EXPERT SYSTEMS COMBINED WITH NEURAL NETWORKS: TOOLS TO BENEFIT THE MARKETING RESEARCHER Developments In Business Simulation & Experiential Learning, Volume 24, 1997 EXPERT SYSTEMS COMBINED WITH NEURAL NETWORKS: TOOLS TO BENEFIT THE MARKETING RESEARCHER George Aiken, D.B.A. Candidate, Nova Southeastern University Thomas J. Smith D.B.A. Candidate, Nova Southeastern University Sharon M. Hoffman, D.B.A. Candidate, Nova Southeastern University ABSTRACT For years, artificial intelligence applications, in the form of expert systems, have assisted academic and professional researchers in the creation and application of marketing system simulation. Today, due to advances in technology, neural network applications have resurfaced in the marketing literature as a useful tool for the marketing researcher. This paper describes a simulator, currently in the construction stage, which employs a combination of expert systems and neural network technologies. INTRODUCTION Marketing researchers have traditionally employed the notion of an open marketing system to explain the concept of marketing. In the accomplishment of the marketing concept, a marketing system is defined as a set of elements and relationships which (1) have an identifiable boundary; (2) provide a method to identify or chart the movement or flow of information, goods, and ownership; (3) include money and the risk incident to said flows (Reidenbach & Oliva, 1983). While controversial and ill-defined, most experts agree artificial intelligence is concerned with two basic ideas: (1) studying the human thought processes to understand what intelligence is; and (2) representing these thought processes for machine use (computers, robots, etc.) (Alter, 1992, Turban, 1993). Expert or “knowledge systems” are software systems designed to mimic the decision making of human experts (Chau, 199L Steinberg & Plank. 1990). Unlike other software systems which use strict mathematical reasoning to perform representation, computation, and other forms of data manipulation, expert systems represent knowledge through the heuristic manipulation of databases. Expert systems are generally dependent on “rules of thumb” developed to guide the program to a workable solution (Steinberg & Plank, 1990). Further, expert systems are based on inferential processes in contrast to the repetitive processing of standard systems. Another field of artificial intelligence becoming popular within the marketing community is neural computing or neural networks. Neural networks, so named because these systems attempt to simulate the human brain’s reasoning process, reason inductively. in contrast to the deductive reasoning processes of expert systems (Zahedi, 1991). EXPERT NEURAL NETWORKS A promising application mentioned in the literature is the combination of expert systems and neural networks. Labeled “expert neural networks” or “expert networks” (Caudill, 1991), these two areas of artificial intelligence complement each other while overcoming two problems: (1) the initial creation of the expert systems knowledge base, and (2) the neural network problem of “local minima” (Barker. 1990). This synergistic combination creates a potential modeling system capable of performing both inductive and deductive reasoning while disclosing intermediate steps to the user (Caudill, 1991). THE MODEL The model, which is currently under construction, consists of four distinct components: three expert systems components and one neural network. The expert systems components, which are labeled political/cultural, logistics, and financial, were developed utilizing Exsys, a popular expert systems shell. 142 Developments In Business Simulation & Experiential Learning, Volume 24, 1997 The Political/Cultural Component The political/cultural expert systems component, which is currently undergoing testing, incorporates Hofstede’s (1993) five cultural dimensions: (1) power distance, (2) individualism-collectivism, (3) masculinity-femininity, (4) uncertainty avoidance, and (5) long-term/short-term orientation. The Logistics Component The logistics component, still in the planning stage, will be based on Bass’ (1980) mathematical model of the Theory of the Timing of Adoption of Innovations, which includes learning rate and demand elasticities estimates, as well as demand and price functions. The elegance of this model is that with the employment of neural network technology, nonlinear functions can be incorporated. The Financial Component The financial component, also in the planning stage, will be based on the Exit Net Present Value Abandonment function developed by Aggarwal and Soenen (1989). This function incorporates discount cash flow analysis within the framework of the abandonment decision and the continuous analysis of the marketing investment. The Neural Network Component The neural network component consists of a maximum 8196 x 3 matrix backpropogation neural network developed in California Scientific Software B rainmaker Version 3. 1, and utilizing an ASCII bridge to each of the expert systems components. The neural network political/cultural expert systems bridge has been completed, taking 469 hours to train on an AM586x-133 MHZ processor PC. Similar training techniques are planned for the logistics and financial components. CONCLUSION In conclusion, it is estimated that the simulator will be operational by Spring, 1998. 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Interface, 21 (2). 25-3 8. 143 Table of Contents Volume 24, 1997 Incorporating Computer Telephony into the MIS Course A Learner Oriented Infrastructure for videoconferencing Based Distance Education Courses The Identification of Temporally Related Structural Elements of the Experiential Component of Electronic Spreadsheet Tasks Does Involvement Influence Learning from Simulation Participation? Some Relationships with Helpfulness and Performance Outcomes Musings on Business Garne Performance Evaluation Performance on a TE Simulation: What does it represent? The Business Policy Game: An International Simulation - An Assessment Tool Students in Free Enterprise as Experiential Learning The Role of Computer Models in Wargames: A Practitioner's view Using Focus Groups as a Tool to Research Learning: A Demonstration and a Discussion Using Medical Simulations to Teach Multi-Cultural Diversity Using the World Game to Internationalize International Exchange Game Community Services Needs Assessment: An Innovative Approach Introducing Students to Potential Total Quality Management Ethical Dilemmas Privacy in the Workplace: A Situational Analysis Antecedents of Learning in Simulations Demonstrating the Learning Effectiveness of Simulation: Where we are and Where we need to go The Use of Computer Simulations as a Pedagogical Aid in Teaching Management Information Systems Evaluating Simulation Learning in a Distant Learning Instructional Model Financial Engineering of Global Investments The Labor History Game: Playing with the Past Perks Participation Assessing Negotiator's Proficiency with a Negotiation role-play The Art of Negotiating Enhancing Learning and Employee Development through the Assessment of Learning Pedagogy Preferences across selected Dimensions of Culture: A Preliminary Investigation Cooperative Learning: What are we Learning? Effective Use of Mastery Based Experiential learning in a Project Course to improve skills in system analysis and Design Simulations and Learning: Can we prove a relationship? (Seminar) Predicting and Reviewing NYSE Stock Prices by use of Basic Statistical Analysis and Logic Toy Car Depreciation Exercise ABSEL as Home Community: An Interactive Exploration Service Learning: Linking Academic Study to Community Development and Business Enhancement Ability of Efficient Evaluation of Knowledge-Based Management Strategies Corporate Ethics Training Programs Modeling Attributes in Demand Functions of Computerized Business Simulations: An Extension of Teach's Gravity Flow Algorithm Expert Systems Combined with Neutral Networks: Tools to Benefit the Marketing Researcher Computer Game Design: New Directions for Intercultural Simulation Game Designers Consistency in Simulation Performance over Time and Across Simulation Games The Impact of an Artificial Market Leader on Simulation Competitor's Strategies Business Plans, Case Studies, and Total Enterprise Simulations: A Natural Co-existence An Exploration into the Non-Use of Business Simulations The Market Game: Interactive Learning Through Market Simulation Plotting Brand Trajectories with the COMPLETE PPM package: A Market Segmentation Analysis and Positioning Tool Me and Mine Inc: An Exercise in Management Theory Learning to Differentiate Leadership from Managerial Position Business Ethics Survey: A Perspective from the Retail Industry Experiential Learning in Demand Analysis for an Agricultural Commodity Marketing on the Internet: A Pedagogical Exercise College Students Need Simple Computer Simulations, Especially for International Business Courses An Analysis of Student Attitudes, Performance, and Strategies in a Simulation Competition Based on a Controlled Product-Market-Entry Game Structure The Crystal Enterprise: Application of a Non-Computerized Simulation Model in a Process of Organizational Change Threshold: A Windows-Based Behaviorally Oriented Total Enterprise Simulation Coaching Business Game Teams Using a Decision Variable Optimizer Rock and Roll is here to Stay: Enhancing Experiential Pedagogy with Musical Exercises An Example of Business Process Analysis Simulation for Customer Software Support The Use of Business Gaming in Hong Kong Academic Institutions Using the Integrative International Simulation INTOPIA Mark 2000 in a Concentrated MBA Curriculum A Group Experience as an Integrated Part of the Core Management Course Empowered Learning in the Classroom The Inter-Group Interaction: An Innovative Approach to Cooperative Learning Courses that Utilize Student Team: An Approach to enhancing their Effectiveness Thoughts about the Measurement of Learning: The Case for Guided Learning and Associated Measurement Issues Measuring Student Learning Using Business Simulations: A Theory Based Perspective On the Use of PC Fingame in an Undergraduate Finance Course How Managers get Things Done: A Virtual Soundbite Internet Experiential learning in the Principals of Marketing Classroom: A Pedagogical Approach Current Student Perceptions Relative to Business Simulations Beyond Capitalism: Designing Business Policy and Social Justice The Use of Boards of Directors to Evaluate Reports and Presentations in an Undergraduate Business Policy Course Beacon Lumber: An Experiential Introduction to Financial Accounting The Application of Organizational Motivation Principles: The Experiential Business Simulation Motus Manufacturing Avoiding a Bogey: Grading Case Discussions Scientifically Communicating Consumer Behavior II: A Modified Exercise Using Personal Consumption Journals in Condensed Courses Designing Instruments for Assessing the Effectiveness of Simulations, (Seminar) 360º Performance Feedback: Appraisal vs. Assessment The Cafeteria Approach to Managing an Academic Career: Remaining Non-Perishable while Doing Your Own Thing An Experiential Exercise Related to Person-Organization Fit and it's Consequences For Today's Dynamic and Changing World, Business Simulations need to be expanded to encompass Much Greater Complexity: A Demonstration The Incident Process: A Case in Reverse Contextually-Anchored Business Simulations The Energy Factor: Building Motivation in the Simulation Gaming Environment The Design of an Internet Game