Optimal Promotional Effort Policy in Innovation Diffusion Model Incorporating Dynamic Market Size in Segment Specific Market

Abstract

Due the increasing globalization of market and diverse consumer groups, market segmentation becomes an ever more important concept in current market scenario. After market segmentation, firms use the available promotional strategies to target market. In this paper, we present a model of determining the optimal dynamic promotional policies for a product in segmented market incorporating dynamic market size, where sales is assumed to be evolved through mass and differentiated promotion. Mass promotional effort is allowed in whole market with a fixed spectrum for each segment while differentiated promotion is targeted to each segment independently. The optimal promotional effort policy for each segment is obtained by applying maximum principle. Numerical illustrations are provided to show the effectiveness of the proposed method and solution procedure by discretizing the optimal control model. Furthermore, sensitivity analysis of the discount rate parameter is carried out and presented.

Dynamic Advertising-based Goodwill Incorporating Fuzzy Environment in Segment-Specific Market

“…Optimizing promotional efforts in a segmented market has been dealt with the model given by Mehta et al (2020), where the potential customers are assumed to be dynamic in nature. The above-mentioned authors have assumed that the parameters considered are deterministic.…”

Tipos de centennials en la red social TikTok y su percepción hacia la publicidad

“…La segmentación de mercados permite dividir un grupo objetivo en subgrupos más reducidos de consumidores (Buitrago Vera et al, 2016) potenciales y actuales, los cuales requieren acciones de mercadeo diferenciadas (Cristancho et al, 2019;Mehta et al, 2020). La segmentación por estilos de vida indica cómo viven las personas, lo que operativamente se expresa en sus actitudes (Ajzen, 2008), es decir, evaluaciones positivas o negativas que tienen de las cosas, personas, opiniones o ideas, las que a su vez influye en su comportamiento de consumo (Arellano, 2010), lo que permite entender que el estilo de vida forma una mezcla de variables externas, como la cultura, la clase social, el grupo de referencia y la familia, aspectos relacionados con las variables de medición cualitativa (San Millán Fernández et al, 2008).…”

Communication and Transparency of Innovation: The Case of the Valencian Community (Spain)

“…In this regard, Xu et al [36] emphasise that while advertising has short-term objectives, R&D has longterm ones and conclude that entities should find an "optimal combination of R&D investments and advertising investments" (p. 13). Furthermore, effective segmentation of target audiences is one of the keys to differentiated communications and the development of an optimal communication strategy [37], as each segment has a different perception of science and follows specific information patterns [38]. In addition, the communication strategy of companies may also be conditioned by the stage of the innovation process in which the company finds itself [39].…”