Advertising a new product in a segmented market

Buratto, Alessandra; Grosset, Luca; Viscolani, Bruno

doi:10.1016/j.ejor.2005.06.035

Cited by 57 publications

(27 citation statements)

References 7 publications

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“…Examples of this case are advertising for an event, as in (Jørgensen et al, 2006), introducing a new product, as in (Buratto et al, 2006a), and advertising for a seasonal product, as in (Favaretto and Viscolani, 2004).…”

Section: Introductionmentioning

confidence: 99%

Advertising and production of a seasonal good for a heterogeneous market

Favaretto

Viscolani

2009

4OR-Q J Oper Res

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We bring some concepts from market segmentation, which is a fundamental topic of marketing theory and practice, into the statement of an advertising and production problem for a seasonal product with NerloveArrow's linear goodwill dynamics. We consider two kinds of situations. In the first one the advertising process can reach selectively each segment. In the second one one advertising medium is available which has a known effectiveness spectrum for a non-trivial set of segments. In both cases we solve, using the Pontryagin's Maximum Principle conditions, the optimal control problems in which goodwill productivity of advertising is concave and good production cost is convex. Two special cases are discussed in detail.

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Section: Introductionmentioning

confidence: 99%

Advertising and production of a seasonal good for a heterogeneous market

Favaretto

Viscolani

2009

4OR-Q J Oper Res

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“…Buratto et al, 2006) with several retailers and with constraint on final motivations and sales levels. Besanko et al (2005) show that pass-through varies substantially across products and categories, that own-brand passthrough rates are, on average, quite large and that cross-brand pass-through is positively or negatively significant.…”

Section: Resultsmentioning

confidence: 99%

The role of retailer’s performance in optimal wholesale price discount policies

Bykadorov

Ellero

Moretti

et al. 2009

European Journal of Operational Research

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The main goal of this paper is to model the effects of wholesale price control on manufacturer's profit, taking explicitly into account the retailer's sales motivation and performance. We consider a stylized distribution channel where a manufacturer sells a single kind of good to a single retailer. Wholesale price discounts are assumed to increase the retailer's motivation thus improving sales. We study the manufacturer's profit maximization problem as an optimal control model where the manufacturer's control is the discount on wholesale price and retailer's motivation is one of the state variables. In particular in the paper we prove that an increasing discount policy is optimal for the manufacturer when the retailer is not efficient while efficient retailers may require to decrease the trade discounts at the end of the selling period. Computational experiments point out how the discount on wholesale price passed by the retailer to the market (passthrough) influences the optimal profit of the manufacturer.

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“…Market segmentation has long been a popular topic for academic research in marketing. Only a few papers on dynamic advertising model deal with market segmentation [3][4][5][6][7]. Little and Lodish analyzed a discrete time stochastic model of multiple media selection in a segmented market.…”

Section: Or In Practicementioning

confidence: 99%

Optimal advertising control policy for a new product in segmented market

2009

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Market segmentation is the foundation on which all other marketing actions can be based. It requires a major commitment by management to customeroriented planning, research, implementation and control. The overall objective of using a market segmentation strategy is to improve company's competitive position and better serve the needs of customers. In this paper, we use the concept of market segmentation in diffusion model for advertising a new product considering the external as well as internal infl uences and study the optimal advertising effectiveness rate in a segmented market. First, we discuss the evolution of sales dynamics in the segmented market under the assumption that the fi rm advertises in each segment independently. Further case of a single advertising channel, which reaches several segments with fi xed spectrum, is also discussed. Such problems have not been discussed before. The optimal control theory is applied to study and solve both classes of problems.

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Advertising a new product in a segmented market

Cited by 57 publications

References 7 publications

Advertising and production of a seasonal good for a heterogeneous market

Advertising and production of a seasonal good for a heterogeneous market

The role of retailer’s performance in optimal wholesale price discount policies

Optimal advertising control policy for a new product in segmented market

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