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New product introduction: goodwill, time and advertising cost

Author

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  • Alessandra Buratto
  • Bruno Viscolani

Abstract

The advertising activity has an important role in the introduction of a new product. We tackle the problem of determining the advertising plan for preparing the product introduction, having the objectives of maximizing the product image at the launch time, minimizing the campaign length and minimizing the total advertising expenditure, within a fixed time interval. After formulating the new product introduction optimal control problem, we study and solve two special cases of it, namely the minimum time and the advertising cost problems. From the former we derive the existence of an optimal solution of the original problem, whereas we obtain its structure from the latter. Finally we present two alternative formulations of the original problem in the non-linear programming framework and suggest using them to solve the bounded time problem. Copyright Springer-Verlag Berlin Heidelberg 2002

Suggested Citation

  • Alessandra Buratto & Bruno Viscolani, 2002. "New product introduction: goodwill, time and advertising cost," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 55(1), pages 55-68, March.
  • Handle: RePEc:spr:mathme:v:55:y:2002:i:1:p:55-68
    DOI: 10.1007/s001860200177
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    Citations

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    Cited by:

    1. S. Mosca & B. Viscolani, 2004. "Optimal Goodwill Path to Introduce a New Product," Journal of Optimization Theory and Applications, Springer, vol. 123(1), pages 149-162, October.
    2. Buratto, Alessandra & Grosset, Luca & Viscolani, Bruno, 2006. "Advertising a new product in a segmented market," European Journal of Operational Research, Elsevier, vol. 175(2), pages 1262-1267, December.
    3. Mukhopadhyay, Samar K. & Setaputra, Robert, 2007. "A dynamic model for optimal design quality and return policies," European Journal of Operational Research, Elsevier, vol. 180(3), pages 1144-1154, August.
    4. Pui Chan Lon & Mihail Zervos, 2011. "A Model for Optimally Advertising and Launching a Product," Mathematics of Operations Research, INFORMS, vol. 36(2), pages 363-376, May.
    5. Alessandra Buratto & Luca Grosset, 2006. "A communication mix for an event planning: a linear quadratic approach," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 14(3), pages 247-259, September.
    6. Marinelli, Carlo, 2007. "The stochastic goodwill problem," European Journal of Operational Research, Elsevier, vol. 176(1), pages 389-404, January.
    7. Huang, Jian & Leng, Mingming & Liang, Liping, 2012. "Recent developments in dynamic advertising research," European Journal of Operational Research, Elsevier, vol. 220(3), pages 591-609.

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