Simulation technology is the process of using modern computer software and hardware to analyze the potential outcome of a given situation, based on known factors and the introduction of one or more variables that have the ability to influence the outcome of any given situation. This type of computer modeling is helpful in many different situations, ranging from the creation of marketing plans, the launch of public relations schemes, and even the placement of a new retail outlet. The idea behind the creation of the simulation is to minimize the possibility of an undesirable outcome from emerging, while also uncovering factors that are likely to enhance the chances for success.
When employing simulation technology to create a simulation model, the process is often divided into three distinct phases or steps. The first step in the process is usually refereed to as the design phase. Here, the basic situation is created, effectively providing a starting point for the evaluation. For example, if the idea is to determine what type of results are likely to occur with a marketing campaign, the design or model will be the actual marketing plan, complete with its provisions for the use of different media in advertising, the nature of the products to advertise, and even the packaging of the products that will be marketed.
The second phase of simulation technology is known as execution. During this phase, the model created during the design phase is put into action. Along the way, various types of incidental scenarios are integrated into the action, with an eye toward determining how well the design responds to those different factors, and what happens as a result. This phase can help identify what is likely to happen if the use of print media in the marketing campaign fails to reach the right consumer market, while television or radio ads not only reach the target market but also open up an unexpected niche market. At this point of the simulation technology process, the focus is on what could happen, and not necessarily why various factors impact the outcome.
A final phase to simulation technology focuses on analyzing the outcome of the execution phase. It is at this point that seeking answers as to why the print media portion of the campaign failed, and why the electronic media portion exceeded expectations. Once the answers are identified, it is possible to return to the first step, adjust the structure of the model in the design phase, and run a second simulation. It is not unusual for a business to run these computer simulations repeatedly as part of the process of refining a campaign or other major action before actually choosing the final course of action. While simulations can be costly, both in terms of time and money, they often pay for themselves by helping businesses to avoid what could be costly mistakes.