Influence of AI on Marketing Strategy Formation

Influence of AI on Marketing Strategy Formation

AI capacities are altering the way organizations formulate and manage marketing strategies. Machine learning technologies help marketers provide personalized experiences to the constantly growing number of consumers. Rather than depending on intuitive heuristics, marketers use AI to identify consumer preferences, personalize value, and align messaging (Talbot, 2019). Likewise, marketers are increasingly using data and AI to inform and evaluate strategies. Algorithms ensure a marketing strategy is consumer-oriented rather than product-oriented. Instead of focusing on how the organization could reach its customers, AI learns how the customers reach the organization and then provides an enabling environment (Talbot, 2019). Eventually, this approach would provide clearer insight into consumers’ behaviors and preferences.

The optimization of marketing strategies relies on segmentation. AI can create distinct market segments to help marketers reach target consumers easily. Machine learning technologies are also resourceful in providing ideas for developing new products (Talbot, 2019). AI aids marketers in determining a significant role in product development. Deep listening allows AI to provide content that builds and sustains strong relationships. Through proper training, AI can accurately evaluate Customer Lifetime Value (CLV) and help marketers determine how to invest in each customer (Talbot, 2019). Lastly, AI enables marketers to test and certify assumptions about consumer behavior. This technology achieves this role by providing the possible causes of the current strategies’ success or failure. Besides formulating marketing strategies, AI influences market analysis and research processes in various ways.

Influence of AI on Market Research and Analysis

Market research and analysis involve obtaining information concerning consumers’ needs and preferences and evaluating it based on specific criteria. AI influences these marketing processes in various ways. Open-end coding is among the market research processes challenging to market researchers. This exercise encompasses reading numerous open-ended texts and allocating the most relevant code (Vlacic et al., 2021). However, data scientists have developed algorithms to facilitate text analysis. For instance, Google Cloud’s Natural Language API has attained the capacity to understand the syntactic structure, category of text, and text sentiment (Gell, 2019). Market researchers have incorporated automated sentiment analysis into online surveys to calculate the positivity and negativity of responses (Vlacic et al., 2021). As a result, data interpretation has become an easier and more time-efficient exercise for market research analysts.

AI also enables market researchers to extract new insights from random text data, facilitating complex decision-making processes. For instance, IBM’s Watson can assess social media posts from multiple users and identify complex characters or themes (Gell, 2019). Market researchers managing online panels also benefit from AI. Online panels comprise participants willing to engage in various market research studies suppose they qualify. However, most members are likely to disengage themselves if they do not qualify for a survey despite their active participation in pre-screening surveys. With the help of AI, panels can monitor the members’ behavior and predict when one is likely to lose interest in participation (Gell, 2019). Consequently, online market researchers can avoid member turnover and maximize the quality of research participants.

Conclusion

AI is a technological advancement that has revolutionized business and organizational processes worldwide. Marketing processes are not exceptional to this change. AI facilitates multiple marketing processes, including market segmentation, marketing strategy formation, and market research and analysis. As a result, this technology can maximize the organization’s competitive advantage and market share. However, marketers must acknowledge its potential and apply it appropriately. Misuse of AI could result in the violation of consumer protection laws. Therefore, business organizations and government institutes should embrace the potential of AI and use it to provide a better customer experience.

References

Anyoha, R. (2017).The History of Artificial Intelligence. Web.