Analytic Hierarchy Process as a Decision Tool for Operative Marketing

Analytic Hierarchy Process as a Decision Tool for Operative Marketing

Vicente González-Prida (University of Seville, Spain), Pablo Viveros (Universidad Técnica Federico Santa María, Chile), Anthony Raman (Canadian Institute of Marketing, Canada) and Adolfo Crespo (University of Seville, Spain)
Copyright: © 2015 |Pages: 13
DOI: 10.4018/978-1-4666-5888-2.ch529
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Background

On the AHP Methodology

The AHP is a methodology developed by Thomas Saaty in 1970, based on the understanding of a complex problem through a breakdown in parts hierarchically ranked and quantifying and comparing variables that facilitates the decision taking (Saaty, 1990). The process has been used to assist numerous decision problems (González-Prida et al., 2011), which decomposed into a hierarchy of criteria and alternatives, and resulting a decision matrix with elements compared in pairs.

As already mentioned, subjective values can be used. That makes necessary to measure the sensitivity in changes of parameters. To measure the reliability of the process, we use the ratio between consistency rate (CR) of a comparisons array into pairs, and the value of the same index of a comparison array into pairs randomly generated. Process reliability is sufficient if CR is less than or equal to 0.10, otherwise, it must be reviewed to improve its consistency. AHP is orientated in this research to a continuous improvement (Harker & Vargas, 1990), taking also into account features described in references like Moffett et al., 2005 Dyer 1990, Arrow and Raynaud 1986, or Donegan et al., 1992 and Zanakis et al., 1998.

Key Terms in this Chapter

Marketing: Activity of detecting users’ needs and desires that are not being properly met and devise a product or service to satisfy those needs, wants and desires with a profit.

Analytic Hierarchy Process: Structured technique developed by Thomas L. Saaty in the 1970s, for organizing and analysing complex decisions which is based on mathematics and psychology.

Complex Asset: Physical items, like equipment or devices with a high technical development, which can provide economic benefits to the entity.

Business: Organization involved in the trade of goods, services, or both to consumers.

Built-In Obsolescence: Planning or designing policy of a product with a limited useful life, in order to become obsolete, that is, no longer functional after a certain period of time.

Dynamic Analysis: Testing and evaluation process which is dependent on the runtime.

Decision Making: Selection process among several alternative scenarios, where results a final choice.

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