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Optimization means "the action of finding the best solution." Mathematical programming, or optimization modeling, is a branch of mathematical modeling that is concerned with finding the optimal solution to a problem.
Initially, optimization was used as a way to mathematically determine the optimal allocation of scarce resources. The concept has been borrowed by businesspeople to aid decision-making.
Optimization has been used in the areas of the manufacturing supply chain, airline revenue yields, and financial investment risk assessment. More recently, the concept is being adopted by marketing.
You've probably heard phrases such as site optimization, search engine optimization, event optimization, and campaign optimization. A more recent concept with broader application to marketing is the idea of marketing optimization.
Marketing optimization addresses determining the optimal subset of combinations that will maximize profit.
Marketing's primary responsibility to the organization is to generate profitable revenue growth. It would seem that maximizing profit is a relatively easy thing to do: just achieve the full profit potential for each and every customer. Easier said then done.
The sheer number of customers, products, and communication channels creates complexity, often making it difficult to find the right set of customer-product-channel combinations that will maximize profit while ensuring customer satisfaction.
Take the first step (it's free).
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