Strategic Advertising Advertising Model Advertising Function Optimisation
Issue Date:
1998
Publisher:
Institute of Mathematics and Informatics Bulgarian Academy of Sciences
Citation:
Pliska Studia Mathematica Bulgarica, Vol. 12, No 1, (1998), 85p-96p
Abstract:
Strategic behaviour has long been a crucial issue for modern corporations. To maximize potential profits and market share, firms are more than willing to invest in
sales promotion to boost long term manufacturing output. Knowing that the sales
of the firm not only respond to own advertising budgets, but also depend upon
rivals’ advertising strategies, oligopolistic firms form part, therefore of a continuous
race with reference to non-price competition. Efficient use of investment resources
is crucial for business operations and long term strategic success. This paper aims
to investigate the key issue of optimization of strategic advertising outlays. By using mathematical modelling techniques, strategic linkages between rival companies
are identified and advertising impacts explained. Since advertising influences can
persist through time, our discussion extends to explore this fundamental point by
constructing a more advanced model to examine into the problems of optimization
over time. Empirical data is used to test the predictive power of these models
and assess relative efficiencies. All in all, this paper intends to highlight the importance of continuous strategic advertising investment and consequently provides
comprehensive insights into the impact of modern advertising functions over time.