lot of variables to consider here. Depends on the industry, the stage of the product life cycle, the market, the product/service etc. Using the BCG matrix, cash cows tend to be built on deterministic platforms where things have been tried and tested. Rising stars on the other hand have a lot more unknowns to deal with so the stochastic method may work better. We are currently going through a epoch defining change both in the business and marketing world. Where disrupters are to be found everywhere and experience can actually be a hindrance rather than a help. Most startups and new tech companies would therefore adopt the stochastic approach to their marketing especially with the advent of the LEAN system.
Some fields predominantly use stochastic models, others mainly use deterministic models. In between there are many modeling techniques that introduce some sort of uncertainty but do not amount to a full-fledged stochastic model.
Agree with all answers above .
