Optimal and Near Optimal Price and Advertising Strategies for Finite and Infinite Horizons

Welam, Ulf Peter

doi:10.1287/mnsc.28.11.1313

Cited by 12 publications

(5 citation statements)

References 13 publications

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“…Furthermore, it can be easily converted into an additive form with the log transformation. Hence, iso-elastic demand functions have been widely employed in many empirical and analytical studies; see, for example, Grabowski [18], Murray and Ginman [33], Welam [45], Oum et al [34], Hoch et al [23], and Petruzzi and Dada [35]. Recently, Song et al [40] have demonstrated various analytical benefits of demand functions with small and nondecreasing "curvature."…”

Section: The Modelmentioning

confidence: 99%

The impact of manufacturer rebates on supply chain profits

Chen

Rhee

et al. 2007

Naval Research Logistics

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Abstract:Manufacturer rebates are commonly used as price discount tools for attracting end customers. In this study, we consider a two-stage supply chain with a manufacturer and a retailer, where a single seasonal product faces uncertain and price-sensitive demand. We characterize the impact of a manufacturer rebate on the expected profits of both the manufacturer and the retailer. We show that unless all of the customers claim the rebate, the rebate always benefits the manufacturer. Our results thus imply that "mail-in rebates," where some customers end up not claiming the rebate, particularly when the size of the rebate is relatively small, always benefit the manufacturer. On the other hand, an "instant rebate," such as the one offered in the automotive industry where every customer redeems the rebate on the spot when he/she purchases a car, does not necessarily benefit the manufacturer.

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Section: The Modelmentioning

confidence: 99%

The impact of manufacturer rebates on supply chain profits

Chen

Rhee

et al. 2007

Naval Research Logistics

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“…Such targeting might imply different advertising copy or intensity of advertising for the sensitive and relatively less sensitive segments. Finally, marketing models which are used to assist managers in allocation of promotion and advertising budgets involve assumptions about the nature of the interaction between price and advertising (Welam 1982). The implication of our research is that the interaction is likely to be negative and that a distinction must be made between consumer segments.…”

Section: Implcations and Conclusion For Purchase Quantity At Every mentioning

confidence: 92%

The Effect of Advertising on Consumer Price Sensitivity

Raj¹,

Winer²,

Zufryden³

1985

Journal of Marketing Research

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“…One of the earliest and most influential models in this regard is that of Nerlove and Arrow (1962), who optimize the advertising policy under dynamic conditions with the objective of maximizing profit. Several extensions of the Nerlove-Arrow model have also been studied in literature (Welam 1982, Rao 1985, Tapiero 1988, Erickson 2011.…”

Section: Dynamic Optimization Of Advertising Effortmentioning

confidence: 99%

Advertising Strategies in Electronic Retailing: A Differential Games Approach

Liu

Kumar

Mookerjee

2012

Information Systems Research

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W e consider advertising problems under an information technology (IT) capacity constraint encountered by electronic retailers in a duopolistic setting. There is a considerable amount of literature on advertising games between firms, yet introducing an IT capacity constraint fundamentally changes this problem. In the presence of information processing constraints, although advertising may still cause a customer to switch, it may not result in a sale, i.e., the customer may be lost by both firms. This situation could occur when customers have a limited tolerance for processing delays and leave the website of a firm because of slow response. In such situations, attracting more traffic to a firm's site (by increasing advertising expenditure) may not generate enough additional revenue to warrant this expenditure. We use a differential game formulation to obtain closedform solutions for the advertising effort over time in the presence of IT capacity constraints. Based on these solutions, we present several useful managerial insights.

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Optimal and Near Optimal Price and Advertising Strategies for Finite and Infinite Horizons

Cited by 12 publications

References 13 publications

The impact of manufacturer rebates on supply chain profits

The impact of manufacturer rebates on supply chain profits

The Effect of Advertising on Consumer Price Sensitivity

Advertising Strategies in Electronic Retailing: A Differential Games Approach

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