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Artifcial Intelligence for
Marketing Management
Artifcial intelligence (AI) has driven businesses to adopt new business practices
rapidly, enhance product development and services, has helped to power AI-based
market intelligence and customer insights, and improve customer relationship
management. This timely book addresses the use of AI in marketing.
This book also explores the dark side of AI in marketing management
and discusses ethics and transparency of automated decision-making in AI
applications, data privacy, cyber security issues, and biases in various facets of
marketing. Emerging applications of AI such as DeepFakes which use deep
learning technology could increase risks of manipulation and deception. Hence,
apart from leveraging AI capabilities and advantages, the book cautions the need
for prevention strategies to deal with potential issues that could arise from the
adoption of AI in marketing management.
This book will provide practical insights into the role of AI in marketing
management. It will be a useful reference for those researching marketing and
marketing professionals.
Park Thaichon is Cluster Leader of the Relationship Marketing for Impact

research cluster, Griffth Business School. His research articles can be viewed
in the leading outlets such as the Journal of the Academy of Marketing Science,
California Management Review, Industrial Marketing Management, European
Journal of Marketing, and Journal of Business Research. Park is an Associate Editor
of the Australasian Marketing Journal and Journal of Strategic Marketing. He
is a member of the Griffth Institute for Tourism, Sales and Marketing Strategy
Institute, and Griffth Asia Institute. Park has published over 70 A-ranked journal
articles since 2015 (ABDC).
Sara Quach has been recognized as the Rising Star in the Marketing Discipline
2020 by The Australian. Sara has published over 40 A-ranked journal articles since
2015 (ABDC). Her research has been published in leading marketing journals
including but not limited to the Journal of the Academy of Marketing Science,
Industrial Marketing Management, European Journal of Marketing, Journal
of Business Research, Journal of Retailing and Consumer Services, Journal of
Business and Industrial Marketing, Journal of Strategic Marketing, and Marketing
Intelligence and Planning.
Routledge Studies in Marketing
This series welcomes proposals for original research projects that are either single
or multi-authored or an edited collection from both established and emerging
scholars working on any aspect of marketing theory and practice and provides an
outlet for studies dealing with elements of marketing theory, thought, pedagogy
and practice.
It aims to refect the evolving role of marketing and bring together the
most innovative work across all aspects of the marketing ‘mix’ – from product
development, consumer behaviour, marketing analysis, branding, and customer
relationships, to sustainability, ethics and the new opportunities and challenges
presented by digital and online marketing.
Charity Marketing
Contemporary Issues, Research and Practice
Edited by Fran Hyde and Sarah-Louise Mitchell
The Dynamics of Infuencer Marketing

A Multidisciplinary Approach
Edited by José M. Álvarez-Monzoncillo
Consumer Ethnocentrism, Country of Origin and Marketing

Food Market in Poland
Paweł Bryła and Tomasz Domański
European Consumers in the Digital Era

Implications of Technology, Media and Culture on Consumer Behavior
Edited by Małgorzata Bartosik-Purgat and Nela Filimon
Artifcial Intelligence for Marketing Management

Edited by Park Thaichon and Sara Quach
Sustainable Marketing and Customer Value

Edited by Subrata Chattopadhyay, Sundeep Singh Sondhi and Arunava Dalal
For more information about this series, please visit: www.routledge.com/

Routledge-Studies-in-Marketing/book-series/RMKT
Artifcial Intelligence for
Marketing Management
Edited by
Park Thaichon and Sara Quach
First published 2023
by Routledge
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and by Routledge
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business
© 2023 selection and editorial matter, Park Thaichon and Sara
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
ISBN: 978-1-032-24848-6 (hbk)
ISBN: 978-1-032-24849-3 (pbk)
ISBN: 978-1-003-28039-2 (ebk)
DOI: 10.4324/9781003280392
Typeset in Galliard
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Contents
List of Figures vii

List of Tables viii
Contributors’ bios ix
PART I
Overview of AI 1
1 Introduction to artifcial intelligence (AI): Defnition and

scope of AI 3
D U N G LE ( J E NNY ) , KY U NGHWA CHU NG, S A R A QUACH, AND
PARK TH AI C HO N
2 The growth of marketing research in artifcial

intelligence (AI): Topic popularity 18
PARK TH AI C HO N A ND S A RA Q U A CH
3 Types of artifcial intelligence (AI) in marketing management 29

KY U N G H WA CHU NG, DU NG L E ( JENNY ) , PA R K THAICHON,
AN D S ARA Q U A CH
4 A framework of artifcial intelligence (AI) applications

in marketing 41
D U N G LE ( J E NNY ) , KY U NGHWA CHU NG, S A R A QUACH,
AN D PARK THA ICHO N
vi Contents
PART II
AI and its implications in the new age of
marketing management 53
5 New developments in artifcial intelligence

(AI)-powered products in marketing 55
M O J TAB A B A RA RI, S A RA Q U A CH , A ND PA RK THAICHON
6 Artifcial intelligence (AI)-driven services:

Communication support, assistance for decision-making,
and enhanced customer experience service 76
M AI N G U Y E N, Y ING CH EN, T HA NH HU O NG NG UYEN,
S ARA S H AWKY HA BA S HI, S A RA Q U A CH , A N D PAR K THAICHON
7 Artifcial intelligence (AI)-integrated operation;

insights into supply chain management 96
ALI RAZZAQ , S A RA Q U A CH, A ND PA RK T HAICHON
8 Artifcial intelligence (AI)-based market intelligence

and customer insights 120
N I RM A S AD A MA L I JAYAWA RDENA , A BHIS HEK BEHL,
PARK TH AI C H O N, A ND S A RA Q U A CH
9 Artifcial intelligence (AI)-empowered customer

relationship management 142
Y I BU , S ARA Q U A CH, A ND PA RK T HA ICHON
PART III
Challenges and opportunities of AI 161
10 Data privacy and artifcial intelligence (AI): How AI

collects data and its impact on data privacy 163
L ARS - E RI K CA S P ER FERM, S A RA Q U A CH, AND PAR K THAICHON
11 Solutions to artifcial intelligence (AI) and privacy:

How AI uses data and its accompanying privacy issues 175
L ARS - E RI K CA S P ER FERM, PA RK T H A ICHO N , AND SAR A QUACH
Index 197
Figures
1.1 The evolution of AI over time 5

1.2 Machine learning tasks 9
2.1 The historical overview of trends changed in marketing
research in AI from 1987 to 2022 20
2.2 The historical overview of major topics changed in marketing
research in AI from 1991 to 2022 21
2.3 Topic popularity in marketing research in AI 23
4.1 A framework of AI applications in marketing 42
5.1 Artifcial intelligence-powered product (AIPP) layers 57
5.2 Main industries armed with AIPP 58
6.1 Examples of AI-driven service 79
6.2 How chatbots work 83
7.1 AI-integrated supply chain framework 101
8.1 Data collection: step by step 123
8.2 Metadata that is frequently scraped for marketing research 124
8.3 Word cloud of the 10 most frequent words 126
8.4 Lead scoring funnel 128
9.1 AI-empowered CRM in the customer journey 143
11.1 Degree of personalization exemplar 189
Tables
1.1 Advantages and dangers of AI 12

5.1 Exemplars of the AIPP in diferent industries 67
6.1 Advantages of AI assisting decision-making 81
6.2 Advantages of chatbots 84
6.3 Drawbacks of chatbots 85
6.4 Advantages of Duolingo 86
6.5 Drawbacks of Duolingo 86
6.6 Advantages of Google Cloud Speech-to-Text 88
7.1 A brief overview of AI techniques 99
7.2 Summary of objectives and outcomes of AI-integrated supply chain
operations as per the cases discussed 111
7.3 A roadmap to AI-integrated operations 112
8.1 Some of the marketing research applications suitable for ACM 133
9.1 Insights for AI-empowered CRM in the customer journey 153
11.1 Albert AI privacy challenges 178
11.2 RefaceAI privacy challenges 182
11.3 McDonald’s AI privacy challenges 186
Contributors’ bios
Mojtaba Barari is a Ph.D. candidate in the Department of Marketing, Griffth

University. He has published research articles in such journals as the Journal of
Retailing and Consumer Services, International Journal of Consumer Studies,
Psychology & Marketing, and Asia Pacifc Journal of Marketing and Logistics.
Also, he is a data analyst in Navitas, a leading global education provider deliv-
ering an extensive range of educational services to over 70,000 students across
the world each year.
Abhishek Behl is Assistant Professor at Management Development Institute,
India, in Information Management Department. He is a dual doctorate holder
in Information Technology and Information Management. His research has
been published in leading journals such as the International Journal of Infor-
mation Management, Technological Forecasting and Social Change, Journal of
Business Research, IEEE Transactions in Engineering Management, Annals of
Operations Research, Australasian Journal of Information Systems, and Journal
of Strategic Marketing.
Yi Bu is a current Ph.D. candidate in the Department of Marketing at Griffth
University. He has published his research in some academic journals includ-
ing the Journal of Retailing and Consumer Services, Australasian Marketing
Journal, and Marketing Intelligence and Planning.
Lars-Erik Casper Ferm is a current Ph.D. student at the University of Queensland
Business School. His research focuses on value co-creation, digital marketing,
privacy, and AI. He has had his research published in leading marketing jour-
nals such as the Journal of Retailing and Consumer Services and Journal of
Global Scholars of Marketing Science.
Ying Chen is a Ph.D. candidate in the Business School at the Griffth University.
Her research interests include sharing economy, customer experience, and
artifcial intelligence. She has published two papers including the Journal of
Retailing and Consumer Service (A-ranked) since she commenced her Ph.D.
Kyunghwa Chung is a marketing researcher who published academic papers
in diverse top-tiered journals including Service Science, Clothing and Textiles
x Contributors’ bios
Research Journal, Cornell Hospitality Quarterly, etc. Her research areas are
marketing and retailing. Her research interests include human–computer
interaction, technology, omnichannel retailing, customer experience, etc. She
taught at diverse universities in South Korea and Vietnam.
Thanh Huong Nguyen is a Ph.D. candidate at the Faculty of Business, Law and
Government of University Canberra. Her research interests include interna-
tional law, and she is particularly interested in intellectual property law.
(Jenny) Dung Le has more 10 years of teaching experience at various universities
in Vietnam and Australia. She has published her research outcomes in the top-
ranking tourism and hospitality journals, including the International Journal
of Hospitality Management, Journal of Sustainable Tourism, Current Issues in
Tourism, and Tourism Review. Her teaching and research interests include
eye-tracking technology, digital marketing, emotions, experience design, crisis
management, and sustainability.
Mai Nguyen is a lecturer in Marketing at the UQ Business School at the Uni-
versity of Queensland, Australia. Her research interests include sustainable
behavior change, knowledge sharing, and artifcial intelligence. She has pub-
lished over 20 A-ranked journal articles since 2015 (ABDC) in the several
high-ranking journals, including the Journal of Business Research, British
Journal of Management, Journal of Knowledge Management, Journal of Retail-
ing and Consumer Services, International Marketing Review, Journal of Con-
sumer Behavior, Journal of Consumer Marketing, Knowledge Management and
Practice, Transactions on Engineering Management, and Tourism Geographies,
among others.
Sara Quach has been recognized as the Rising Star in the Marketing Discipline
2020 by The Australian. Sara has published over 40 A-ranked journal articles
since 2015 (ABDC). Her research has been published in leading marketing
journals including but not limited to the Journal of the Academy of Marketing
Science, Industrial Marketing Management, European Journal of Marketing,
Journal of Business Research, Journal of Retailing and Consumer Services, Jour-
nal of Business and Industrial Marketing, Journal of Strategic Marketing, and
Marketing Intelligence and Planning.
Ali Razzaq is currently enrolled as a Ph.D. student in the Department of Market-
ing at Griffth University, Gold Coast campus. His thesis investigates “Meme
marketing,” which focuses on how brands can engage customers with the help
of internet memes on social media platforms. His research interests mainly
revolve around broader felds of consumer behavior, marketing communica-
tions, sustainable marketing, consumer boycott, and tourism marketing. As
an aspiring young scholar, his research work has appeared in peer-reviewed
journals such as the Asia Pacifc Journal of Marketing and Logistics, Journal of
Vacation Marketing, and Journal of Global Marketing.
Contributors’ bios xi
Nirma Sadamali Jayawardena is a Ph.D. student at Griffth Business School
in Marketing Department. Her research interests include social cognition,
consumer visual memory, and advertising. Her research has been published in
several journals including Technological Forecasting and Social Change, Journal
of Business Research, and Journal of Global Information Management.
Sara Shawky Habashi is Lecturer and Research Fellow at Griffth University.
Her research interests focus on digital media, behavior change, and relation-
ship marketing. Her work is published in leading peer-reviewed journals,
including the Journal of Business Research, International Journal of Market
Research, Australasian Journal of Environmental Management, Journal of
Social Marketing, and Health Marketing Quarterly. She endeavors to lever-
age her industry experience in leading the development of communication
campaigns for FMCGs (e.g., Nestle and Kraft foods), investment banking, and
real estate, and working for companies including Ogilvy and Mather company,
EFG Hermes, LJ Hooker, and Harcourts to offer theoretical knowledge that
would serve practical application.
Park Thaichon is Cluster Leader of the Relationship Marketing for Impact
research cluster, Griffth Business School. His research articles can be viewed
in the leading outlets such as the Journal of the Academy of Marketing Science,
California Management Review, Industrial Marketing Management, Euro-
pean Journal of Marketing, and Journal of Business Research. He is Associate
Editor of the Australasian Marketing Journal and Journal of Strategic Market-
ing. He is a member of the Griffth Institute for Tourism, Sales and Market-
ing Strategy Institute, and Griffth Asia Institute. He has published over 70
A-ranked journal articles since 2015 (ABDC).
Part I
Overview of AI
1 Introduction to artifcial
intelligence (AI)
Defnition and scope of AI
Dung Le (Jenny), Kyunghwa Chung,
Sara Quach, and Park Thaichon
Introduction
The 21st century is labeled the age of digital technologies (Ferm & Thaichon,
2021; Nguyen et al., 2021) and artifcial intelligence (AI) (Hasan et al., 2021a;
McCorduck & Cfe, 2004). Managing AI is unlike information technology (IT)
management in the past because it involves frontiers of emerging computing
capacities (Berente et al., 2021). Many businesses have been implementing
some form of AI technologies such as robots and autonomous vehicles, facial
recognition, natural language processing, and virtual agents of all sorts as part of
their business transformation strategy (Balakrishnan & Das, 2020; Hasan et al.,
2021b). The applications of AI are forecasted to increase continuously at an
astounding clip in the near future when AI enables businesses with possibilities
of designing intelligent products, devising novel service offerings, and inventing
new business models (Davenport et al., 2020; Nguyen et al., 2022). Emerging
challenges in adopting AI also exist, from managing human–AI interfaces, data,
privacy, security, ethics, and privacy (Kellogg et al., 2020; Quach et al., 2022;
Russell, 2019).
To deal with both possibilities and challenges of AI-based systems in business,
managers need to have a comprehensive understanding of AI, its basics, evolu-
tion, possible solutions, and potential. It falls on the shoulders of managers to
be responsible for the development and implementation of AI-based systems and
also consequences of AI in many circumstances (Martin, 2019). Therefore, this
chapter consists of an essential introduction to AI for managers to be refective
and strategically plan for their organization’s AI initiatives. This chapter pro-
vides an overview of the AI evolution, what is AI and what is not, and different
approaches to understanding the boundaries of the AI world.
Three key milestones of AI

“Can machines think?”
(Turing, 1950)
DOI: 10.4324/9781003280392-2
4 Dung Le (Jenny) et al.
A growing volume of research has been conducted over the last seven decades to
answer Turing’s question on the affordance of human intelligence to machines.
In the well-known “Turing test” procedure, Alan Turing demonstrated that a
computer could imitate human conversation, which later became the foundation
of machine learning and artifcial intelligence (AI). The term AI was offcially
1955 introduced at the Dartmouth Summer Research workshop. An AI prob-
lem is, thus, defned as “that of making a machine behave in ways that would
be called intelligent if a human were so behaving” (McCarthy et al., 1955).
By the late 1950s, AI research mostly focused on programming computers to
solve math and logical reasoning problems such as the logic theorist or the logic
theory machine (Newell & Simon, 1956), the Perceptron (Rosenblatt, 1958),
Geometry-Theorem Proving Machine (Gelernter, 1959), Object recognition
system (Roberts, 1965), and so on.
Since the 1980s, AI research reached the stage of widespread commercializa-
tion and has become a fast-growing industry when the focus shifted to machine
learning methods. Machine learning is defned as “a computer program said to
learn from experience E with respect to some class of tasks T and performance
measure P, if its performance at tasks in T, as measured by P, improves with
experience E” (Mitchell, 1997). Considered a subfeld of AI (Michalski et al.,
2013), machine learning has transformed felds such as biology, education,
engineering, fnance, healthcare, and marketing (Rust, 2020). Machine learn-
ing exhibits the ability of experiential learning associated with human intel-
ligence, while also having the capacity to learn and improve its analyses using
computational algorithms. The algorithms exploit a huge amount of data inputs
and outputs to recognize patterns and “learn” to make autonomous predic-
tions, recommendations, and decisions (Helm et al., 2020). AI agents powered
by machine learning algorithms are effective and effcient in processing large-
scale and unstructured data in real-time and could generate accurate predictions
to assist marketing decisions (Ma & Sun, 2020). Sophisticated machine learn-
ing algorithms power the recommender systems for leading companies such as
Amazon or Netfix.
The latest breakthroughs in AI performance are enabled by deep learning
which could be defned as “representation-learning methods with multiple levels
of representation, obtained by composing simple but non-linear modules that
each transform the representation at one level into a representation at a higher,
slightly more abstract level” (LeCun et al., 2015). Deep learning uses neural
networks with multiple hidden layers, combined with the advent of big data and
the exponential growth in computer hardware. The network begins with an input
tier that then progresses to several “hidden tiers” that each responds to different
features of the input (Ramkumar et al., 2019). Due to multiple tiers, the algo-
rithm would be capable of refning itself when new data are available and making
“neuronal” connections on multiple hierarchical data levels in a similar way as the
human brain functions (Helm et al., 2020). Therefore, deep learning engines are
effective in processing large-scale and unstructured data in real-time, generating
Introduction to artifcial intelligence 5
Early Artificial Intelligence stirs excitement
Machine Learning begins to flourish

Artificial Deep learning breakthroughs
Intelligence Machine
Learning Deep Learning
1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s
Figure 1.1 The evolution of AI over time
accurate predictions in various areas, from image recognition, and social media
mining, to autonomous driving, etc. Deep learning has greatly improved AI per-
formance to assist business and marketing decisions.
The three key milestones in AI evolution (Oppermann, 2019) are visualized in
Figure 1.1, showing the shifted focus of AI research over time. The explosion of
AI-based systems and applications in almost aspects of business and life makes the
boundaries of the AI world blur. It becomes unclear what one refers to as AI and
some people think that AI could be nearly anything involving computer programs
or machines. The lack of a clear defnition of AI’s scope is often caused by dif-
ferences in the intentions, the goals of the researchers, and the methods adopted
in building AI models. Therefore, the next section provides a further discussion
on AI defnition and some guidance on what is AI and what is not. It builds the
theoretical foundation for all following chapters in the book.
Defning AI
Given that the AI concept has been understood in so many ways both within
and outside the feld and caused a lot of confusion that made cooperation
challenging among different groups of researchers (Lewis & Monett, 2018), a
review of different defnitions is needed to have a comprehensive understanding
of what is AI and what is not. Therefore, main approaches from (1) techno-
logical perspective, (2) psychological perspective, and (3) cognition (thinking)
version behavior (acting) perspective are thus discussed here before the scope
of AI is elaborated.
AI defned from a technological perspective
The early AI researchers tend to defne AI as a technological advancement to solve
math and logical reasoning problem. As the introducer of the term AI, McCar-
thy defned it as “the science and engineering of making intelligent machines,
especially intelligent computer programs. It is related to the similar task of using
computers to understand human intelligence, but AI does not have to confne
itself to methods that are biologically observable” (McCarthy, 2004). From
this perspective, intelligence relates to the human ability to effectively perceive
and process data, as well as transform it into knowledge, which is later used for
goal-driven behavior. Following McCarthy (2004)’s approach, Sutton (2020)
proposed a more complex defnition: “Intelligence is the computational part of
the ability to achieve goals. A goal achieving system is one that is more usefully
understood in terms of outcomes than in terms of mechanisms.” In this case,
intelligence means the ability to solve hard problems, and AI would be considered
as the feld of research concerned with marking machines do things that people
consider to require intelligence (Minsky, 1985).
Researchers believe that AI systems should be fexible enough when process-
ing a task and cannot depend only on predetermined algorithms and structures
because there is always missing or uncertain knowledge that the system does not
have the time to examine every possibility coming its way (Wang, 2019). The
knowledge and resources of an information-processing system are relatively suf-
fcient for simple tasks for which intelligence is not needed. Therefore, operating
with insuffcient knowledge and resources refers to the normal working condition
of an AI system where the actual concrete problems lie. Therefore, an intelligent
system needs to have the capability to adapt to environments and handle insuf-
fcient knowledge and resources (Thórisson, 2020).
AI defned from a psychological perspective

Other researchers tried to defne AI based on the defnition of human intelligence in
the feld of psychology. According to psychologists, intelligence refers to a property
of an individual agent in interacting with the surrounding environment, combined
with the agent’s ability to achieve a given goal, and depends on the agent’s ability to
adapt to different environments and goals (Kaplan & Haenlein, 2019). Grounded
on the defnition of human intelligence from the feld of psychology, AI is concep-
tualized as the ability of an artifact acting as an intelligent agent to emulate human
cognitive tasks (Eriksson et al., 2020; Jarrahi, 2018). Human intelligence involves
a combined set of psychological processes such as perception, memory, reasoning,
problem-solving, learning, and goal-oriented action (Paschen et al., 2019). AI,
hence, refers to computational algorithms that can execute one or many functions
similar to human intelligence from object recognition, image recognition, and text
analysis to acting as decision-making systems which generate individual recom-
mendations, handle complex communications (e.g., chatbots), etc. (Becken et al.,
2018; Ku et al., 2019; Prentice et al., 2020; Wirth, 2018).
AI defned from a cognition (thinking) versus behavior (acting)
perspective
From a cognition (thinking) versus behavior (acting) perspective, AI can be
defned on the basis of two distinct defnitions: rationally versus humanly. AI
systems should be developed and utilized depending on whether the outcome is
expected to emulate human performance or execute “ideal” (i.e., rational per-
formance) (Eriksson et al., 2020). Therefore, AI systems can be categorized into
four groups: acting humanly, thinking humanly, and acting rationally, thinking
rationally.
As a product of the feld of logic, rationality is contingent on knowledge and
refected by doing what is right given what is known (Russell & Norvig, 2016).
Rationality implies solid reasoning processes. Rational decision-making is, in
essence, objective and impersonal. Thus, rational thinking is expected to yield
correct conclusions if based on the correct premises. Also, a rational agent is
expected to act with the purpose of achieving the best-expected outcomes based
on correct inferences. Intelligent agents rely on knowledge to optimize decisions
and could act rationally to adjust autonomously prior knowledge with new learn-
ing (Russell & Norvig, 2016).
Even though humans are expected to act intelligently, human cognition is
bounded (Simon, 1997). Hence, humans tend to satisfy when making decisions
that are suffciently good but not optimal. AI executing like humans has two
dimensions: acting humanly and thinking humanly. “Turing test” can be used to
assess AI acting humanly (Turing, 1950). If a human is unable to ascertain the
written answers to written questions provided by another person or a computer,
the computer is deemed to pass the test and act in adherence to human perfor-
mance (Eriksson et al., 2020). Passing the rest requires a range of AI capabili-
ties, such as natural language processing (i.e., the ability to store what it knows,
automated reasoning to use the stored information to reach new conclusions) or
machine learning (i.e., the ability to detect patterns and adapt to new circum-
stances) (Russell & Norvig, 2016).
In contrast, thinking humanly is evaluated using a cognitive modeling approach,
founded on the premise that it is possible to understand how humans think using
various methods (e.g., observing human thoughts – introspection or brain imag-
ing) (Eriksson et al., 2020). The reasoning of an AI program should be compared
with that of human addressing the same problem or in other words be intelligent.
Toward a well-accepted AI defnition

Despite different approaches, researchers seem to agree that AI could be under-
stood as “computational agents that act intelligently” (Poole & Mackworth,
2010). AI aims to reach human-level intelligence or ideal intelligence through
computer programs (i.e., algorithms) that we’re able to solve problems and
learn on their own to turn the data into meaningful and actionable information.
Therefore, we adopted the defnition of AI proposed by Berente et al. (2021) as
the defnitional foundation for further AI discussion in this book: “the frontier
of computational advancements that references human intelligence in addressing
ever more complex decision-making problems.”
There are three reasons for adopting this defnition. First, this defnition
emphasizes the fact that AI is not a set of stable technologies, but an evolving
phenomenon – a moving frontier of next-generation advancements in comput-
ing. In fact, most early computer programs are no longer considered AI, although
they were at that time. Second, this defnition highlights decision-making as a
core aspect of AI. Through intelligent computer programs, AI involves informing
or automating the human decision-making process (Russell, 2019). Third, this
defnition explicitly invokes a relationship between AI and human behavior. The
notions of emulating human intelligence (think and act humanly) or outperform-
ing humans (think and act rationally) should remain at the center of AI research
(Berente et al., 2021).
Basic concepts of AI
Algorithms
In the computer science context, algorithms are a series of instructions or steps
for computer programs to complete a specifc task (i.e., transform a set of data
into useful information). The offcial defnition of an algorithm is provided in
the book “Introduction to Algorithms” (Cormen et al., 2022): “Informally, an
algorithm is any well-defned computational procedure that takes some value, or
set of values, as input and produces some value, or set of values, as output.”
Machine learning (ML)

Machine learning is a vast and rapidly evolving feld, encompassing a wide range
of methods for addressing diverse tasks (Ma & Sun, 2020). ML is based on the
notion that a computer system can learn on its own from a set of data, fnd out
the data’s patterns, and then make decisions with very little human intervention.
ML-based systems are capable of carrying out a vast range of complex tasks such
as building search engines, fltering content on social media or in emails, making
recommendations on websites, traffc prediction, stock market trading, medical
diagnosis, and so on. There are fve main tasks of ML (see Figure 1.2): Supervised
learning, unsupervised learning, semi-supervised learning, reinforcement learn-
ing, and active learning.
Supervised learning: Supervised learning task involves a training dataset
(including both the input – a collection of variables commonly denoted as X; and
the output – a target variable commonly denoted as Y) and learning from this
training dataset to predict the output based on a given input. The predictive accu-
racy of the supervised ML is assessed using a different testing dataset. Typically,
researchers using supervised ML are less interested in uncovering the linkage
Supervised
Learning
Active Unsupervised
Learning Learning
Semi--
Reinforcement
Supervised
Learning
Learning
Figure 1.2 Machine learning tasks
between the variables but focus more on learning a function that maximizes the
predictive accuracy of the ML.
Unsupervised learning: In unsupervised learning tasks, the training dataset
contains only the input variables, while the output variables are either undefned
or unknown. The typical goal of researchers is to fnd hidden patterns in or
extract information from the data, for example, clustering analysis (i.e., the input
instances are put into multiple groups to maximize within-group similarity and
cross-group difference), dimensionality reduction (i.e., high-dimensional data are
transformed into lower dimensional variables while retaining the information in
the original data), or unsupervised feature learning or representation learning task
(i.e., features are extracted from the input data to represent them).
Semi-supervised learning and transfer learning: In a semi-supervised learn-
ing task, the output is known for only a subset of the data, while the rest in the
training dataset (for which the output is not observed) can be utilized to improve
learning later. In a transfer learning task, researchers leverage an existing model,
trained using a different dataset for performing a task or achieving a purpose. The
existing model can serve as a starting point, which is then adjusted on the basis of
the current training dataset (Pan & Yang, 2009). Transfer learning can be effec-
tive in leveraging existing knowledge for models that require a large amount of
training data and computation time (e.g., image analysis).
Active learning: In an active learning task, only limited training instances are
available at frst, and acquiring additional training instances to improve predic-
tive accuracy is possible later, but often costly. A key focus of active learning is to
determine the most important training instances while maximizing the predictive
accuracy at the minimum data requirement.
Reinforcement learning: In a reinforcement learning task, the learning agent
continuously interacts with the surrounding environment by taking actions and
observing feedback, to optimize a certain objective function (Sutton & Barto,
2018). The learning algorithm needs to determine the actions to take to both
learn the environment’s characteristics and craft optimal policy of actions given
the states. Reinforcement learning has a wide range of applications from autono-
mous vehicles to morphing websites.
Deep learning
Deep learning is a subset of machine learning, involving algorithms that can “learn
deep, direct belief networks one layer at a time, provided the top two layers form
an indirect associative memory” (Hinton et al., 2006). Those belief networks are
called “artifcial neural networks” (ANNs) or “deep neural networks.” The term
“deep” specifcally refers to the number of hidden layers in neural networks. Deep
learning uses multiple neural networks to process large amounts of data to learn
their complex patterns and imitate human minds. Neural networks contain three
layers: an input layer, a hidden layer, and an output layer. Altogether, these layers
contain thousands, sometimes millions of nodes. Deep learning systems can think
the way a human thinks to interpret the environment and act accordingly to solve
the problems (Verma et al., 2021).
Today, artifcial neural networks and deep learning form the basis of most
applications we know under the label of AI. The common applications of deep
learning are image recognition and speech recognition.
• Image recognition: The system can identify objects, persons, places, digital
images, etc. One common application is Facebook’s automatic friend tagging
suggestion using face detection and recognition algorithms from deep learn-
ing technology.
• Speech recognition: Google function “search by voice,” Siri, Alexa, etc., are
the popular applications of this technology.
Natural language processing (NLP)

NLP is a combination between the feld of AI and linguistics. It is the subject
of computational linguistics research that learns about computer systems for
understanding and generating natural language (Chowdhary, 2020). NLP refers
to automatic methods that take natural (human) language as input and produce
natural language as output. NLP is built to carry out the following tasks: auto-
matic language translation, information retrieval, information extraction, text
summarization, question–answering, and so on. Speech recognition is a sub-
committee of this technology. One very popular application of NLP is websites’
chatbots, a computer program that interacts with internet users in a text format
to solve website problems. A major drawback of NLP, however, is the lack of
resources and tools for low-resource languages (LRLs) yet being used by millions
of people such as Bahasa, Punjabi, Bengali, and Swahili. Most NLP resources
today are mainly for high-resource languages (HRLs), for example, English,
Spanish, Mandarin, French, and German (Hirschberg & Manning, 2015).
Robotics
AI has been strongly connected with the feld of robotics since its early days. The
purpose is not only to build robots that act like humans but also to think like
one. Robotics is defned as “the intelligent connection of perception to action”
(Brady, 1984). With the integration of AI, robots are no longer only the con-
nection of sensing to action using software, but they are now a combination of
recognition, reasoning, and action using intelligent software. Today, there are
intelligent robots (AI-integrated robots) that function like intelligent machines
and can take actions or make choices based on input from sensors. Compared
to simple robots that can simply assist in manual work, intelligent robots know
how to utilize time and space, avoid obstacles, measure weight or size, etc. The
AI embedded in proposed multifunctional, companion robots (even though they
remain under development) would entail substantially more reality in near future,
featuring both physical embodiment and the ability to operate in a wide range of
challenging contexts (Davenport et al., 2020).
Summary and key takeaway

The overview of AI evolutions, AI scope, and basic concepts related to AI makes
it clear that AI has integrated and transformed our ways of living, doing busi-
ness, and so on. AI consists of the opportunity to transfer human intelligence to
machines for completing various tasks from the simplest to the most complex. The
ability of learning and knowledge transfer has been autonomously generated by
AI algorithms and would remain the most important advantage of AI compared
to other technological advancements in the future (De Bruyn et al., 2020). The
latest breakthrough in AI research (i.e., deep learning) would enable machines
to achieve human-level intelligence or even outperform human intelligence in
some cases for most optimal decisions (LeCun et al., 2015). More impressively,
AI-based systems can be purely software-based, acting in the virtual world (e.g.,
voice assistants, image analysis software, search engines, speech and face recogni-
tion systems) or AI can be embedded in hardware devices (e.g., advanced robots,
autonomous cars, drones, or Internet-of-things (IoT) applications).
The question is less how important the role AI will play in modern society but
how AI systems and humans can (peacefully) coexist next to each other. Which
decisions should be taken by AI, which ones by humans, and which ones should
Table 1.1 Advantages and dangers of AI
Advantages of AI Danger of AI
Autonomy Lack of common sense

Learning Biased AI
Inscrutability Explainable AI
Controllable AI
Paradox of automation
be done in mutual collaboration (Haenlein & Kaplan, 2019)? To make appro-

priate decisions on how to adopt AI in business decision-making and operation
support, managers must consider both sides of the coin – both the advantages and
dangers of AI application, as visualized in Table 1.1.
As the frontier of computational advancements that solve ever more complex
decision-making problems, contemporary forms of AI differ qualitatively from
previous generations in three general, interrelated facets: autonomy, learning, and
inscrutability (Berente et al., 2021). Autonomy refers to the ability to act without
human intervention such as making autonomous decisions (Baird & Maruping,
2021). Some relevant examples of autonomous AI include self-driving cars,
Robo-advisor software, and product/service recommendation systems. Learning
is the ability of AI to inductively improve automatically through data and experi-
ence. Deep or reinforcement learning is critical to enable AI to perform in more
complex decision-making settings, for example, natural language processing, and
audio–image recognition (LeCun et al., 2015; Sutton & Barto, 2018). Inscruta-
bility implies the ability of AI to generate algorithmic models and outputs that are
intelligible only to a select audience while remaining opaque to others.
The explosion in AI variety and complexity poses several challenges related
to AI’s lack of common sense, biased AI, AI explainability, AI control, and the
paradox of automation. First, AI can be trained to recognize emotions (e.g.,
joy through a smile) and possibly mimic or fake emotions, but AI has no abil-
ity to feel emotions and has further consciousness and understanding in social
situations. In fact, AI could most of the time obey a set of unsaid rules but
have no understanding of the world they operate in (De Bruyn et al., 2020).
Therefore, AI algorithms will always try to maximize rewards and minimize
penalties (Sutton & Barto, 2018). Badly defned objective functions or a badly
incentivized program (i.e., maximizing proft) would cause undesirable out-
comes (e.g., a customer churning, breaking the law) without generating any
pain or guilt for self-correction. For example, Uber was heavily criticized by
the public when the company’s AI-based dynamic pricing system automatically
increased the transport fee by more than doubled after the terrorist vehicle-
ramming and stabbing in London back in 2017 (Riley, 2017). This is one of
many examples that lead to further issues on biased and controllable AI that
we will discuss next.
Second, a suffciently powerful AI-driven predictive model would cause unex-
pected bias and discrimination based on age, gender, race, etc., and inadvertently
targets vulnerable or disadvantaged people (e.g., charging a higher price for
women) (Ayres & Siegelman, 1995). Deep learning neural networks demonstrate
their superior ability to discover hidden patterns in data, and thus AI learns biases
and endogeneities from the dataset and takes them into consideration when gen-
erating predictive outcomes (Rutz & Watson, 2019).
Third, the high complexity of AI systems causes a “black box” for creators and
managers to understand the reasons behind predictions and assess the trustwor-
thiness of AI in completing a given task or achieving a goal (Ribeiro et al., 2016).
In order to deal with the black-box problem (Castelvecchi, 2016), explainable
and interpretable AI consists of a growing feld. Researchers seek to ensure that
both methods and techniques in AI could be explained by human experts, involv-
ing (1) the intention behind the system, (2) the data sources used, and (3) how
the inputs are related to the outputs of the model (De Bruyn et al., 2020).
Fourth, due to its lack of common sense and possible bias, and black-box
problem, some researchers suggest that a good AI is a controllable one (Russell,
2019). It would be dangerous to let AI algorithms, despite being as effective
and effcient as they may be, operate autonomously without human control and
human overriding capacity (Armstrong et al., 2012). The creation of a control
mechanism for AI systems could be an essential research direction with crucial
implications in the industry.
Finally, autonomy – the most important advantage of AI – could backfre in
reality. This problem is labeled “the paradox of automation” (De Bruyn et al.,
2020). When AI replaces humans in performing mundane tasks, it could also
eliminate the opportunity for humans to prepare themselves for completing more
complex tasks. In other words, if humans do not gain enough knowledge, expe-
rience, and expertise while doing mundane tasks, they may not be qualifed to
perform the more complex tasks that AI cannot. The paradox of automation can
result in dramatic consequences in medicine or aerospace when humans lacked
the necessary skills and knowledge to take over faulty AI (Oliver et al., 2017).
The consequences may be less severe in marketing contexts. Still, the paradox
of automation poses a challenge for executives in managing the quality of work
done by marketing specialists, customers’ service agents, etc., when AI systems
are involved in the customer relationship management process.
This chapter outlines the basics of AI, from its evolution, defnition, and rel-
evant concepts to the advantages and dangers of applying AI in marketing. By
fnish reading this chapter, readers should be well knowledgeable of the AI world
and ready to explore different types of AI reviewed in Chapter 3 as well as possible
applications of AI in marketing (Chapter 4).
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Artifcial Intelligence for

Park Thaichon is Cluster Leader of the Relationship Marketing for Impact

The Dynamics of Infuencer Marketing

Consumer Ethnocentrism, Country of Origin and Marketing

European Consumers in the Digital Era

Artifcial Intelligence for Marketing Management

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For more information about this series, please visit: www.routledge.com/

List of Figures vii

1 Introduction to artifcial intelligence (AI): Defnition and

2 The growth of marketing research in artifcial

3 Types of artifcial intelligence (AI) in marketing management 29

4 A framework of artifcial intelligence (AI) applications

5 New developments in artifcial intelligence

6 Artifcial intelligence (AI)-driven services:

7 Artifcial intelligence (AI)-integrated operation;

8 Artifcial intelligence (AI)-based market intelligence

9 Artifcial intelligence (AI)-empowered customer

10 Data privacy and artifcial intelligence (AI): How AI

11 Solutions to artifcial intelligence (AI) and privacy:

1.1 The evolution of AI over time 5

1.1 Advantages and dangers of AI 12

Mojtaba Barari is a Ph.D. candidate in the Department of Marketing, Griffth

Three key milestones of AI

Early Artiﬁcial Intelligence stirs excitement

Machine Learning begins to ﬂourish

1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s

Figure 1.1 The evolution of AI over time

AI defned from a psychological perspective

Toward a well-accepted AI defnition

Machine learning (ML)

Figure 1.2 Machine learning tasks

Natural language processing (NLP)

Summary and key takeaway

Autonomy Lack of common sense

be done in mutual collaboration (Haenlein & Kaplan, 2019)? To make appro-

The growth of marketing research in artificial intelligence (AI)

Types of artificial intelligence (AI) in marketing management

A framework of artificial intelligence (AI) applications in marketing

Artificial intelligence (AI)-driven services

Artificial intelligence (AI)-integrated operation; insights into supply chain

Artificial intelligence (AI)-based market intelligence and customer

Data privacy and artificial intelligence (AI)

Solutions to artificial intelligence (AI) and privacy

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